SF mayor unveils $12.2 billion budget with more than $1 billion in new spending

Breed: ‘I’m proud of the investments we are making’ in shelter beds, teacher stipends, public toilets

Mayor London Breed on Friday announced a $12.26 billion city budget proposal for next fiscal year with more than $1 billion in additional spending on items including stipends to retain teachers at public schools with underperforming students, 50 more treatment beds for homeless people suffering from mental illness and seven new public toilets.

Breed also re-committed to her goal of opening up 1,000 emergency homeless shelter beds by the end of 2020.

Elected to office in July 2018 to tackle San Francisco’s pressing challenges, Breed’s budget address highlighted spending increases on homeless and mental health services, street cleanliness and affordable housing.

The proposal for the fiscal year beginning July 1 increases the number of government jobs by 2 percent for a total of 31,830 positions. The current fiscal year budget is $11 billion.

“I’m proud of the investments we are making,” Breed told those gathered at Visitacion Valley’s Sunnydale public housing site. “And I am proud of the City we are working to build.”

Breed is up for re-election in November but faces no serious opponent. The deadline to file for the mayoral contest is June 11.

Breed, who herself grew up in public housing in the Western Addition, emphasized the importance of realizing the plans now underway to rebuild the dilapidated Sunnydale public housing site where she spoke, “just a few miles from our thriving downtown,” and the need to provide greater opportunities to the families living there and the residents citywide who “for far too long, have been left behind.”

The City needs to achieve equity, Breed said. “Equity means reaching everyone in our city, in every neighborhood, including those who have often been overlooked.”

The budget includes $10 million in funding to increase stipends for teachers “who commit to teach in public schools that serve students facing the most challenges.” The current program provides teachers with stipends of up to $2,000 a year. This funding could increase stipends up to $5,000 a year.

To address the housing crisis, Breed pointed to a proposed $600 million housing bond for November’s ballot and the need to streamline the approval process for all types of housing development. “We have to cut the red tape, the barriers, and the bureaucracy … for all housing for everyone,” she said.

There is also $140 million in Breed’s proposed budget for “the production and preservation of affordable housing, so we can buy more land, fully fund more projects, and preserve more rent-controlled housing.”

The budget proposal is further evidence that San Francisco continues to enjoy a healthy tech-fueled economy since climbing out of the Great Recession, resulting in continued revenue growth filling up city coffers.

In June 2012, the late Mayor Ed Lee, who led The City out of the recession, announced a budget proposal that totaled $7.6 billion and grew the government workforce to 26,878 positions.

Supervisor Rafael Mandelman said while The City is “blessed to have bounty in our city budget,” there remains a need for more.

“The incredible growth of wealth in the city has not been broadly distributed,” Mandelman said. “We have incredible wealth inequality and that has exacerbated our challenges. We have clearly a growing budget and we also have a lot more in way of public needs.”

Mandelman praised Breed’s increased spending for mental health and homeless services and said the mayor and board would spend the next month working out the details of her proposal.

“There’s broad alignment on priorities between the mayor and Board of Supervisors,” Mandelman said.

The more than $1 billion increase in the latest budget proposal reflects the state return of a portion of local property tax revenue that had gone into the Educational Revenue Augmentation Fund and includes funding for large capital projects at the San Francisco International Airport, Public Utilities Commission and the San Francisco Municipal Transportation Agency as well as the growth of salaries and benefits.

Since The City operates on a two-year budget, Breed’s proposal for next fiscal year builds on a baseline of funding already approved by the Board of Supervisors as part of last year’s budget process. That includes continuing to fully fund the Police Department’s four-year hiring plan, which will result in 50 additional officers next fiscal year alone and a total of 250 more by fiscal year 2021-2022.

One of the most controversial debates last year was whether to reduce the costly police academy classes to fund other priorities. The board decided to keep the funding for the hiring plan, but could revisit that decision. Board President Norman Yee has requested a hearing on police staffing levels, including the progresss made to have more duties performed by civilians.

Another issue that remains unresolved is whether to release funding for the Police Department to purchase stun guns, also called by their brand name Tasers. The board cut $2 million in funding for the devices last year and put an additional $1 million on reserve, meaning the department would need to make a formal request of the board to spend the money. Breed’s budget maintains the reserve funding.

The budget proposal includes a $12 million increase to The City’s $74 million annual street cleaning spending. That increase includes seven new mobile bathrooms, known as “Pit Stops,” “so people can use the bathroom with dignity.”

The budget assumes $20 million will come from companies willing to pay the Proposition C tax before courts rule if its legal, which could take three years, although no final commitments have been made. The City passed a law, which went into effect Monday, allowing companies to pay the tax and forfeit their right to get the money back if the tax is struck down. If it is enacted then they get a 10 percent break on what’s owed.

Despite an ongoing battle over Breed’s 200-bed Navigation Center proposed for the Embarcadero — neighbors are appealing the approval to the Board of Supervisors and have vowed to sue — Breed remains committed to opening more shelters elsewhere.

“In this budget, we are following through on funding our commitment to add 1,000 new shelter beds by 2020,” Breed said.

Toward the goal, Breed has opened 276 shelter beds. There are 280 more planned between the Embarcadero proposal and an 80-bed expansion at existing Navigation Centers, Civic Center and Division. The budget proposal provides $27 million to open the remaining approximately 440 beds at yet to be determined locations.

Breed may score a political victory Tuesday if the board passes her legislation, introduced with Supervisor Rafael Mandelman, to expand court-ordered treatment to those with substance abuse and mental illness who undergo at least eight emergency psychiatric holds, or 5150s, in a year.

She underscored the increased spending on behavioral health services, which includes 50 new beds at San Francisco General Hospital for homeless residents with mental health challenges and 50 beds for people suffering from both mental health and substance use disorder.

“Combined with the 100 beds we already announced earlier this year, that means we are committing 200 new beds for our most vulnerable residents this year alone,” Breed said. “That is the most significant expansion of behavioral health beds in a generation.”

Supervisor Sandra Fewer, the chair of the board’s Budget Finance Committee, which will now begin reviewing the proposal, vowed to go over it with a “fine-tooth comb” and to “see where there is waste, where funds could be better used.”

“The buckets of where the money is going is good,” Fewer said. “It’s all in the details.”

Supervisor Hillary Ronen, who sits on the budget committee, said, “All of this sounds great at a 100-foot level.”

“It’s really when you delve into how the money is going to be spent is when you start to make different choices with how you allocate the funding,” she said.

Asked about the budget’s growth, Ronen said that “When you are talking about a budget this big, which surpasses even the budgets of some European countries, it’s unacceptable to have the situation we’ve got on our streets with cleanliness, with homelessness and not having a system of care that works for people with mental illness and substance use disorders.”

“We are going to be drilling department heads,” she said.

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