State Budget Crisis Hits S.F.

Instead of the expected gut-punch, the city sustained an open-hand-slap on Friday, when Mayor Gavin Newsom quietly submitted his revised budgetary proposal to the Board of Supervisors. The state’s budget will cut $26.5 million in funding to San Francisco’s health and human services affecting pregnant women, children and AIDS patients, among others.

Hardest hit in the Mayor’s proposal are local emergency room physicians, which would see $1.1 million in funding cut from their budget this year. “This is the first I’ve heard of it,” said Rachael Kagan, director of communications at San Francisco General Hospital, adding that the hospital would prefer not to comment until the board makes its final decision.

San Francisco General is the main hospital serving the Mission District.

The board has 45 days to pass or reject the cuts.

Substance treatment programs would also see a citywide $700,000 cut. The mayor’s proposal says that the city will be able to sustain current levels of service, however it will not be able to expand the program should need increase.

Greg Wagner, the mayor’s budget director, said the cuts could have been worse.  “Luckily the mayor and board had the foresight to pass a budget which included an $18 million reserve in anticipation of those cuts. We were able to use that reserve to absorb most of it.”

However, with Sacramento still reeling from the state’s budgetary crisis, much of the city’s funding remains uncertain. Although the current round of cuts were less than projected, the mayor and the board are now faced with making up $8.5 million in lost state funding.

The mayor’s plan had at least one beneficiary. It would reimburse 81 percent of the $800,000 cut from Med-Cal. The funding is slated to be used for patients receiving methadone treatment.

The City Controller’s office had originally projected that health-related cuts would be much higher, however the state Department of Public Health recently announced that it would correct its funding deficit through a round of layoffs. For now, the move has saved the city from an additional $6 million in cuts to services.

The city has also agreed to contribute to programs serving distinct populations, such as pregnant women, in order to qualify for an additional $300,000 in aid from the federal government.

But few believe this will be the end of the cuts.

“We expect that in the coming months the state’s financial problems will not be over,” said Wagner, “We will continue to have discussions about what cuts are coming to the city and how we can deal with them.”

In addition to the cuts, the state will take $123.3 million in property tax revenue from San Francisco this year. Under Proposition 1A, Sacramento has the authority to borrow from local municipalities during times of fiscal crisis. The city plans on making up for the loss by selling bonds and borrowing from a joint powers lender, which the state has promised to set up. As of now the plans are not yet finalized.

Until this year the city charter gave the mayor the power to make unilateral cuts to city services in response to state funding shortfalls. After months of haggling over the first round of cuts however, the board passed an ordinance in June that shifts the power to reject the mayor’s plan back to them.

The coming weeks will show how the Supervisors plans on exercising their new authority.