Volume 44 Number 08

Time for serious budget reform

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EDITORIAL Rahm Emanuel, President Obama’s chief of staff, likes to say that politicians should never let a crisis go to waste — but that’s what happened in San Francisco last summer, when the mayor and the supervisors approved a budget deal that didn’t involve any real structural reform, didn’t solve any long-term problems, and didn’t even last six months.

Now there’s a new crisis, one that, if anything, is worse. Cutting almost a half-billion dollars from the city budget last year was absolutely brutal. But cutting another half-billion, which is what the controller is now talking about, seems almost inconceivable.

It’s time to quit with the patches, quit with the one-time solutions and fee hikes. And with the mayor missing in action, the supervisors simply have to take the lead here and begin working on major systemic changes that shift the way the city is financed and the way money is spent.

The biggest problem with last summer’s deal was the lack of any serious attempt at bringing in new revenue. Newsom and his advisors all said that tax hikes weren’t looking good in the polls and probably wouldn’t get voter approval, but election results around the Bay suggest otherwise: In city after city, voters approved new taxes to fund essential public services.

And Newsom never gave the revenue side of the equation a fighting chance. He never made any personal effort to lobby the three supervisors he had appointed to the board, who were all reluctant to put emergency tax measures on the ballot. He just let the idea die.

And now the city is paying the price. Everyone with any sense knew last summer that the recession wasn’t going to magically end in time to make this budget work. It was clear that property tax and sales tax revenue would drop even further — and that the only way to avoid brutal midyear cuts was to look for new sources of money. Now the mayor and the board have to slice close to $50 million to keep the red ink at bay, and next year’s deficit is pegged at 10 times that much.

The other glaring problem with the mayor’s budget approach is that it sought to cut only from the front lines. But the highest-paid workers, the folks who make way more than $100,000 a year, the management ranks that have become very well staffed in recent years, were largely untouched. And frankly, there are a lot of people in that category who don’t do much of anything that’s essential to the functioning of the city.

During the dot-com boom, when Willie Brown was mayor and the city was awash in cash, the ranks of the politically appointed managers grew dramatically. Some of those folks are still around. Newsom has added his own. And the structure of management and organization in this city has never been a model of efficiency. So if the mayor wants another round of deep cuts — 20 percent from every department — he should start with a management audit of some of the biggest departments and take a hard look at exactly what all those senior employees do all day — and whether their work might be less important than, say, nurse aides who take care of the sick elderly.

As a simple show of good faith, Newsom shouldn’t replace Nate Ballard, the press secretary, or Kevin Ryan, his criminal justice advisor. There are still four other people in the mayor’s press office, more than any mayor in modern history has ever needed. And the city already has a police chief, police commission, district attorney, and sheriff. Why the mayor needs his own criminal justice office is a mystery to us.

There are other policy issues that need to be examined. The current budget shortfall memo from the city controller notes that some departments are already over budget — the Sheriff’s Office, for example, needs an additional $2.7 million dollars. The public defender and the courts need and additional $4.9 million. Why? Well, one reason is the new police chief’s crackdown on drug sales in the Tenderloin — which is packing the jails. "We’re defiantly looking at a lot of new drug cases," Sheriff Mike Hennessey, who has had to open three new housing units to fit all the prisoners, told us. The crackdown may be good public policy (or not) — but there was never any discussion of how much it would cost. And the mayor and the chief never asked the supervisors to authorize adequate spending for it.

So as a matter of policy, the mayor apparently thinks it’s worth $7 million to arrest drug dealers — but not worth $7 million to keep public-health workers who save lives every day on the job. That’s a policy decision that was made arbitrarily — and that kind of discussion needs to happen on a dozen or more fronts.

The mayor told his department heads Nov. 19 to expect 20 percent cuts — and to prepare for as much as 30 percent. But that’s not going to happen across the board. Unless the police stop arresting people, for example, the sheriff won’t be able to cut 20 percent of his budget without letting prisoners go. The mayor won’t take the political heat for cutting that much from cops and fire. So the burden will fall on public health, Muni, human services, recreation and parks, and other smaller departments. And the level of cuts will render those agencies unable to provide basic services.

So let’s be honest: there is simply no way to close a deficit this large without new taxes. That’s just reality, and anyone who denies it is refusing to face facts. San Francisco can’t survive with basic services — like police, fire, and public health — intact on the amount of money the controller projects the city will collect in the next year.

Newsom will be guilty of destroying the entire social service infrastructure in this city if he refuses to push tax hikes. And he’ll be damaging the local economy if he does it piecemeal.

