Revenue spike prompts call to curb cuts 


Nonprofit leaders are calling on Mayor Ed Lee to spare public health services from $25 million in cuts and to spend millions of dollars more on enhancing programs for low-income residents as San Francisco’s tax revenue streams have reached prerecession levels.

Lee plans to unveil his proposed two-year budget Friday morning. But before finalizing the spending plan, he is scheduled to meet with nonprofit leaders Tuesday afternoon to discuss their funding requests.

“We now are actually back to prerecession peaks for all of our local taxes,” City Controller Ben Rosenfield said last week. Payroll tax revenue, for example, is $26 million more than expected, $478.8 million, which is 10 percent higher than last fiscal year.

The influx of unexpected revenue helps with closing a budget shortfall that was estimated six months ago at $123 million for the upcoming fiscal year, which begins July 1.

The budget proposal comes at a dynamic time in San Francisco. Rents and other cost-of-living expenses are skyrocketing as the booming technology industry has reinvigorated the local economy. Concerns over evictions, homelessness and affordability for the working class remain high.

Nonprofit leaders say they want the mayor to eliminate the $25 million in proposed cuts to social service programs in the Department of Public Health such as substance abuse treatment and psychiatric care. In addition, some are looking to enhance services to meet a growing demand, such as $3 million for workforce training and $2 million for eviction services and temporary rental subsidies.

“We need to keep the status quo and we need to be innovative to turn the dial on some of the social problems in San Francisco,” said Gail Gilman, executive director of the Community Housing Partnership, which houses homeless people and provides job training.  

But Supervisor Mark Farrell, chairman of the Board of Supervisors Budget and Finance Committee that will review Lee’s budget, said one of his biggest challenges is setting expectations. Despite the stronger local economy and rosier tax revenues, Farrell said, “We’re facing a deficit and the reality is we have to cut.”

San Francisco’s expenses, driven largely by labor costs, continue to grow at a faster rate than its revenues, showing a funding shortfall for years to come. On top of that, San Francisco has had large deficits and slashes to services in previous years, which means there are countless competing funding requests for everything from more money for Muni to gardeners for city parks.

Once the budget is submitted Friday, the budget committee will then comb through the details during weeks of public hearings and make changes — a process that can ignite political battles. Committee member Supervisor John Avalos is expected to highlight the disparity of wealth in San Francisco’s current economy using a socioeconomic equity report recently drafted by Budget Analyst Harvey Rose.

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