Audience members at a Budget and Finance Committee hearing on Wednesday Feb. 6, 2019. (Ellie Doyen/Special to the S.F. Examiner)

Spending deal to benefit teachers, homeless services moves forward

San Francisco’s debate over how to spend hundreds of millions of dollars in revenue came to a head Wednesday, ending in a deal to fund teacher raises and homeless services that the Board of Supervisors is expected to approve next week.

The board’s Budget and Finance Committee heard testimony from those seeking the funds like teachers and homeless advocates for nearly four hours before finalizing the deal. The committee is expected to vote Monday to send it to the full board for a vote the next day.

Board president Norman Yee called it a “very fair and balanced proposal to try and address as much of these issues as possible.”

Mayor London Breed’s spokesperson Jeff Cretan said, “We are evaluating what is coming out of committee, but it is encouraging to see that shelter beds, mental health beds and homeless housing units the mayor proposed to fund are still moving forward.”

Breed initially wanted homeless spending spread out over four years, but the committee’s proposal spreads homeless funding out over two years to free up funding for other priorities like teacher salaries.

A debate over spending priorities began last November when The City unexpectedly received funding from the state’s Education Revenue Augmentation Fund, which receives a portion of San Francisco’s property taxes and was established in the 1990s to address a severe deficit in California. When the fund meets state funding requirements for public schools and community colleges, the extra money is returned to local governments.

But it also comes as three tax measures for childcare, teacher salaries and homeless services in the June and November elections — “baby” Prop. C, Prop. G and “big” Prop. C — are tied up in the courts due to a lawsuit filed Howard Jarvis Taxpayers Association calling into question whether such measures can pass with less two-thirds of the the vote but more than 50 percent. The lawsuit has delayed the availability of the funding and may jeopardize it altogether.

Supervisor Sandra Fewer, chair of the board’s Budget and Finance Committee, said that the proposed use of ERAF funds is meant to fill the gaps from the revenue held up by the lawsuit. “We realize that we are held in hostage of a court case that actually is against the will of the voters,” Fewer said. “We don’t know when that will be resolved.”

SEE RELATED: SF supes reach tentative agreement on how to spend $181 million in ‘windfall’ money

She said the proposal is meant to ensure raises that the tax measures would fund for early educators and San Francisco Unified School District teachers are intact and “and that our housing and homeless projects that are in the pipeline can be immediately funded.”

One of the biggest changes Wednesday was adding more funding to the $185 million proposal by using revenue from ERAF that would otherwise flow into the city’s so-called rainy day reserve fund, some $52 million. This money would go into a fund to pay for raises of salaries for teachers and early educators in fiscal year 2020-2021, if needed. This is in addition to the near term funding of $10 million for early education salaries and $13.5 million for school district salaries.

The change was introduced as an amendment by Supervisor Gordon Mar. “Without this amendment, educators in our city are left without stability, impacting our schools, our communities and our future,” Mar said. “We need to ensure our teachers are paid and paid fairly.”

The spending deal also includes $111 million for affordable housing, such as $40 million for buying small apartment buildings to prevent displacement, and $46 million for homelessness and behavioral health services.

Most of the testimony Wednesday was from teachers and homeless advocates who said they felt pitted against each other in the debate over the funds. But there were also calls for funding from those living in Sunnydale and Potrero Hill public housing to address problems including black mold and broken water heaters. The deal allocates $9 million to those public housing needs.

Teachers warned that without the funding it would be harder to attract or retain teachers.

Jeffrey Finger, a geometry teacher at Balboa High School, said that pay bumps granted after Prop. G passed helped boost teacher morale, and the funding was needed to “not have our salaries rolled back.” “Money is what shows value of our occupations in The City,” Finger said. “Our teachers are trying to stay here.”

As negotiations over the deal continued Tuesday among the supervisors, backers of the homeless tax measure pushed for using $171.4 million in ERAF funding for 875 homeless housing units, 340 shelter beds, behavioral health services for 397 individuals and homelessness prevention services for 3,100 households.

Glide Advocacy Program Manager Ben Lintschinger said there was an urgency. “People without housing die,” Lintschinger said. “The time we have until Prop. C funding comes through is incredibly crucial. The difference between $45 million and $171 million, for instance, is the difference between dozens of people being able to stay with us.”

But board members emphasized the need to strike a balance among the competing needs.

“Where we have a landed is very good,” said Supervisor Rafael Mandelman. “The problem is that even if we allocated the full $185 million to any of these priorities we would be so far short of what is needed for our public schools, or for our early child educators, or for our homeless families or folks who are getting evicted.”

The next funding debate will be underway in short order. City departments must submit two-year budget proposals to the Mayor’s Office by Feb. 21 that Breed will use to put together her first city budget proposal by June 1. Her proposal must close a projected $107.4 million budget deficit in the next fiscal year beginning July 1, and $163.4 million in the following fiscal year.

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