We’ve been clamoring for years for an overhaul of the city’s tax structure, and now there’s a hurricane-force fiscal storm forcing the issue. If Newsom doesn’t announce plans to hold open, public discussions and draft a new tax policy for the city (and we doubt that will happen) then the supervisors must act, now. Board President David Chiu already had a broad-based committee work on tax reform. Now the board needs to begin drafting comprehensive legislation to change the way the city collects money — with the aim of putting a measure on the ballot as early as possible next year.

The goal should be not only to bring in another $250 million (at least) in new revenue, but to shift the tax burden away from small businesses and the poor and middle class and onto the wealthy. A big first step: get rid of the flat business tax and replace it with a progressive gross receipts tax that charges the biggest companies a higher percentage. Other cities have found numerous other ways to raise money — such parcel taxes, which aren’t quite as fair as ad valorem property taxes, but at least tax property owners, who in general are a wealthier class. A properly written utility users tax would hit big companies that use (and sometimes waste) a lot of power. And of course, a tax on income earned in the city — which would cover commuters who use city services but don’t pay city taxes — is among the most progressive ways to bring in new money.

Meanwhile, let’s remember: fee hikes (for Muni rides, for use of city pools and playing fields etc.) are just hidden taxes — on the poor and middle class.

State law makes it hard to raise taxes; any measure would have to go to the voters. But a major tax-reform overhaul that doesn’t just raise a few taxes on a targeted group but makes the entire system more fair for everyone, ought to be a ballot-box winner — particularly if the mayor is willing to raise money and lead the battle to pass it.


In a Nov. 18 interview with Hank Plante, the KCBS political editor, a testy and impatient Newsom ducked specific questions about how he was going to solve the budget shortfall. After saying that he doesn’t read the newspapers (which, frankly, is either a lie or utterly shameful for a big-city mayor, and leaves him looking as ill-informed as former President Ronald Reagan) he simply said the deficit would be "a lot of work."

That’s an understatement — and Newsom needs to do more than sit in his office and whine about the media. He needs to be out in public, addressing the budget crisis — and he needs to let reporters and residents and business people and the supervisors ask questions and get straight answers.

It’s fine to say that at this point, nobody knows how to solve the problem. It’s not okay to say: trust me, I’ll get back to you on that. This is a citywide crisis, and it’s essential that the public feels involved.

This is the biggest crisis since Gavin Newsom took office. It’s time he started acting like it.

Editor’s Notes

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Tredmond@sfbg.com

So the mayor of San Francisco says he doesn’t read the newspapers, which may be why he expressed so much surprise at the size of next year’s budget deficit. The rest of us — the ones who, you know, bother to check out publications that hire reporters to inform us about current events — pretty much knew that the recession wasn’t over, that city tax revenues were going to be below projections, and that next year would be a repeat of this year.

He also seems almost cavalier about it, telling reporters that this isn’t a crisis, that he simply has to work hard and come up with a solution. And if the past is any indication, his solution will be to cut Muni, public health, social services, and recreation and parks, lay off thousands more frontline workers (damaging the local economy even further), and complain that we aren’t getting more help from Sacramento and Washington.

It’s as if I’m reading Cat’s Cradle again: round and round and round we spin, with feet of lead and wings of tin. Wasn’t Einstein the one who said the definition of insanity is doing the same thing over and over again and expecting the result will be different?

The budget Newsom presented to the board in June, and the somewhat different one the board approved in July, didn’t solve the city’s budget crisis. Firing all the remaining recreation directors and laying off more health care workers and shutting down bus lines (while raising fares) and depending on condo-conversion fees — a one-time source of income — to prop us up won’t work either.

I remember listening to John Garamendi, then lieutenant governor, talking outside a University of California Board of Regents meeting at the Mission Bay campus a few months ago. He was complaining about budget cuts and insisting he wouldn’t vote to eliminate programs and raise fees. "How," I asked him, "do you recommend we balance the budget?" His answer: "California is a rich state and can afford public education."

That’s a little shy of suggesting a hike in the income tax rate for the very wealthy or an oil-severance tax, but it was the right point. Folks: San Francisco is a rich city. By millennial standards, it’s one of the richest cities ever, in one of the richest civilizations ever. We can afford public health and public parks and public transportation.

