Cuts to San Francisco's general fund don’t slow budget growth 

Each year, San Franciscans are bombarded with reports of budget cuts that will close recreation centers, cut homeless programs, reduce library hours and place fewer police officers on the streets.

For the 2011-12 fiscal year, which began July 1, $173 million was cut from the general fund — the portion of the city and county budget that pays for basic services such police, fire, libraries, parks and street maintenance.

For a breakdown of the total budget for the city and county of San Francisco for the previous decade compared with its general fund, click on the photo to the right.

But despite these “cuts,” the general fund grew this year by 10 percent — $283.5 million — to $3.26 billion.

How is it possible that city officials made deep cuts to a general fund that swelled by nearly $300 million?

Ten years ago, San Francisco’s $4.9 billion budget had a $2.37 billion general fund. Today’s general fund has grown to $3.25 billion, outpacing the rate of inflation, which would have had it at $2.97 billion.

“Our expenditures are growing faster than our revenues,” said Greg Wagner, the mayor’s budget director. “We project that even once the economy has recovered and revenues have resumed previous rates of growth, we will still face significant deficits unless we take actions to control growth in costs.”

City officials point to the cost of operating a government is ever-increasing, driven by the escalating cost of workers’ pension and health benefits. The workers’ salary and fringe benefits are expected to increase by $647 million during the next five years for a total of $2.6 billion in fiscal year 2015-16. At the same time, The City’s pension contribution for city workers could double from the current $422 million in four years.

There are 26,272 jobs on the city and county payroll this fiscal year. Retired workers and beneficiaries total 20,823, according to the retirement system’s July 2010 actuarial report.

The increasing labor costs has prompted Mayor Ed Lee, with the backing of the Board of Supervisors, to place a measure on the Nov. 8 ballot that would reduce pension and other labor costs. Another measure to reduce pension costs was placed on the ballot by Public Defender Jeff Adachi.

The escalating costs of government also comes as The City is facing an unknown impact from state budget cuts, including having to oversee the influx of 700 inmates and paroles from San Francisco currently under the state’s supervision.

Voters would be surprised if they were told about the increase in the general fund, said Gabriel Metcalf, executive director of the San Francisco Planning and Urban Research Association. “Even as we’re bringing more money into The City we are not increasing services because the costs for employees keep going up,” Metcalf said.

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