The rubber hits the road tomorrow at City Hall, as the Supervisors vote on their own set of mid-year budget cuts
– while facing a Charter deadline for a June 2nd special election. The City faces a $500 million-plus deficit for the next fiscal year, which cannot be dented through cuts alone. But under state law, local revenue measures require voter approval – making a special election inevitable. Mayor Gavin Newsom claims we need more time to bring stakeholders together, but time is not on our side. Without an increased revenue stream before June 30th, the City will have to cut half its discretionary budget – devastating vital services, and sinking the Mayor’s gubernatorial ambitions. It’s also naïve to assume that business groups who oppose revenue measures now will support them in November. But while it’s apparent that we need a special election, getting two-thirds of the electorate to vote “yes” on tax measures requires a sound political strategy. And when it comes to passing revenue measures, progressives don’t have the best track record.
San Francisco voters routinely pass pro-tenant and pro-labor initiatives, but measures to raise revenue are a totally different story. “Some of us have been trying to tax the rich for years, with precious little success,” wrote activist Marc Norton in a Beyond Chron story
last June. “Campaigns to make the landlords of downtown’s skyscrapers pay for the huge amount of Muni service they get failed in both the 1980s and the 1990s … As long as this discussion happens only episodically, during the inevitable budget crisis, we lose – probably no matter how good our proposals are.”
An effort to raise the real estate transfer tax failed in 2002, as did increasing the sales tax and gross receipts tax in 2004. A parking tax measure got killed in 2006 – although the same electorate approved all other progressive measures on the ballot. It gets even worse when the revenue measures require a two-thirds majority to pass: voters nixed affordable housing bonds in 2002 and 2004, although in the latter case it had virtually no opposition. Even a parcel tax to increase teacher salaries (which virtually everyone supports) barely got the two-thirds it needed to pass last June.
While the voters did approve two tax measures last November, the timing of its passage resulted in a tiny net benefit. With the number of real estate transfers hitting rock bottom in this economic climate, raising the transfer tax will (for now) only give us $2 million.
Which doesn’t absolve the need to pass revenue measures in a June special election – as San Francisco’s fiscal health relies on that happening. Already, the City is grappling with the Mayor’s $118 million mid-year cuts
(which he calls “mid-year solutions”) that will devastate our social safety net
. In the next fiscal year, absent increasing revenue and eliminating budget set-asides in our Charter, we’ll be facing another $500 million in cuts. While the City has a $6 billion budget, only $1.2 billion is discretionary funding – i.e., the only place where we can cut.
At tomorrow’s meeting, the Board will consider its own mid-year cuts to soften the blow of the Mayor’s proposals – in a way that appropriately targets services like the Opera, the Symphony and the Mayor’s press operations that don’t hurt the most vulnerable. But even that move, if successful, would only save $5.3 million (a relative drop in the bucket.) And about one-third of that figure would be to de-fund the Community Justice Center, which Newsom already vetoed
once – so they’ll need eight Supervisors to pass it. Without significant pressure, that’s not likely to happen.
We cannot wait until November 2009, when the Mayor believes we can somehow resolve our differences and build a wider coalition. By then, the cuts will have already started – and it’s doubtful that the same folks who fought the Parking Tax, the Gross Receipts Tax, the Real Estate Transfer Tax or the Payroll Tax will somehow get on board later down the road. As disturbing as it is to go full-speed ahead on proposals that have failed in the past, we have no other choice but to schedule a June special election – and develop a strategy to win. And I can see at least three things going for us this time around:
In the past, progressives would slap revenue measures on the ballot because it was good public policy – while everyone was busy electing candidates to the Board of Supervisors, School Board, College Board and passing other propositions that were deemed necessary. A June special election, however, gives us the chance to run a revenue-based campaign without any distractions. Would the electorate pass revenue measures if they understood the gravity of the matter, with nothing else to vote on?
In the past, progressives would put revenue measures on the ballot without making it a priority – because it was not viewed as indispensable. Activists felt the need to increase funding for Muni or housing, so they’d cobble together a revenue measure to make it happen. For better or for worse, now we are faced with a crisis where the status quo would mean losing
vital services. Sitting on the sidelines no longer means a missed opportunity for more funding; it means you suddenly get laid off.
A Statewide Special Election:
Even if the activists are motivated, however, there is no guarantee the electorate will come out for a June 2009 municipal election. A low turnout could jeopardize passage, unless average voters have some other reason to turn out. Right now, the state is likewise mired in a budget mess – with a Governor who fails to lead, and a Republican minority in the state legislature who would rather see the state fall off a cliff than raise taxes. It’s increasingly likely that the legislature and Governor will call a special election – giving San Francisco the opportunity to piggy-back on it.