Mayor signs $6.5 billion budget

Mayor Gavin Newsom signed a $6.5 billion budget Wednesday but said The City will have to make cuts in coming months in an effort to reduce a projected $250 million shortfall for the next fiscal year.

After signing the budget, Newsom directed the city controller to form a committee — composed of the Board of Supervisors, unions, budget experts and academics — to recommend cuts by Oct. 1 to the current budget.

The projected deficit for fiscal year 2009-10, tabulated by the controller, could change drastically once the state budget is finalized in Sacramento. In addition to losing state funding, the federal deficit also could inflate The City’s budget shortfall.

Without providing specifics, Newsom said that in order to add money to an already low reserve fund — and in turn maintain San Francisco’s bond rating — The City would have to “slow down” spending on certain programs.

“That’s not going to suit everybody,” he said. “But we’ll do it in an appropriate and thoughtful way.”

One way The City is looking to cut costs is by clamping down on the use of overtime. The Board of Supervisors will vote on legislation Tuesday that would not allow city employees to work more than 30 percent of the number of hours an employee is ordinarily scheduled to work.

But Newsom, who helped draft the bill, said that while the legislation would save millions of dollars for The City, it still wouldn’t be enough.

The 2008-09 budget was balanced after closing a $338 million deficit by cutting several city services. Doing so did not result in mass layoffs, but hundreds of vacant positions were deleted from The City’s payroll.

In November, Newsom called for an immediate hiring freeze and 13 percent across-the-board cuts for all city departments. But many departments managed to avoid such drastic cuts.

One of the hardest-hit departments, the Department of Public Health, had almost $30 million in cuts originally proposed by Newsom restored by the Board of Supervisors. The mayor also added an additional $25 million investment from last year to Healthy San Francisco, The City’s universal health care program.

The Board of Supervisors approved the budget Tuesday by a vote of 10-1.

Supervisor Jake McGoldrick, head of the Board of Supervisors Budget Committee, said it was important to keep The City’s reserves high, especially in an election with so many bond measures on the ballot.

“If you don’t keep the reserves high, you’re going to pay for it on the other end,” McGoldrick said.

The budget includes more than $1 billion in spending on public safety, an increased budget of $38.7 million for street repaving and $76.2 million for education, Newsom said.

bbegin@sfexaminer.com

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