Final Budget Passes, But Exposes Fatal Flaws in Charter

by Paul Hogarth on July 21, 2010

The Board of Supervisors adjourned shortly before midnight last night – after passing the final budget with Mayor Newsom’s blessing, but also dropped two Charter Amendments and postponed a third for the following week. The Board Budget Committee had done a great job on July 1st passing a balanced budget that saved crucial services. But because they could not get the Mayor’s approval before sending the budget to the Full Board, there was no assurance Newsom would spend any of this money – making it an incomplete victory. This forced the Supervisors to cut a deal last night, and some will no doubt complain about its details. But the Board did what they had to do – under our current system – to protect funding priorities. Until we amend the City Charter to end the Mayor’s unilateral power to refuse to spend money, the process will keep being this one-sided and dysfunctional.

Normally, the Budget Committee cuts a deal with the Mayor around June 30th or July 1st – which preserves “add-back” money. In fact, most non-profit employees who get cut by the Mayor’s Office each year take their annual vacations in July – after spending an exhausting month fighting to restore their funding. The budget still has to pass the Full Board for final approval before the end of July, but that step is often just a formality.

But this year, Newsom would not come to an agreement with the Budget Committee. Only a $4 million gap existed in negotiations, but Newsom insisted that the Committee dump a series of Charter Amendments curbing the Mayor’s power. Frustrated, Budget Chair John Avalos finally passed a budget without the Mayor’s support – which saved crucial services. But we knew there was no guarantee the “add-backs” would be honored.

That’s because the City Charter gives the Board (as the legislative branch) the power to appropriate money, but only the Mayor (as the executive branch) the power to spend. It effectively gives Newsom a “back-door veto” of any funding the Supervisors feel should be funded – unless the Board gets the Mayor to promise he will honor their priorities.

After the Budget Committee passed the budget on July 1st, budget negotiations stalled. As Chris Roberts reported in the SF Appeal on July 15th, Avalos said Newsom had not spoken to him since July 1st – and he had only met with the Mayor’s Chief of Staff two or three times. From what I can tell, there were no budget negotiations until yesterday – when the Board recessed at 5:00 p.m., and re-convened 4½ hours later.

So what was the end product last night, after the Full Board passed the final budget?

First, here is the good news. All the $40 million in “add-backs” the Budget Committee had passed on July 1st were intact, along with a few more restorations that included: (a) $50,000 of the $100,000 HSA-funded program for Hoarders & Clutterers, (b) $500,000 of the Ethics Commission Public Finance fund, (c) $800,000 for psych beds at SF General Hospital, and (d) another $1 million in violence prevention programs.

In exchange, the Supervisors agreed to restore two of the Mayor’s Pet Projects they had previously cut out of the budget – $250,000 for the Kids2College Savings Program (or Baby Bonds II), and $260,000 to get a permanent home for Project Homeless Connect. In addition, the Mayor insisted on restoring the one Fire captain position the Budget Committee had cut.

The latter is an EMS Captain position that can be done by a civilian employee, and who the Firefighters Union had told Budget Committee members they could concede. Despite media coverage on bloat in the Fire Department, final talks with Mayor Newsom to pass a budget ended up restoring the only position that the Budget Committee had cut during deliberations.

But again, the Supervisors didn’t have much of a choice – not when failing to make a deal would mean the Mayor can ignore all the “add-backs,” and make unilateral cuts in the middle of the year. The price for Newsom’s Pet Projects was secure “add-backs.”

Similar to what happened last year, the Board got Newsom to agree to two things that should secure the “add-back” money. One was a requirement that – should cuts due to the state budget become necessary, the Mayor will re-submit a proposal for “mid-year cuts” to the Board for a formal “up-or-down” vote. Of course, such a measure ought to be required in the City Charter – so it doesn’t become a bargaining chip the Board has to demand each year.

The other was to put $44 million of the budget – an equivalent of how much there are in “add-backs” – on reserve, so that the Mayor could not spend that money until the Board releases this funds. Effectively, this puts the “add-back” money at the top of the funding priority list – because the other $44 million has to be spent later. The Supervisors passed a similar proposal by David Campos last year, and the effects of that strategy were quite successful.

Of course, the Supervisors also rejected two Charter Amendments – which would have split appointments to Commissions between the Mayor and Board. Ross Mirkarimi’s proposal for the Recreation & Park Commission failed by a 6-5 vote, and David Campos tabled his measure to change the composition of the Rent Board. A third, which would allow for split appointments to the MTA Commission, was postponed until next week.

This led Supervisor Chris Daly to accuse some of his colleagues of engaging in quid pro quo – as Newsom had insisted three weeks ago that these Charter Amendments be disposed. But there was never any guarantee that the voters would pass these “split-appointment” measures, which do not have the same track record of passing like they did in the Willie Brown era. When the alternative was unilateral mid-year budget cuts, the Board was stuck between a rock and a hard place – and I don’t fault the choice they made.

But the Supervisors passed a Charter Amendment yesterday that could curb the Mayor’s power, and at least bring a vestige of function to City Hall. While it would not block the his unilateral power to make budget cuts, Question Time would require Newsom (or any Mayor) to make a monthly appearance at the Board of Supervisors for policy discussions.

The voters passed Question Time as a non-binding resolution in 2006, but Newsom refused to attend. It was back on the ballot in 2007 as a mandatory Charter Amendment, and the Mayor then worked feverishly to defeat it with mass corporate money – and it failed narrowly.

“I can’t think of a better time than right now for the Mayor to come speak to us,” said John Avalos at the Board meeting. “He should come talk to us about the Budget.”

Not only can the Mayor refuse to spend appropriated money – giving him an effective trump card in the budget process – but he’s under no obligation to meet the Supervisors at a public Board meeting, opting instead to cut deals with them behind closed doors. And despite the Supervisors spending hours yesterday hoping for a resolution to this year’s budget – as people like me kept pestering them in the hallway – we never saw the Mayor.

Question Time would not resolve all the dysfunction and imbalance that exists in our budget process, but as a Charter Amendment it would at least be a good start.

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