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San Francisco’s $9 billion question

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Working for the president of the Board of Supervisors, I spend my days deep in the weeds on San Francisco’s major policy issues. And there’s no better place to start than The City’s $9 billion question.

When you work in City Hall, you hear it often: “The City has a $9 billion budget. Why can’t we pave this street, buy that fire engine, build a statue of Robocop?”

It’s true — the mayor of San Francisco oversees a budget bigger than that of about 10 states. So where does all that money come from and, more importantly, where does it go?

It’s complex, but people deserve to know — and to influence — how their money is spent.

The major sources of The City’s $9 billion are charges for direct services at 32 percent, property taxes at 18 percent, and federal and state money at 15 percent. Local taxes on sales, hotel rooms, etc. add 12 percent, business taxes at 7 percent, and rents and concessions another 6 percent.

On the expense side, $4.3 billion, about half the budget, is legally restricted to “enterprise” departments — those that generate their own revenue by charging for provided services.

As the state’s only combined city and county, San Francisco has a huge portfolio. We operate a $1 billion airport, the 7th largest public transit system in the country, a water system spanning the state and a major seaport. All of this occurs under departments that are by-and-large financially independent.

Propositions 13, 26 and 218 require departments only charge what it costs to provide a service, and similar laws limit how or if department revenues can be transferred elsewhere. So the Public Utilities Commission’s revenue from water bills must go back into our water system. And SFO’s goldmine must stay within SFO.

The $9 billion budget effectively becomes $4.6 billion — what is called the General Fund.

Then there are the “set-asides.” Over the years, voters have mandated specific General Fund spending. This year, it totals about $910 million and includes $369 million for Muni, $323 million for children’s services and $113 million for libraries.

So, $4.6 billion becomes $3.7 billion.

Policy requirements drive spending on public safety. Voters mandated the police have at least 1,971 officers, and the Fire Department never decrease service from 2004 levels. This contributes to the $485 million and $329 million budgets of those respective departments. There are ample caveats here — 1,971 officers remains an elusive goal — but suffice to say public safety departments are popular: $800 million popular.

So, $3.7 billion becomes $2.9 billion.

Now the big players in health. About one in every five General Fund dollars comes from federal or state sources and can only be used for specific programs, like food stamps or in-home care. This money typically requires local matching funds that also come from the General Fund. Thus, San Francisco’s Human Services Agency books an $848 million budget.

The Department of Public Health operates similar programs, plus two large hospitals, and is $825 million of the General Fund.

So, $2.9 billion becomes a shade over $1.2 billion.

The remaining 39 departments have significant fixed costs themselves, notably pensions, such that even their budgets aren’t tremendously malleable. These departments build city projects and pave the streets (Public Works, $200 million); run our six jails and guard city buildings (Sheriff, $199 million); manage 220 parks (Rec and Parks, $98 million); represent The City in court (City Attorney, $72 million); and help me with this article (Controller, $62 million).

That’s the budget in a nutshell: The choices that are made, the hands that are tied. And when it’s all said and done, do you know how much the Board of Supervisors directly allocates each year? About $20 million. Out of nine billion dollars.

Alas, that process is a discussion for another day.

Conor Johnston is the chief of staff to the president of the Board of Supervisors, London Breed, and a Twin Peaks resident. The views here are his own.

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  • Mike

    Good article Mr. Johnston, I haven’t seen the City’s budget broken down to this level of specificity before. Our public money is spent (or at least allocated) before it even arrives. You didn’t mention a rainy day fund, but I hope some of the money at least is being kept locked away in case we hit another “bump” in the road. Keep sharing the insider’s perspective.

  • Allen Jones

    Thank you Conner Johnston.

  • sffoghorn

    Left unsaid here is the corruption associated with the choice of to whom lucrative public sector contracts are assigned. That is what it is all about, directing constrained tax dollar revenues towards the connected. The remaining $20m is the add-back process which is used to keep the politically connected nonprofits in line. That is why the of “progressive” candidates endorsed by such astroturf groups as SFVision and supported financially by public sector unions and nonprofits that have claims on the general fund are limited to catering to these operations while the interests of most San Franciscans are off the table.

  • Dominic Russo

    In order to comprehend a number like nine billion, a big to small breakdown, like Conor has detailed for us here, helps me clearly understand where dollars land and why. I think more transparent line item breakdowns will help inform our public, and inspire more participation in the process. Thanks Connor Johnson…

  • njudah

    fun fact: as long as voters continue to vote for bonds as “free money” for various projects, the city will have to pay back that money, with interest over time, and levy taxes on property owners. Another fun fact: so long as voters vote for set asides, they let politicians off the hook on their spending decisions. keep on voting, San Francisco you’re doing a bang up job.

  • MirrorTheObvious

    Within those hundred million dollar department budgets there is waste, padded salaries/benefits.

    Anybody who has at all worked in a public agency knows that dept heads always ask for more money for each new fiscal year budget. If you don’t ask for more, the other departments will lock in their gains at your department’s expense. And during lean years when your department has been frugal, all will be cut.

    There is little incentive to ask for less. i.e.:operate fiscally efficiently.

  • MJ

    I like reading books too, but $113 mil on libraries? That seems excessive. This article is troubling in that it shows that there is little oversight of where the vast majority of our tax dollars go.

  • Chris F.

    Pretty fascinating read. So if there is a surplus in revenue from SFO or water commision, it all goes straight back into their programs? I didn’t realize that. A lot of helpful info in here, thank you Conor Johnstone.

  • Yolanda Bellisimo

    Thanks for breaking down the budget in an easy to comprehend way. I’d like to see specifics about the enterprise departments – maybe in a follow-up article.

