Daniel Lurie didn't get everything he wanted in his first S.F. budget. Neither did his critics

San Francisco Chronicle​

9 hours ago

Mayor Daniel Lurie 's first San Francisco budget negotiations were not as dramatic as they could have been, despite vigorous opposition from labor unions and nonprofits over his plan to close the city's huge deficit.
When Lurie introduced his proposal to eliminate a roughly $800 million two-year shortfall, he sought to cut 1,300 vacant jobs and about 100 filled positions. But city lawmakers on Thursday reached a deal with Lurie to prevent 56 layoffs, blunting the impact on San Francisco's vast municipal workforce that is already one of the largest in the country. The mayor allocated funding for about 33,000 city employees next fiscal year.
Unions sounded the alarm about the budget even before it was proposed by Lurie, unsuccessfully urging him to avoid deep cuts by calling on tech companies to drop lawsuits seeking tax refunds. As the Board of Supervisors vetted the budget plan, labor groups escalated their resistance, disrupting a meeting until police removed protesting workers in handcuffs. Nonprofits also vehemently objected to Lurie's proposal to cut about $185 million in grant and contract spending.
Ultimately, the deal that the supervisors' budget committee brokered with Lurie scaled back some of his most aggressive plans. By tweaking the mayor's two-year spending proposal, supervisors freed up $15 million to reduce layoffs, and they reallocated $26 million to invest in a variety of services that Lurie originally intended to cut. The money is a drop in the bucket of San Francisco's $7 billion general fund, but it will help avoid some of the most painful belt-tightening originally envisioned by Lurie.
The budget deal, which must still be approved by the full board of supervisors next month, illustrates how Lurie is trying to balance the demands of lawmakers and organized labor while making good on promises to reduce San Francisco's persistent deficits.
He didn't give the unions or supervisors everything they wanted. But he also didn't seek a massive overhaul of the city bureaucracy or press for layoffs on the scale the city saw during the Great Recession.
Lurie said in a statement that the budget deal would help the city avoid spending 'money we don't have, while focusing our resources on providing safe and clean streets, addressing the fentanyl crisis, and advancing our economic recovery.'
'Passing this budget also required painful decisions that were, unfortunately, necessary to set up our entire city for success,' Lurie said. 'Leadership means making those tough decisions, and this group of city leaders did that.'
Supervisor Connie Chan, who chairs the board's budget committee, said Lurie was put in a difficult position partly because recent city budgets under his predecessor, London Breed, were balanced with a heavy reliance on temporary funding sources. Lurie used far less one-time money in his first budget proposal than Breed did last year, according to the city controller's office. The mayor and supervisors also set aside $400 million to help shield the city from federal funding cuts under the Trump administration.
'We are looking to the future about how we protect San Francisco and make sure that San Francisco is solvent,' Chan said. 'That really is the common goal that got us through this budget process… I recognize that and I think the mayor recognizes that.'
Chan said she and her colleagues have tried to do 'whatever we can to reverse the layoffs for our front-line workers and to protect as many direct services to the most vulnerable as possible.'
'Under the circumstances, I think that we have delivered that,' she said.
SEIU 1021, the city's largest public-sector union, had a mixed reaction to the budget deal.
Union president Theresa Rutherford said in a statement that her group was relieved that the agreement between supervisors and the mayor 'reverses layoffs of frontline workers.' But she was 'disappointed and concerned' about cuts to nonprofits and city services that remain in the spending plan. The budget would still cut about $171 million from grants and contracts, a $14 million reduction from what the mayor first proposed.
'We've been fighting hard, but our work is not done,' Rutherford said. 'We will continue to fight to protect public services, especially for those in our community who need them the most, and the rights of all the workers who provide those services, public and nonprofit alike. And we will hold the mayor accountable for reversing these layoffs.'
One of the biggest sticking points in this year's budget negotiations involved changes that Lurie proposed in how the city spends revenue from a 2018 business tax that funds homeless services.
The tax measure, Proposition C, earmarked specific percentages of the proceeds for permanent housing, mental health services, homelessness prevention and shelter and hygiene services. Lurie wanted to redirect about $90 million in unspent revenue from the tax to fund his priorities, namely homeless shelters, which he thinks are in dire need of expansion to get more unhoused people off the streets. The mayor also sought more flexibility in how his administration spends future revenue from the tax.
After an extended debate and negotiations with the mayor's office, the budget committee reduced Lurie's $90 million reallocation request down to about $30 million. The committee also agreed to let Lurie more freely spend up to $19 million in extra revenue from the tax if approved by a simple majority of the board.
That prompted some intense pushback from Supervisor Jackie Fielder, who questioned why supervisors were 'going to do away with a key provision' of Prop C, which originally required a supermajority board vote to alter the funding categories.
'Should we even have a Board of Supervisors at this point?' Fielder asked at a budget committee hearing.
The Coalition on Homelessness advocacy group also lamented the decision, calling it a 'mayoral power grab' in a news release.
'San Francisco is not a kingdom, and it is not a corporation, it is a democracy,' Jennifer Friedenbach, the coalition's executive director, said in a statement. 'Prop C … was carefully constructed to ensure that data-driven, voter-approved mandates existed to build a responsive and efficient homeless system that was protected from wrongheaded political winds.'
Chan, the budget chair, defended the committee's decision as a fair compromise.
'We negotiated with the mayor the best outcome (possible) in a very balanced spending plan that supports homeless families and homeless transitional-age youth,' Chan said in an interview. 'I also understand that at this moment and this time, there is also an urgent need to solve the crisis that we see on our streets.'
Aldo Toledo contributed reporting.