With about two months before a proposed balanced city budget is due, a reduced workweek plan, 20 percent department budget cuts and other assumptions still show The City in the red — by more than $100 million.
Even as labor unions push back against Mayor Gavin Newsom’s implementation of a reduced workweek with a counter-proposal, The City will face deeper cuts to close its $515 million budget deficit for the fiscal year that begins July 1.
Even with the reduced workweek and factoring in other possibilities — like assuming concessions being asked of police and fire labor unions are achieved — The City still faces a budget deficit of $130 million. Those other factors include 20 percent department budget cuts, a $30 million reduction to the recommended spending of $70 million on capital needs and just a $40 million hit from state cuts.
The debate about the reduced workweek proposal highlights the challenges facing city officials. Today, labor leaders are planning to meet with Newsom to discuss alternatives.
That proposal, which affects about 17,400 positions, would deal a 6.25 percent wage cut to the city workers rehired on a 37.5-hour workweek, down from 40 hours. The savings are estimated at $110 million during a 14-month period, for general-funded departments and enterprise departments like the Port of San Francisco and airport. Layoff notices went out already, and a list of the reduced workweek job positions is expected as early as Monday. Newsom has said an “overwhelming majority” will be rehired.
“We still have $130 million to go,” Supervisor Sean Elsbernd said during Wednesday’s Board of Supervisors Budget and Finance Committee meeting. “Even with all those grave things that are happening with the [reduced workweek], we still have $130 million to go, and that is also assuming 20 percent reductions in the departments.”
“That’s the scale of the challenge that we are facing,” said Greg Wagner, Newsom’s budget director.
Elsbernd questioned the soundness of the estimated savings expected from the reduced workweek.
“The real constraint will be their budget,” Wagner said.
Elsbernd, however, said, “I find that just unrealistic. If this gets approved, you’ll have departments coming back for supplemental money.”
The City could decide to place tax measures on the November ballot to help soften the blow of closing the deficit.
When asked about that possibility, Wagner said, “We are certainly open to that,” although such proposals would have to be gauged by whether voters would approve them and the effect on the economy.
Newsom has to submit a balanced city budget to the Board of Supervisors by June 1 for review and adoption.