  • Local Wizard

    Robocop? This isn’t the fictional dystopian city of Old Detroit. San Francisco would be far better represented by Captain Planet.

  • kgelner

    There’s a big hole in the argument it seems to me, in terms of human services – the article says “San Francisco’s Human Services Agency books an $848 million budget.” It notes ” About one in every five General Fund dollars comes from federal or state sources and can only be used for specific programs, like food stamps or in-home care.” The key word there is “like”, because the one if five dollars from the general fund that need to go to specific programs are talking about ALL programs, some detailed in other points – not all human services programs. So the Health & Human Services budget is basically a huge slush fund where a ton of money is poured into and little of value seems to come out. You want a statue of Robocop, find out who is wasting or funneling money out of H&HS and get it from them.

    Heck, you could probably argue that a status of Robocop would increase the general feeling of well-being for those who viewed it – that would probably make more sense than other things the Health & Human Services department has funded.

  • Matt

    It’s about time someone explained our budget in a way we can all understand. Thanks for making some sense out of a cluttered mess. Now, about that statue…..

  • Picky

    So property taxes should go into fixing the streets?

  • SunsetBoy56

    Libraries are probably the best investment the City can make — if you think all they do is loan books, you need to look into all that they do apart from this.

  • Customer Support

    Looks like Conor’s vying for Breed’s or Weiner’s seat after they get voted out of office! Do you also vet Ms. Breed’s emails? I’m a constituent and have written her several times on many pressing issues in our neighborhood, never got a reply to any of them, nothing… Not even an acknowledgement that they were received.
    The two blocks in front of my house on gough have had the roadway dug up and paved 7 times last year!!! Very frugal indeed.

  • SunsetBoy56

    Excellent recital Conner — what’s missing and what is at the heart of dissatisfaction among residents is how all that committed money is spent, or to put another way: is the funding to good effect/are there performance standards to which departments must accrue and demonstrate alignment to sustain the level of funding provided? — the short answer if of course is No, though there are random exceptions of very good accountability to be offered — this explains why (among many examples) the City spends over $200M for the homeless problem with little signs of genuine improvement

  • Customer Support

    See my comment above.

  • Customer Support

    Yeah, like give the homeless a decent place to shoot up or shit on the bathroom floor!

  • SunsetBoy56

    touché!! unfortunately as the sole public building in the Civic Center that allows entry of all, it becomes the place for misbehavior…used to be worse and won’t get better until the homeless issue is better addressed at the macro level…now, if they entered City Hall and had their way, we might get to resolution sooner!

  • MistOfTheCity

    Mr. Johnston, could you expand on the health services calculation? You state that most of the money comes from federal and state funds that must be matched with city funds but then in the same breath say that HSA has a $484 million budget. Is this including federal/state dollars? You then state that DPH provides similar services but do not make this same breakdown. Seems pretty convenient political-speak when talking about complicated and complex to be superficial on calculations and make such sweeping opinions. Your report is just fodder to simply explain away and create mist over the real issues that your employer and the mayor will not address.

  • Rob Santos

    I wish that others in government, both locally and federally were as candid as this. Thank you, Conor. Very well written article. Looking forward to the discussion for another day!!

  • Chris F.

    Haha!

  • Chris F.

    Omg ur funny

  • neighbor

    Also, the reason Gough has been torn up so many times, is the repairs are all coordinated to happen BEFORE a re-paving. So the various private entities PGE, ATT, Comcast etc each must send their contractors out there to do work separately, and the City sends out different contractors too. There’s an entire construction management plan. I agree it would be awesome if each block could be opened up re-built and then closed forever – but urban infrastructure is complicated and has many private, public and quasi public entities at play. It’s more productive to learn about something before you critique it or ask information seeking questions, rather than just assert uninformed judgements. Try addressing your frustration first, then addressing others.

  • Customer Support

    The 4 pavings that have already been done aren’t enough?
    For your information I’ve got enough information to critique on the issues I’ve commented on. Your attempt to brush me aside by dismissing my cynicism and saying I’m uninformed might make you feel better about yourself, but it doesn’t impress me at all.

  • sffoghorn

    It is not “free money” if we have to pay it back in taxes. Perhaps that’s why the N Judah train never runs by your house? Why do you hate San Francisco voters so?

  • Eric Dew

    Actually, this and all other state and federal budgets are available at the respective websites. They are broken down to about the same level as this article. The difference is that it’s not in prose form. Just a large P&L breakdown.

  • Eric Dew

    You’re stating the obvious. But this applies in corporations just as well. Every department in corporations always ask for a larger budget. And then they shrink when the company’s revenue shrinks. Same with the government: department budgets shrink when tax revenues shrink. Duh.

  • pdquick

    Departments don’t pay pensions out of the General Fund. Pensions are paid from the Employee Retirement Service from funds invested on behalf of employees throughout their working lives. Did Conor Johnston mean to say “pension contributions?” If so, why single them out from salaries? It’s actually cheaper for the City to make contrIbutIons to SFERS directly than to pay employees the same amount and have them make them payments, because the latter drives up the salary basis on which pensions are subsequently calculated.

  • Sanfordia113

    Then why was the BART airport expansion paid for with bond revenues? Use SFO money to expand runway capacity and reduce BART fares between SF and SFO.

  • neighbor

    I wasn’t trying to impress you, I was trying to help you think about the issue more. Perhaps you are happy now that the work is done?

  • Customer Support

    So far so good. I suspect that they’ll tear it up for the 7th times in a few months.
    Perhaps if there was some organization in the planning department, they might try coordinating the work, don’t you think? Seems like a huge waste of resources to me.

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