It costs money to run a city like San Francisco. Lots of money. The problems we face are immense — from moving more than 1 million people a day around town without making the streets impassible and contributing to global warming, to saving the lives of people who have been lost, to the state and federal safety nets, to preventing teenagers from shooting each other to death with automatic weapons, and the list goes on. And if you get rid of the patronage jobs and the embarrassing waste and then explain to people what we have to pay for and who’s going to be paying most of the tab — and you make sure that the ones paying the most can most afford it — then I think you can get even tax-weary voters behind you.

But you can’t solve a half-billion dollar budget problem — on top of last year’s half-billion dollar budget problem — without a clear vision of what this city needs, and how to pay for it. And that’s what’s missing in the mayor’s office.

Instead, Newsom blames the press for screwing up his campaign for governor and says there’s nothing really to worry about; the budget will get fixed, somehow, one of these days, and nobody who matters will have to suffer that much.

Round and round and round we spin. I think I’m going to be sick.

Psychic Dream Astrology

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ARIES

March 21-April 19

It’s not your struggles that define you, Aries, but how you rise to meet them. As you climb to new peaks of awesomeness in your quest for self-mastery, you are likely to trip over some stumbling blocks. Look before you leap and try to understand the nature of your adversities so you can get a better handle on them.

TAURUS

April 20-May 20

Your sign resists change largely because it makes you feel so out of control. This week you’re the one who is changing, but it’s the repercussions that are getting you frazzled. By letting go of your comfort zone, you may have caused a ripple effect of changes that are overwhelming you. You can’t run backward through that china shop, Bull, so just deal.

GEMINI

May 21-June 21

Your notions about family are being challenged, and if you’re waiting for someone to swoop in and magically fix all your problems, you’ve got another think coming. Who can you be the most real version of yourself with? Your family. Invest your energy and time with them this holiday season for best results.

CANCER

June 22-July 22

Do you know how to finesse holding your ground in such a way that you don’t come off as a pushy jerk? Sure ya do, but only when you put your foot down before you feel … crabby. Pay better attention to your own moodiness this week in an effort to avoid unnecessary problems between you and the ones you love.

LEO

July 23-Aug. 22

Asserting your boundaries doesn’t have to harsh your mellow. The only way to get what you want out of life is to be clear. Know your limits and what works for you, so that you can be unmistakable about it with others. You can’t control what they’ll do with that information, but strive to take responsibility for your part this week.

VIRGO

Aug. 23-Sept. 22

It’s so much easier to keep it together when you’re all alone and can control what you concentrate on. Being around people is full of surprises, and you may not be in the mood. But don’t avoid people. Iinstead, strive to deal with *yourself* differently. Focus on the good in the folks around you, even when you’re annoyed this week.

LIBRA

Sept. 23-Oct. 22

Be careful what you wish for, Libra, ’cause you just may get it. Whatever it is that you’re really focusing on may be different from your surface mental chatter. Check in with yourself to make certain that you want goodness for you. If you have a hard time with that, surround yourself with the most positive folks you know and ride their example.

SCORPIO

Oct. 23-Nov. 21

You are finally ready to embody the changes you’ve been cultivating in your self. In the big picture of things, you’re on the right track. But that doesn’t mean the new and improved you will be well-received. As long as you are being true to yourself and cool with others, don’t let it deter you. Allow for growing pains.

SAGITTARIUS

Nov. 22-Dec. 21

There’s the you in your head, and then the you around other people. Which one is the real Sag? Work toward incorporating these two parts of yourself. You have been feeling disjointed around your homies and like you’re missing a part of yourself when you’re alone. Integrate! Make the time you spend in either company more enjoyable.

CAPRICORN

Dec. 22-Jan. 19

Too much worry only puts creases on your brow. You are running over the same problems with the same fine-tooth comb, expecting to come up with new ideas or solutions. Not so much, pal. You are not in the control tower, so don’t even bother shouting orders up to the fool in charge. Just let it go for now.

AQUARIUS

Jan. 20-Feb. 18

You have to be nicer to yourself. The remedy for your anxieties is good old fashioned TLC. That stands for tender lovin’ care, but since you are such an individualist, I’m going to add a new meaning just for you: heal yourself with time, leniency, and compassion. It will help you to help yourself through your worries.

PISCES

Feb. 19-March 20

You don’t know who’s to blame for what, much less who deserves credit, Pisces. You have been growing and learning to take up more space in your own life, which is awesome. The only drawback is that you’re struggling with your fears of being responsible for things. Be willing to make mistakes,

and you won’t have as much to fear.

Jessica Lanyadoo has been a psychic dreamer for 15 years. Check out her Web site at www.lovelanyadoo.com or contact her for an astrology or intuitive reading at (415) 336-8354 or dreamyastrology@gmail.com.