Examiner Editorial: City payroll grows by $100 million per year 

It’s mind-boggling that San Francisco’s public employee payroll can be expected to balloon every year by more than $100 million. Thanks to a toxic combination of locked-in salary increases, escalating health care costs and a generous pension fund, The City’s salary and benefit expenses for municipal workers are projected to increase by another $121.4 million in the next fiscal year.

It looks even worse for the following two years. The new three-year budget projection by the City Controller’s Office forecasts San Francisco labor costs to increase by $133.8 million for the fiscal year beginning July 1, 2011, and then by $120.9 million in the subsequent fiscal year.

The Automatically escalating employee costs are a huge factor in The City’s projected deficits of $483 million for next fiscal year, and then $712.2 million and $787 million the following years. San Francisco County’s budget is about $6.6 billion a year, and approximately one-third of that budget is paid to the 26,000 city employees.

At least these grim projections have been somewhat softened for the near term by Tuesday’s welcome agreement between Mayor Gavin Newsom and most of The City’s public employee union leaders. There will be 12 unpaid furlough days during each of the next two fiscal years. The deal is estimated to save some $200 million, and this year’s pending layoffs will be reduced from 1,500 to a maximum of 500.

Union rank-and-file members must still vote to ratify the furloughs, and Newsom is still negotiating with the police and Muni operators unions. But the emerging agreement is a hopeful sign that a will is finally being found to revise some of San Francisco’s no-longer-sustainable locked-in expenditures.

Without the furloughs or equivalent givebacks, The City would have to somehow find other ways to cover a full $52.5 million in salary increases, a $52 million rise in pension contributions and $15.1 million more in health benefits for current workers and retirees.

Built-in annual $100 million payroll boosts have become so deeply entrenched in The City’s fiscal structure that they can only be fought on multiple fronts. But there can be no question that if the uncontrolled growth is not stopped, the general fund will be less and less able to provide San Francisco’s basic services.

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Staff Report

Staff Report

A daily newspaper covering San Francisco, San Mateo County and serving Alameda, Marin and Santa Clara counties.
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