As San Francisco engages in a budget re-balancing act in the middle of its fiscal year, it remains unclear whether The City will live up to its promise to fund a free City College.
That’s because after voters rejected a sales tax increase in November, The City no longer has the tens of millions of dollars expected to pay for homeless and transit services.
Now city officials are considering all options — and that means all new revenues — to backfill the loss of funding. And that includes the revenue from the voter-approved tax increase on the transfer of high-end properties placed on the ballot by Supervisor Jane Kim to make CCSF free.
Adding to the budget debate is a new proposal introduced Tuesday by Supervisor David Campos to spend $2 million this fiscal year and $5 million next fiscal year on legal services to block deportations of undocumented immigrants under President-elect Donald Trump, which Campos wants approved before Trump is inaugurated Jan. 20.
Supporters of a free City College turned out en masse at Wednesday’s Board of Supervisors Budget and Finance Committee hearing to support a $9 million spending proposal introduced by Kim that would ensure City College is free beginning August 2017. The funding comes from the anticipated $14 million generated this fiscal year by the voter-approved property transfer tax, Proposition W.
The measure didn’t mandate how the money is spent, but the board passed a resolution earlier this year committing to funding free City College with those revenues, and the campaign for the measure was based on doing just that.
Supervisor Mark Farrell, chair of the committee, wanted to put the brakes on the proposal given the now competing needs.
“I don’t know [whether] San Francisco voters and taxpayers want to pay for people to go to City College or pay for homeless services and get people off the street. We need to have that discussion,” Farrell said.
Supervisor Norman Yee, however, argued that the use for the tax revenue “was clearly a mandate given by voters.” He added that if the situation was reversed and the sales tax passed, he wouldn’t being asking to “rob [money] from the sales tax.”
Supervisor Aaron Peskin told the San Francisco Examiner on Wednesday he supported the City College spending proposal. “A promise is a promise,” Peskin said.
Campos told the Examiner that The City should approve both the $9 million for City College and his spending for legal services.
“They are not mutually exclusive,” Campos said. “If the board and mayor make them priorities, yes, there is enough money.” He added, “Worst case scenario, we have a general fund reserve that could cover these items.”
However, Farrell cautioned against that method, arguing reserves are there as a safety net in case of an economic downturn.
Meanwhile, Mayor Ed Lee is expected to introduce a rebalancing plan for the current fiscal year by the end of next week for the current fiscal year to backfill the sales tax loss.
Melissa Whitehouse, the mayor’s budget director, said, “The homeless spending is where he is really concerned.” That money was to pay for such things as rental subsidies and Navigation Centers.
The mayor also plans to provide city departments with budget instructions next week to make cuts to offset the $350 million to $400 million budget deficit projected for the next two fiscal years. Another budget issue is that nearly all of The City’s labor contracts are up for negotiation next year.
Whitehouse said the deficit won’t mean layoffs or “drastic service cuts,” but “trade-offs.”
There are also concerns about whether the mayor will not enact the voter-approved street tree measure, Proposition E — which would cost The City $15 million annually — as a budget saving measure. The City could also use revenues from the voter-approved soda tax when it kicks in in January 2018.
Kim argued that no matter what the Board of Supervisors committed to fund a free CCSF.
“We made a commitment … that we would make City College free if the real estate transfer tax passed – not if the sales tax and the real estate transfer tax passed,” Kim said.
Of the sales tax, she said, “I don’t view us as having a hole in the budget. We should now take it out of the budget.”
In the end, the committee voted to send the proposal to the full board for a vote on Dec. 13, one week after Kim had initially requested. Supervisor Katy Tang argued for the later vote to have more budget information. “We are in such a difficult predicament right now,” Tang said.