State budget deals The City a hefty blow

The state’s budget has dealt a $26.5 million hit to city’s budget, according to a City Controller memo.

But services funded by The City’s operating budget will fare better than thought in August, when it was estimated the state’s budget would deal a $36.7 million blow.

The City was prepared for some of the bad news. It had set aside $18 million in its budget for the fiscal year that began July 1 to offset the expected financial hit from the state’s budget.

But San Francisco would need to come up with the difference “if The City chose to reinstate all services impacted by the state budget reductions,” City Controller Ben Rosenfield said a memo Monday to Mayor Gavin Newsom and the members of the Board of Supervisors. The state cuts impact funding for such services as AIDS programs, health reimbursements for drug and alcohol programs under Medi-Cal, welfare to work, shelter funds and child welfare services.

Newsom must now submit his plan for dealing with the shortfall by Oct. 5, under an agreement he struck with the Board of Supervisors during The City’s recent budget negotiations.

Newsom’s proposal could not go into effect until Nov. 19 to allow for a 45-day review by the Board of Supervisors, which could make changes.

The City closed a $576 million budget deficit heading into the fiscal year. It is possible that as a result of the poor economy The City will experience revenue shortfalls that will prompt the mayor to make mid-year cuts.

 
 

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