City Budget Gone Bad
The County of San Francisco is yet again hit by a looming budget shortfall that would require budget cuts to bridge the gap. London Breed, the city mayor predicted a worsening outlook by late last year quoting that the city was already facing a shortfall in its $5.5 bullion find for the upcoming fiscal year as he warned the County’s Board of Supervisors against any additional unfunded commitments. Today, the residents of San Francisco, especially the Bay Area, are struggling to come to terms with the budget deficit that has nearly quadrupled in just a couple of months. If fact, they are questioning why the Board was never alerted on the magnitude of the problem.
What the Board of Supervisors does not seem not to understand is that the Board of Supervisors have always advocated for an increase in city spending even though the district was heading towards a multi-million-dollar deficit. Moreover, it was warned against such unfunded commitments by the mayor.
The Board is perfectly aware that the average annual budget is close to $9 billion according to recent figures and there are several legal procedures involved in the process of allocating funds, some of which are voter-imposed set-asides, that prevents them from allocating above $20 million directly. However, the Board doesn’t seem to care about the constraints. It is the responsibility of the Board as the budget managers to design effective models to various departments within San Francisco according to policy requirements.
Approximately 32% of the 9 billion budget is charged for direct services, 18% for property taxes, and 15% for federal and state money. Other sources include local taxes and sales that add up to 12%, business taxes at 7%, while the rest like rents and concessions account for the remaining 6%.
These figures should balance the expenses that are supposed to be controlled by the board but they have failed repeatedly over the past two years by advocating an increase in city spending when the revenue is decreasing.
The values have remained unbalanced from time to time and this is one of the biggest failures by the elected officials whose main function is to control the budget. Moreover, one would wonder why a city with a multi-billion-dollar budget has so many problems in the streets. It simply means, for a while, the Board jointly failed in policy development as there have been no concerns over the state of housing in the city. Now however, the city crises are no longer a secret since you are likely to meet more than a thousand homeless people across the street, sidewalks littered by wastes including human waste.
Instead of good governance, we have witnessed multiple spending increases. For example, in February 2019, a spending package was advanced by the Board to fund a multiplicity of priorities, some of which are sums between $200 million and $250 million. Their claims that other counties, after all, have done the same and have been getting similar “windfalls”.Again, the city finds itself in this mess because spending has spiked while at the same time, things like public schools’ enrollments are either declining. This narrative that increased spending on education was a one-time golden ticket in other districts is false and misleading.
In fact, this is a coverup for lack of proper budgeting and spending by the Board. Instead of making long-term investments in the city’s financial future, the Board is so used to the revenue that grows without effort that they issue outlandish policies we can't afford.
In December, the projected shortfalls in the budget over the next two fiscal years were approximately $420 million while the gap between the proposed spending plans and available revenue in San Francesco has nearly quadrupled. This will now get even worse with COVID. To this point, however, this isn’t a one-time problem, it started two years ago. Last year’s budget of $12.3 billion was the largest in the city’s history. This was a 10 percent increase from the 2018’s budget. The city, however, has yet again failed to meet its staggering budget growth with a proportional increase in capital investment or services.
The deficit prompts the question of what San Francisco has done with its wealth.
We see the Municipal Transportation Agency struggling with failure after failure, housing shortages, dirty streets, and homelessness. Yet, the San Francisco Board of Supervisors offers an anemic $1,500 credit for a typical solar installation. Municipal employment has eaten up the largest share over the two years with salaries and benefits taking up close to 45% of the total budget approximated at $175,004 for each employee in a city where median household income is just $96,265. Again, $873 million is spent on grants; a figure that is close to the total spent on capital projects.
All these are attributed to total mismanagement and failure in duty as elected officials.