Supes Take on MTA Budget; Challenge Budget Process

The Board of Supervisors’ Budget Committee voted last night to reject the MTA budget because it raised fares and cut service – while serving as a private ATM for other City departments. Seven Supervisors can overrule the Muni budget, but it’s never been done before – as the legislative branch attempts to be a “check” on the Newsom Administration. But rather than provoke a showdown with the Mayor, Board President David Chiu gave MTA Chief Nat Ford a week to “sharpen the pencils” – and present a more fair and equitable Muni budget. Earlier that meeting, the Committee passed a resolution by Supervisor John Avalos to set “budget priorities” for the year. It’s a pro-active way of preventing the annual budget charade each summer where the Mayor offers cuts, leaving the Board to scramble for crumbs. While Gavin Newsom sends out multiple press releases a day to promote his meetings in Washington DC and Chicago, the Supervisors work at City Hall to find a fair response to our fiscal crisis. And right now, it feels like David Chiu might as well be the Mayor.

“The Mayor proposes and the Board disposes,” said Aaron Peskin back in June 2007 – as he reminded colleagues that the two branches are co-equal. “Checks and balances” is how I always thought our government should run. But in my three years at Beyond Chron, I’ve come to learn that does not apply in San Francisco. The Supervisors can vote 8-3 (a veto-proof majority) to appropriate funds, but the Mayor won’t spend it. The Mayor has eleven months to propose a budget, but the Board has just one month to react to any cuts. And the Mayor can make unilateral mid-year cuts at any other time, but the Board cannot stop them from happening.

Chiu Takes Charge on MTA Budget

Which is why yesterday’s vote on the Muni budget was so important. After the MTA Commissioners (all of whom are appointed by the Mayor) passed an emergency budget to address Muni’s $129 million deficit, Board President David Chiu said he wouldn’t support it. The Supervisors can’t tinker with the MTA Budget, but a minimum of seven can reject it as a whole – sending Muni back to the drawing board. The Board has never exercised that power, which would throw it into uncharted waters. At the time, it was still a question whether Chiu could muster up seven votes.

Chiu walked into yesterday’s Budget Committee with his motion rejecting the Muni budget. Six colleagues had already co-sponsored it, which set the tone for the meeting. “This proposed budget does not live up to the MTA’s mission” said Chiu. “It is cutting services, raising fares and hemorrhaging funds to other City departments – in a triple whammy.” The MTA had reduced the infamous “work orders” by $14 million, but it still pays $66 million to agencies like Police and the 311 Center. And with plans to eliminate bus lines without enhancing service elsewhere, MTA Chief Nat Ford was facing a tough audience.

In 2007, the MTA paid $46 million in work orders to City Departments. By 2009, that number had jumped over $30 million – more than what voters gave Muni in 2007 with Proposition A, despite a promise that money would go to improving service. Ford said they were paying for “services the MTA needs,” but Chiu grilled him on each item.

For 311, the MTA was billed $7 million – four million of which was for Muni-related phone calls. “I’d rather the money be used to provide Muni for free,” said Chiu, “which is what Newsom proposed in 2007.” For the Police, the MTA was billed for patrolling City parking garages – which Ford admitted was just car patrols to monitor for graffiti. “Do private parking garages – such as Macy’s – have to pay the Police every time they drive by,” asked Chiu. “It doesn’t strike me as a good way for Muni to spend this money.”

The MTA has lost $2 million in revenue in parking citations for street cleaning, because Public Works is cleaning fewer streets due to budget cuts. “We are cleaning our streets less,” asked Chiu, “and taking a larger hit from decreased revenue as a result?” Muni spends $8 million to hire fare inspectors – who ticket fare evaders, but which has only netted $350,000 in fines. “We’re spending $8 million to get $350,000,” he wondered. As for fixing the budget crisis, Chiu asked why Muni is raising $43 million from bus riders in fare hikes – while only $10 million from drivers in parking rate increases.

What Happens if MTA Budget Goes Down?

It became clear that the Muni budget was dead – especially when Supervisor Bevan Dufty (who had not co-sponsored Chiu’s motion) said he would be an eighth vote to reject it. But the Board has never overruled an MTA budget before, and the question was what would happen afterwards. “There is no requirement in the City Charter,” said City Controller Ben Rosenfield, “that the MTA come back with a new Budget.” The Mayor’s Budget Director, Nani Coloretti, said the City would be obligated to spend $30 million of the General Fund to keep the buses running, further aggravating a dire budget situation.

Here is where standing up for the right thing could place the Supervisors in a game of “chicken” with the Mayor’s Office. Gavin Newsom’s political adviser – Eric Jaye – has pushed a combative approach with the Board for years, which he’s used as a foil to promote his client’s gubernatorial ambitions. Would the Mayor now accuse the Supervisors of creating a $30 million “hole” in the budget by rejecting the MTA? Action was needed to prevent it.

Rather than promote a showdown with Newsom, David Chiu took MTA chief Nat Ford aside during the public comment period – and asked him to “sharpen the pencils,” take another crack at the Muni budget and come back in a week. The Budget Committee would still recommend a “no” vote on the MTA budget in its current form to the full Board, but they would “duplicate the file” and consider an amended MTA budget next week. “By leaving this legislation here,” explained Chiu, “we can consider changes.”

The Supervisors all expressed a desire to work with MTA to propose a budget that would be acceptable. Expect Chiu to work closely with Nat Ford and other Muni officials in the upcoming week to (a) more seriously address the “work order” fiasco, (b) avoid drastic fare hikes and (c) spare bad service cuts. Other amendments, such as improving the Lifeline Fast Pass for low-income riders must be on the table. If we didn’t have an absentee Mayor, Gavin Newsom would fill this role. But now, it looks like David Chiu will be stepping up.

Changing the City Budget Schedule

Muni got the lion’s share of attention at yesterday’s Budget Committee meeting, but the Supervisors also passed a resolution to set budget priorities for the upcoming year. While it’s a non-binding measure that has no legal weight, the proposal aims at repairing an inherent power dynamic between the Mayor and the legislative branch that happens every year during budget season.

The Mayor submits a budget proposal, and the Board only has about a month to respond. Often, for strategic reasons, the Mayor proposes devastating cuts in health and human services – which keeps the Supervisors busy hearing testimony from everyone affected, and scrambling to save essential programs. This puts the Board in an unfair situation, where they are forced to be reactive – rather than pro-active. And there is no time to respond effectively.

This year, as the City faces a half-billion dollar deficit, we can expect what cuts the Mayor will propose. And this year, because the fiscal situation is so dire, the Board will be stuck accepting many of these cuts – because there are no alternatives. It is crucial for Supervisors to have input now – and propose which cuts go into the Mayor’s budget, in order to shape the discussion later. As Supervisor Chris Daly explained yesterday, “it’s a lot easier to say ‘what we want to save’ rather than ‘what we’re wiling to cut to save.’”

In June 2007, Daly made the political mistake of proposing cuts to the Mayor’s budget after Newsom submitted it – rather than before. It prompted a protest on the steps of City Hall, and got him kicked off the Budget Committee. Looking back, a lot of his proposals were reasonable – and could not have been demonized if part of some pre-budget discussions. And that’s what the “resolution on budget priorities” was about.

“The Mayor submits the budget,” said Daly. “This is about leveling the playing field.”