The looming train wreck that is the San Francisco budget will start to take shape this week when the supes Budget and Finance Committee gets a briefing from the Mayor’s Office Thursday/8.
The mayor has already said that the budget for next year is out of whack by as much as $119 million, and that number could grow over the next few years to more than $800 million. At last week’s Budget Committee meeting, Sup. Katy Tang suggested that the current deficit could be as much as $350 million.
The reality is that all of these numbers are guesses. We don’t know exactly how much sales tax or property tax or transfer tax will come in; that changes week to week. We do know that the mayor balanced the last budget on the assumption that his sales-tax increase would pass, and the voters rejected it, which blew an instant $150 million hole in the budget.
That kind of talk has the mayor’s budget director sounding tight with the money – Sup. Sandra Lee Fewer was unable to get even a relatively tiny amount of money for the Public Defender’s Office (her original request was less than one tenth of one percent of the city budget).
But neither the mayor nor Board of Supes President London Breed has shown any signs of major concern over the pretty clear reality that President Trump and the GOP Congress will soon cut vast sums of money that used to go to cities.
Look at any week’s agenda for the Budget Committee. On the same day that the members will hear about the next budget, they will vote to accept and spend more than $900,000 in federal grants. Check out this list of emergency service jobs that are entirely funded from federal grants. That’s just a tiny fraction of the money SF gets from the federal government every year, and given everything the GOP has said about the next budget, a fair amount of it is going to go away.
Trump, for example, has announced that he wants to cut the Environmental Protection Agency by 20 percent. We are used to news like this; EPA grants have long helped this city fund local programs. That kind of money? Gone.
When the city starts to face that reality, there will have to be some discussions of something the mayor has been mostly running away from: How do we raise revenue, a lot of new revenue, not from the poor and working class (sales taxes are regressive) but from the people who are doing well know and will do even better under the Trump tax cuts.
Otherwise we are looking at major service cuts – and they can hit fast. The Trump budget will be announced this month, and the Democrats can’t block it.
We passed the “Mansion Tax” last fall for free City College. What’s the “Trump Tax” that can preserve city services – and how to we pass it?
The state’s going to be in the same position, facing a loss in the tens of millions of dollars.
Long term, that is over the next four years, Sacramento is going to have to make some serious changes. State law puts all kinds of mandates on cities, but strictly limits our ability to solve problems. The state won’t let us extend rent controls to vacant apartments (the most powerful way to prevent displacement). The state won’t let us stop no-fault evictions.
And the state won’t let us levy progressive taxes.
Portland is able to tax companies that pay their CEOs exorbitant sums because under Oregon law, cities can tax the income of corporations. New York and Philadelphia have city income taxes, which are the best way to raise money: You set the rates right, and the rich pay the largest share – and since nearly everyone who would be hit by a progressive local income tax itemizes deductions, and local taxes are deductible, some of that money comes directly from Washington.
California won’t let cities do that.
Former state Sen. Mark Leno passed legislation that allows cities to levy their own vehicle license fees (car taxes). That’s a regressive tax, too – unless you exempt, say, the first $20,000 in value and only tax more expensive new cars.
But the state is going to have to follow that model, and allow cities more flexibility on taxes and regulations; that’s the real anti-Trump agenda.
Is the mayor willing to go to the voters and support a progressive revenue measure? Is he willing to reject service cuts and find other ways to raise cash (like increasing the transit impact fee on downtown developers)?
Or is he going to say: We have to live within our means, too bad, but service cuts are just part of the deal?
Because that’s what Trump wants. All of the things we need to do to resist him coast money. And the best way to fight him is to say that the agenda of eliminating social, environmental, and regulatory programs is wrong, that we will block it here at home – and that we are going to make the corporations and the wealthy pay.
That’s the next big front in the anti-Trump battle, and it comes down to one word: Money.