San Fran is in trouble. Over the next four years the cost of pensions are going up a total of $847 million—with not a dime to finance that. This is a city that tries to tax everything—they are even sponsoring a bill in Sacramento to allow the city/county to create an income tax. Pass that and you will see the city lose its most productive individuals and companies. That will be a tax too far. These companies can do the same work in Reno or Las Vegas, or Texas, without the State and local income tax.
““We likely have significant and severe federal funding cuts coming, but it is entirely unclear about the timing of them, what the ultimate scale will be,” City Controller Ben Rosenfield told the Board of Supervisors Budget and Finance Federal Select Committee on Thursday. “It’s unknowable at this moment.”
San Francisco’s current budget relies on $1.2 billion in federal funds — 13 percent of its overall budget — and an additional $800 million in federal grants.
Most of the funding is for federal entitlement programs administered by The City, including food stamps, Calworks and Medicaid. The Department of Public Health receives the most at $800 million, followed by the Human Services Agency with $286 million and homeless services at $36 million.
This is also a city that does not believe in law enforcement—prefers criminals on the streets and more victims, due to city policy. President Trump is going to stop that by using the section of all government agreements that the government entity has to be in compliance with all laws. San Fran may need that income tax to make up for the loss of Federal funds.
With reliance on federal funding, SF budget hangs in the balance
By Joshua Sabatini, SF Examiner, 3/24/17
Threats but few actions. Questions but few answers.
San Francisco remains in suspense over the impacts of President Donald Trump’s “skinny budget” proposal released last week, his threats to withhold federal funding for cities with sanctuary policies for undocumented immigrants and the pending vote by Congress on the repeal and replacement of the Affordable Care Act.
The confluence of factors is seemingly making San Francisco’s budget process one of the most challenging in recent years. This comes after a period of budget processes made easy by the influx of revenues from a booming local economy since 2011, giving city officials a break from having to make tough cuts to services. There was also the stability of policies with eight years of a Democrat as U.S. president.
But under Trump, San Francisco has no idea what financial hit to expect.
“We likely have significant and severe federal funding cuts coming, but it is entirely unclear about the timing of them, what the ultimate scale will be,” City Controller Ben Rosenfield told the Board of Supervisors Budget and Finance Federal Select Committee on Thursday. “It’s unknowable at this moment.”
San Francisco’s current budget relies on $1.2 billion in federal funds — 13 percent of its overall budget — and an additional $800 million in federal grants.
Most of the funding is for federal entitlement programs administered by The City, including food stamps, Calworks and Medicaid. The Department of Public Health receives the most at $800 million, followed by the Human Services Agency with $286 million and homeless services at $36 million.
“We must be prepared to make fiscal decisions that’s going to keep our city healthy and working,” said Supervisor Malia Cohen, who chairs both the board’s Budget and Finance Committee and the board’s Federal Select Committee. “What’s the most difficult aspect … is in this political climate is quite frankly preparing for the unknown.”
Some of the largest potential cuts will not happen overnight.
The American Health Care Act, the Republican bill to repeal and replace Obamacare, would likely reduce the federal Medicaid funding The City currently receives. A vote on the bill was postponed Thursday by Congress, and the debate resumes today.
Should the bill succeed, The City expects it would lose some portion of the $125 million in expanded Medicaid federal funding under the replacement bill beginning in 2020, giving San Francisco time to respond.
In San Francisco, 133,000 residents gained health coverage under the Affordable Care Act, with 93,000 using the law’s expanded Medicaid coverage, and 40,000 received coverage through Covered California, of which 81 received some subsidy.
Trump’s “skinny budget” eliminates $16.5 million for the Mayor’s Office of Housing Community Development Block Grant Program, which funds construction of affordable housing and other services like tenant eviction defense.
The impact wouldn’t be felt until July 2018, according to Brian Cheu, who oversees the program in the Mayor’s Office of Housing.
“It’s premature for us to figure out what we might do. We have no idea whether it will be $16.4 million or perhaps 5 percent or 3 percent.” Cheu said, noting there were severe cuts proposed before that were later reversed by Congress.
Still, conversations persist over how to offset cuts with other funding.
“We just met with our tenant counseling groups. A number of our eviction defense efforts are funded through this,” Cheu said. “Clearly, if we prevent hundreds of evictions through these funds and we lose that ability, the cost to The City becomes intense because these people now are either homeless or they move out of The City.”
Barbara Smith, executive director of the San Francisco Housing Authority, which oversees public housing that relies on Housing and Urban Development federal funding, said she is “very concerned” about potential cuts. Her agency directly manages 1,400 units.
“We are still struggling with a very low level of funding for each unit of public housing that we are managing,” Smith said. “That really is the challenge that we have to work within the funds we have available to keep up with very old property deferred maintenance. The capital needs were growing at a much faster rate than capital funds from the federal government already. And this kind of cut is going to really greatly impact our ability to keep everything working.”
Offering few details, the “skinny budget” is only a blueprint of Trump’s budget proposal to come. A more detailed budget is expected this May. Then it will take months for Congress to debate it, a process that could last past October.
The budget timing also poses a challenge since the federal fiscal year starts Oct. 1. San Francisco’s fiscal year starts July 1.
Mayor Ed Lee must submit a proposed city budget to the board for review and adoption by June 1.
“Congress won’t have acted by the time that we adopt a budget here locally, which creates interesting planning problems for us to think about,” Rosenfield said. “We have a long road ahead of us here, just in terms of understanding what those risks look like.”
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