San Francisco voters very narrowly passed road-repaving bond measure Proposition B. But borrowing money to fix roads — instead of paying for it with general-fund dollars — is like pouring gold into potholes. With the passage of Prop. B, we’ll fix our roads for a while, but not our general infrastructure maintenance mechanism in San Francisco. When all of the math is done, bond funding costs 2.5 times as much as funding from operating revenues.
Deferral of difficult choices is common in life, and especially so when it comes to politics. A prime example is the inability of Congress to agree on a long-term solution to our debt crisis. And if you believe that the so-called supercommittee will be able to agree on at least $1.2 trillion in budget cuts by Nov. 23, and that Congress will approve such cuts by Dec. 23, then you have far more faith in our national elected leadership than I do.
Here in San Francisco we have our own examples of avoiding difficult actions and making politically expedient but unsound decisions. The result is a more costly approach to addressing basic needs. The chronic underfunding of street repair has resulted in the streets’ current rough conditions. But with continued high rates of unemployment, ongoing stock market volatility and severe financial challenges at the state and federal levels, bond funding of basic needs is the worst kind of local stimulus plan. It’s a temporary band-aid on a fiscal problem that festers without a cure.
Not many would argue that we shouldn’t keep our streets in good repair. But the way we’re being asked to pay for this fundamental municipal government responsibility is far from ideal and only compounds the difficult priority-setting we must do. Why? Two reasons. First, it diverts our attention from how we got here in the first place and won’t solve the problem of inadequate maintenance and budgeting decisions. The second flaw: Bond funding of road maintenance and repairs costs more than double what it would than if funded through normal operating expenditures.
It’s folly to encourage continued underfunding of basic city infrastructure repair and maintenance by allowing citizens to think that floating bonds is the fiscally prudent way to pay for it. This kind of thinking led the federal government to borrowing 41 cents of every dollar it spends.
We should budget to pay for recurring needs like road repair with general-fund dollars — not with special bonds. It’s time to stop kicking the can down the road and to realign San Francisco’s budget to match our fundamental priorities — which should include keeping our city’s infrastructure in good repair.
BOMA compliments our present elected city leaders for much of the good work they have done over the last 10 months. But it is past time to focus on resetting San Francisco’s priorities and realigning The City’s budget to support them. Delaying such action only makes more difficult and expensive the decisions we elected our leaders to make in the first place.
Marc Intermaggio is executive vice president of BOMA, San Francisco’s Building Owners and Managers Association.