New debt puts services in limbo

Five months after San Francisco officials cut many city services to the bone and raised prices on everything from pool visits to bus rides, taxpayers will again be faced with a round of slashing and burning, as The City projects a new $53.1 million deficit for the ongoing fiscal year.

The current shortfall to the roughly $3 billion general fund — the operating budget that pays for the police and fire departments, health services, street cleaning and parks, among other services — is based on decreases in property and payroll taxes, according to a budget report issued Monday by the city controller.

Further exacerbating the situation: City departments are not receiving expected revenue or are overspending. The Fire Department, for example, projects a $5.1 million shortfall, while the Sheriff’s Department projects a deficit of $2.7 million due to an unforeseen increase in the jail population.

The City closed one of its largest deficits in history for this fiscal year, which began in July — in excess of $500 million — through layoffs, service cuts and fee hikes. To do that, Muni fares were increased from $1.50 to $2 for a single adult fare, recreation centers reduced hours and staff, and a half-million dollars was cut from the opera, ballet and theater.

Additionally, about 900 city workers were laid off or reassigned. Among the latest potential casualties are more than 100 certified nursing assistants and clerical workers on the verge of losing their jobs, and hundreds more are facing reassignment or pay cuts.

About $100 million in new or increased fees also went into effect, making it more expensive for street fairs, food vendors, visitors of cultural institutions, and the use of pools and clubhouses. Cigarettes increased by 20 cents per pack.

Now, Mayor Gavin Newsom and city officials must find another $53.1 million in reductions to balance the budget for this fiscal year, which ends June 30. Under the City Charter, San Francisco cannot operate with a deficit. And a bleak outlook is already on the horizon for the 2010-11 fiscal year, which begins July 1, when The City will have to close a projected deficit of more than $350 million.

The deep cuts to public safety departments that were avoided at the start of this fiscal year, such as the controversial “browning out” of fire stations and canceling or postponing police academy classes, likely will return to the table for political debate.

Impacts on taxpayers will be more specific once city departments present their recommended cuts to the Mayor’s Office.

Chief of Staff Steve Kawa said Newsom met Monday with departments about the budget and plans to order them today to come up with reductions.

“I think it’s very serious,” Kawa said. “It’s indicative of the state of the economy.”

Newsom in the coming weeks is expected to submit midyear reductions to the Board of Supervisors, which will then have 45 days to act on them.

San Francisco city budget

$6.6 billion Total budget for fiscal year 2009-10
$576 million Deficit closed to start fiscal year
$53.1 million Projected deficit for current fiscal year
$25 million General fund reserve, which could be tapped to offset deficit

Breakdown of deficit

Proposed supplemental to restore clerical nursing jobs    -$8.0 million
Projected loss of property tax revenue    -$35.0 million
Projected loss of payroll tax revenue    -$24.8 million
Other projected revenue losses    -$13.4 million
Projected positive revenue from hotel room tax    $28.0 million
Other projected positive revenue    $9.7 million
Total    -$43.5 million

Department variances

Assessor-Recorder    -$0.9 million
City Planning    -$1.7 million
Fire    -$5.1 million
Human Services    $7.1 million
Juvenile Probation    -$1.0 million
Public Defender    -$1.7 million
Public Health    $1.0 million
Sheriff’s    -$4.0 million
Superior Court    -$3.2 million
Total    -$9.6 million

Source: City Controller’s Office

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