Mayor Gavin Newsom will swing the budget ax one last time to help close a deficit that exceeds $300 million before leaving for statewide office.
San Francisco services could be on the chopping block after department heads were told Wednesday to come up with cuts to close a $379.8 million deficit.
The cutbacks come on the heels of reductions that were made to close a $522 million deficit for the current fiscal year, which began July 1. San Francisco closed a $575 million budget deficit the year before.
On Wednesday, Newsom, who was elected lieutenant governor in November, said he plans to make budget cuts before he leaves for the statewide office, which likely will be Jan. 3.
“I’ll make some of the tough decisions now so the interim mayor has to make less of them later,” Newsom told department heads Wednesday afternoon.
The deadline from the mayor for the department heads is Dec. 21, giving Newsom just a few weeks to act on the information. He told them to come up with 10 percent in cuts, which would result in a total savings of about $108.7 million.
Also, there is a request to come up with another 10 percent in “contingency” cuts by February, when the departments will submit their proposed budgets for next fiscal year. Newsom said at least 2.5 percent of the proposed cuts must result in savings for the current fiscal year.
Newsom’s cuts could draw criticism from the Board of Supervisors’ progressive bloc, which has long battled the more moderate mayor about spending priorities.
But Newsom’s budget instructions also ensure the interim mayor will have something to work with when assuming office. It remains unclear who the board will appoint to serve as interim mayor, which takes six votes. A final decision could be made Jan. 4.
Newsom spokesman Tony Winnicker said the mayor believes The City can close the deficit, as it has done in the past, “with minimal, measurable reduction in service [and] few layoffs of critical employees.”
The reasons San Francisco is facing a new budget deficit include a shortfall of about $86.4 million in mostly state and federal revenue and $293.4 million in increased expenditures.
Among the escalating costs is $34.8 million in pay alone, even though labor unions agreed to make a total of $250 million in concessions during the current and upcoming fiscal years.
San Francisco currently employs 26,107 workers, the lowest number since 1998. Health and dental benefit costs for city workers and retirees are increasing by $24.5 million.
San Francisco will turn to city departments again to make budget cuts for this fiscal year and the next one.
$6.5 billion Total San Francisco budget
$379.8 million Shortfall forecast for 2011-12 fiscal year
20 percent Cuts mayor asked department heads to come up with before end of year
$108.7 million What 10 percent across-the-board cuts from departments would save San Francisco
$522 million Shortfall closed for current fiscal year, which began July 1
$575 million Shortfall closed the prior fiscal year
26,107 Workers employed by The City — lowest number since 1998