New York Governor Andrew Cuomo often refers to fighting the coronavirus pandemic as a war. To go with that sentiment, New York Mayor Bill de Blasio announced his city would have to enact a “wartime” budget and cut $2 billion in municipal services over the next year.
In a war like coronavirus, spending must first soar. We spend what it takes to save lives, even when we know such spending is unsustainable — because it’s the right thing to do.
Then the deficits arrive and spending must contract. New York is already preparing for the inevitable: aggressive cuts in non-essential services. San Francisco must do the same.
Before the coronavirus pandemic, San Francisco was looking at a $420 million budget deficit over two years. We were spending way beyond our means even in boom times. Now that we’re in crisis mode, early estimates projected the deficits could reach $1.7 billion. Within a month, that number was revised to $2.5 billion. Don’t be surprised if it goes even higher.
This is a big concern because cities can’t just borrow their way out of a deficit the way the federal government does. San Francisco needs to enact a pandemic budget.
Ben Rosenfield, San Francisco’s budget controller, compiled a sobering post-coronavirus outlook. He predicts a recession in our local economy.
Rosenfield said there isn’t enough data yet to determine if we’re headed for a limited or extended impact scenario. But in the best case we can expect “severe” losses through the summer. Otherwise, we could see losses the rest of the year with an extended recovery through 2021.
“I’ve stopped defining worst-case scenarios because they keep getting worse every week,” Rosenfield told the Chronicle.
Ted Egan, San Francisco’s chief economist, told KQED the $750 million that City Hall currently has in its rainy day and general reserves will soften the budget impact. But it won’t go far enough to cover multi-year revenue losses.
City Hall helped flatten the curve of the virus locally as one of the first municipalities in the nation to order residents to shelter in place — a bold step that saved lives. The key was residents partnering with City Hall to adhere to the order.
We must continue working together. That means taking bold action to flatten the devastating economic curve headed our way. Everyone will have to pitch in.
Just as New York has started to put itself on a “wartime” budget, San Francisco must act quickly to rework our budget to reflect the reality of a pandemic-fueled economic disaster. Each day we delay, we compound the fiscal pain that will be felt.
“It’s going to be recession time in City Hall,” Egan told KQED, “and we’re going to have to be looking at savings.”
Ideally, City Hall should have dealt with its out-of-control $13 billion budget long before trouble arrived. But we let the budget double the past decade when we could have audited programs and measured for results.
We could have developed a process for prioritizing services that have long term benefits and clearly defined goals. Then we would know with more certainty which programs are most impactful. This is good information to have when an economic disaster comes along and we have to make decisive budget decisions.
Unfortunately, we didn’t do this sensible work when things were good. And the longer we wait, we will be forced to make cuts without the luxury of time to give each budget component thoughtful attention.
There are no easy shortcuts to reduce the budget. You can’t just eliminate an entire department to save a billion dollars. Optimizing a budget the size of San Francisco’s requires detail-oriented analysis of line items and existing systems. It’s long, grinding, hard work that requires shared sacrifice.
Every department and every city employee — and we have more than 30,000 — will have to be part of the solution.
Think of it as an exercise in saving dimes. Today, City Hall must find its dimes to shave from the budget.
Those dimes we save will add up to dollars, which will become millions of dollars that can be better allocated in our budget so we can continue serving residents. It is a difficult, but not impossible, task to find these savings in a $13 billion budget.
We are facing a very real war on our economy and vulnerable populations. The statistics, as grim as they are, don’t yet fully reveal the extent of the losses we will suffer. Our reserves will not be enough to get us through.
Victory depends on City Hall making some tough decisions and sacrifices.
Joel Engardio is a candidate for supervisor on San Francisco’s westside in District 7. Learn more about his views on local issues at engardio.com/issues