Set-asides tie up city funds

As The City looks to close a projected $291 million budget deficit for next year, officials have their hands somewhat tied because of funds that must go to voter-approved spending measures.

Currently, approximately $861 million, or 30 percent of The City’s revenues, go to so-called set-asides. With San Francisco facing nearly $40 million in cuts in state monies, contentious budget battles have already begun.

The San Francisco Planning and Urban Research Association, a public-policy think tank, published a report this week on budget set-asides. The report explains that set-asides allow residents to set budget priorities but also limit flexibility.

“When there is a deficit, there are few places where The City can look to share the burden of cuts within the budget,” according to the report.

Some of the voter-mandated measures include required spending on a wide range of services and programs such as a minimum number of police officers, the Municipal Symphony and Muni.

The City has a $6.07 billion budget for the current fiscal year, but only $1.1 billion of that is available to legislators to determine how it is divvied up, according to The City Controller’s Office. That $1.1 billion equals 18.3 percent of The City’s total budget and 39 percent of The City’s General Fund.

SPUR makes five recommendations to help The City with its set-aside issue: Require new and existing set-asides to expire; allow city legislators to amend provisions without going to the people for a vote; require a City Controller’s statement on the cost of set-aside when on the ballot; require a controller’s analysis of outcomes every five years; and provide a clause for the suspension of set-asides in a qualified fiscal emergency.

San Francisco’s status as both a city and county sets it apart from other California municipalities because programs otherwise operated by a county are now included within The City’s budget, said Dwight Stenbakken, the deputy executive director of the League of California Cities.

Most California cities do not have municipal services “locked in,” allowing government officials the discretion to spend where needed during difficult budget years, Stenbakken said.

Mayor Gavin Newsom, who has supported current set-asides, has said recently that there needs to be a new requirement when a set-aside is proposed identifying where the money would come from. The mayor has inquired about how exactly to do that, mayor spokesman Nathan Ballard said.

dsmith@examiner.com

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