Budget ushers in City Hall battles 

Despite the economic turmoil, Mayor Gavin Newsom unveiled his proposed $6.48 billion spending plan that he says invests in jobs, protects public safety and preserves the social safety net for The City’s most vulnerable residents.

The mayor, who released his budget Tuesday afternoon from a nonprofit in the mid-Market Street neighborhood, said his spending plan goes a long way to soften the blow of cuts to social services and does not result in the expected devastating cuts to social services — without creating new taxes.

“We were able to avoid the kind of cataclysmic expectation of devastation that some had believed was inevitable in this budget,” Newsom said.

Nevertheless, members of the Board of Supervisors said they plan to restore the proposed cuts made to social services. They also strongly oppose a number of methods Newsom employed to close the deficit, like contracting out services.

The proposed San Francisco budget for next fiscal year, which begins July 1, will now go before the Board of Supervisors five-member Budget and Finance Committee, chaired for the second consecutive year by Supervisor John Avalos.

Supervisors review the proposal during a 60-day process that can grow politically heated and controversial as the board debates and battles the mayor, along with one another, about spending priorities.

The committee will hold hearings on departments’ budgets, make adjustments, negotiate spending priorities with Newsom and forward it to the full board for adoption.


Supervisors find conflicts in savings, revenue

Proposal: Reducing jail health costs

What: Instead of San Francisco County providing all services, a private company would be contracted

Economic Impact: Savings of $5 million in upcoming fiscal year and about $11 million annually thereafter

The county of San Francisco spends about $30 million each year providing health services to inmates. Mayor Gavin Newsom wants to contract the services to a private company to reduce the price tag. Supervisors have already lambasted the idea and have opposed the contracting out of any services currently provided by The City or county.

“Don’t blame Sheriff [Michael] Hennessey for this, but I respect his willingness to be supportive under the circumstances,” Newsom said. Noting the millions of dollars, he said to the supervisors in attendance, “Think about where that money could go.”

In addition to the jail health services, Newsom has proposed outsourcing other city and county services.

Proposal: Condominium conversion 

What: Allows owners to pay a fee for immediate conversion of their units into condos

Economic impact: $8 million in revenue

Only 200 multiunit buildings each year are allowed to be converted into condos, according city law, and property owners often wait years to convert their units. Supervisors have long objected to conversions, fearing that the rental market would shrink, forcing out lower-income residents.

Newsom has challenged the Board of Supervisors to once again allow for condo conversions to occur for a fee. “For me, this is de minimis in terms of the overall housing market. I still don’t get this argument,” he said.

Supervisor John Avalos, chair of the budget committee, blasted the idea.

“It goes against what we are trying to do to protect rental property, especially for vulnerable people in San Francisco,” he said.

Proposal: No new taxes

What: Balancing budget by not relying on new tax revenue

Economic impact: To be determined

Newsom has prided himself on balancing San Francisco’s budget by not relying on new taxes, but there is a movement afoot by progressive supervisors to put tens of millions of tax measures on the November ballot. The taxes are meant to offset budget woes this fiscal year and in years to come.

Newsom said taxes could have “unintended consequences” and actually reduce revenue, and also they do not solve the “structural problem.”

Avalos, however, said tax revenue has to be part of the budget solution.

“If we’re able to put some revenue measures on the ballot to bring in about $100 million, that’s $100 million we have for next year,” he said. “We have to have these options before us to have ongoing sources of revenue so we are not just doing one-time fixes.”

— Joshua Sabatini

Key numbers

$6.48 billion Mayor Gavin Newsom’s proposed San Francisco budget for fiscal year 2010-11

$6.6 billion Budget for fiscal year 2009-10

$482.7 million Budget shortfall closed in spending plan

$250 million Savings from worker concessions over two years

855 Positions eliminated overall in spending plan

25,870 Number of positions in budget proposal — lowest since 1998

Source: Mayor’s Office

Details of the proposal


  • $345 million in total capital investments that could create more than 2,000 construction-related jobs
  • More than 1,700 summer employment spots for youths


  • Invests $50 million in street resurfacing to pave 400 city blocks and maintain an additional 150 blocks to hold overall conditions steady
  • Funds projects including renovation of Terminal 2 at San Francisco International Airport, Doyle Drive replacement project and the Water System Improvement Program

Government reform

  • Reduces management salaries and positions by 10 percent
  • Reduces overtime spending by $17.7 million, a reduction of 16.2 percent
  • Reduces city vehicle fleet by 80
  • Reduces cell phone costs by $1.6 million

Source: Mayor’s Office

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