Supes, mayor at budget impasse

UPDATE: At 2 am a deal, of sorts, was announced. More details to come.

The mayor and the supes remained at an impasse Wednesday night, with (as of 11pm) no budget deal on the day the Budget and Appropriations Committee was set to vote on it.

That alone is not unusual: These talks often go on and on, and the committee vote is delayed until the members and the mayor come to some sort of rough agreement.

What’s different this time is that the mayor is refusing to back down on some of his positions, even when the supes have found money in the budget to prevent layoffs and fund some, although by no means all, of the services that were on the block.

According to City Hall sources, the Budget and Legislative Analyst found $30 million in savings in this year’s budget proposal. Typically, the supes ask the mayor to use that money to fund their priorities—and almost always, the mayor goes along. That’s how the process works.

This time around, I’m told, Lurie is adamant that he wants more cuts, including potential layoffs—and wants the authority to use the Prop. C housing money for shelters, not housing.

In fact, part of the legislation that would implement the budget includes this language:

Under the authority in Business and Tax Regulations Code Section 2811, the Board of Supervisors authorizes the City to expend future revenues that will be deposited in the OCOH Fund through fiscal year 2027-28, after addressing the specified costs required under subsections 2810(b)(1) and (2), among any or all of the eligible programs to address or prevent homelessness as described in subsections 2810(b)(3)(A)-(D), notwithstanding the specific percentage allocations that would otherwise apply.

Prop. C, an increase in taxes on the city’s largest businesses, was passed by the voters, in 2018 and includes specific language stating at least 50 percent of the money must go for permanent housing for people experiencing homelessness, and no more than 10 percent can go for temporary shelters.

The supes can only change that with a two-thirds vote.

For a lot of board members, this is a non-starter. For Lurie, apparently, it’s not negotiable.

Some of the supes, including Budget Chair Connie Chan, are not going to approve a plan opposed by labor, which means a plan that includes layoffs of city workers.

The committee approved a few minor items tonight, but the big items are not moving right now.

The People’s Budget Coalition folks are at City Hall tonight watching the situation and making some noise. Lurie is playing hardball. So is labor.

The problem for the mayor is that right now, I don’t think he has six votes to pass the budget, not without some of the changes he’s resisting. (Does Joel Engardio, who is facing a recall, want to anger the entire united labor movement in the city?)

It’s entirely possible that the parties will reach a deal in the next few days, but if not, it would create a highly unusual situation, where the Budget and Appropriations Committee would not endorse the budget and the mayor would have a fight at the full board, without a clear outcome.

Several longtime City Hall insiders told me the delays are common, the negotiations are normal—but the refusal to work with add-backs and labor is unprecedented.