By Luke Thomas
May 21, 2009
While the City and County of San Francisco faces an unprecedented $438 million budget deficit in the next fiscal year that begins July 1, a new “shared sacrifice” budget proposal is being considered by the City’s legislature, a proposal that would save all city jobs and services from the guillotine.
Mayor Gavin Newsom, who is required to submit a balanced budget by June 1, is relying on individual unions and department heads to provide Newsom with the necessary concessions to balance the budget. So far, his effort in seeking union wage concessions has been largely unsuccessful. Though some unions are making offers at closing the budget gap, the offers are steeped in protection and self-interest, and do little to prevent hundreds of expected layoffs.
The new proposal takes a “community” approach to solving the City’s budget crisis, sharing the deficit pain among all city employees through an across-the-board salary cut, mandatory workday furloughs – or a combination of both – to balance the budget.
Unless the unions agree to a shared sacrifice, hundreds of city employees face the prospect of indeterminate months of unemployment, foreclosure, or worse – destitution and homelessness in a recession that has not yet seen its bottom.
Of the City’s $6.5 billion annual budget, $3.3 billion (49.4 percent) is dedicated to employee salaries and fringe benefits. If every employee agreed to a wage cut, or mandatory workday furloughs, their jobs would be saved, and important city services, including Muni, would be preserved whole.
Initial estimates suggest an across the board salary cut between 13 and 17 percent would be enough to balance next year’s budget, though revenue measures being proposed for the November ballot could lower these estimates by as much as 5 percent or more.
FCJ spoke to several supervisors on all sides of the political aisle about this proposal yesterday. Though there appears to be some disagreement on how the salary cuts could be made equitable, there is consensus that individual self-interest must be replaced by community sacrifice if we are to avoid severe hardships for hundreds of city employees who will otherwise be axed.
Here’s what they had to say:
District 5 Supervisor Ross Mirkarimi:
“It’s a wise idea. It asserts a level of compassion and collaboration that I don’t think exists now. But in desperate times, more than ever, this would be an excellent time for leadership, particularly in Room 200, the mayor, to help amass this level of consciousness and what it means to alleviate our significant problem.”
“This is the same theory that we’re applying to the set-aside reform, and that’s not going to go anywhere because, in the set-aside issue, entitled funding is protected funding and, so, if people feel that funding is threatened, they then deflect back to their self-interest.”
Supervisor Ross Mirkarimi
District 11 Supervisor John Avalos:
“People have their own reasons for doing things or not doing things – and personal self-interest is often how we make all make our decisions on things.”
Avalos said he likes the idea of employees who are on the high end of the salary scale to “give back more” than those employees on the lower end of the salary scale.
“If you’re making over $150,000 a year, that’s a great salary to have, even in San Francisco.”
Avalos said the only way such a proposal could be forced upon City workers is if the Mayor declared a state of emergency, but Newsom spokesperson Nathan Ballard told FCJ yesterday that Newsom is not planning, at this point, to use this chartered provision.
Supervisor John Avalos
District 6 Supervisor Chris Daly:
“You’d need every bargaining unit to agree, which is harder to do than to actually pass a revenue measure.”
“I have not given up on revenue. I don’t think we should give up on a revenue measure, and we should hold the mayor’s feet to the fire and demand that he show us leadership.”
Question: Are we a community that’s willing to share the pain, or are we a community of individuals that’s just out for ourselves?
“We’re out for ourselves,” Daly lamented.
Supervisor Chris Daly
District 9 Supervisor David Campos:
“A lot of people would rather see their salary cut to avoid a co-worker being laid off.”
“I think that you have to provide some assurances that the City will do its very best to avoid layoffs and to minimize the impact.”
“The main concern that I would have is that it’s not done across the board where everybody is treated the same, because there are some people in bargaining units (unions) that are overpaid. I think that you have to have some equity in how that’s allocated.”
“But I think the idea, the notion that we maintain the level of service that we have, and that we protect peoples’ jobs, is that we do an equitable reduction in salaries in recognition that times are tough – and we can go back to the existing salaries when the economy gets better. I think that’s a concept that makes sense. I certainly would be open to that.”
“There is a lot of anxiety that comes with this process and people are really scared, and rightly so, especially people who have families.”
“I think a lot of people would be receptive to it. I don’t know how workable it is. At this point you have to think outside the box and be creative.”
“There may be some people that won’t want to do that, but I do think that, as a city, it makes sense to, as general matter, to pursue that policy.”
Supervisor David Campos
District 8 Supervisor Bevan Dufty:
“This is the most humanistic approach that you could take, but it obviously cuts across lots of laws and charter provisions and so forth, but it doesn’t mean it’s impossible.”
“It’s the mayor that has to negotiate certain things. It’s clear that Mayor Brown would have taken the bull by the horns, so to speak, and sat people down and at the table and personally cut an agreement.”
“I think that it’s been challenging. Certainly a relationship is a two way street and I think the mayor and SEIU have not had a good relationship for some time, that it’s been my intent to have a good relationship with SEIU and I have worked at it, but I don’t have the responsibility that the mayor does in terms of negotiating.”
“We’re at a point where the enormity of the problem is such that I think that we just have to not be distracted by the finger pointing and really just try and buckle down and figure things out, and that’s a lot easier said than done.”
Dufty said some of the labor organizations prefer the concept of mandatory workday furloughs “because it doesn’t affect their bottom line from a pension standpoint, that it protects them in the long term.”
Dufty said layoffs would exacerbate the “stalling” of San Francisco’s local economy.
Supervisor Bevan Dufty
District 7 Supervisor Sean Elsbernd:
“The bottom line is this can’t be done by legislative or executive fiat. This can only be done in conjunction with our public employees, and I guess the message has not been clear enough what is on the other side.”
Elsbernd said an equitable across the board salary cut would require buy-in from the unions. He said he didn’t think there’s enough time left in this budget cycle to make the changes, but encouraged the proposal concept to be applied to mid-year cuts.
“We’re not done when we pass this budget. We are going to be in this mess for a long time to come, so let’s be forward thinking. We can’t do anything for June 1, but we can probably do something for the September-October mid-year cuts.”
Supervisor Sean Elsbernd
And the final sets of quotes are from San Francisco Labor Council Executive Director Tim Paulson, who has the unenviable task of mediating consensus between all the unions.
SF Labor Council Executive Director Tim Paulson:
“The rank and file are going to make the choices that they need to make for their own particular unions.”
“The City hasn’t really been asking for that much at the bargaining table, so there’s no reason for them to go that far.”
“Whether or not it’s SEIU Local 1021 or the firefighters, or the electricians, they’re doing their math to figure out what’s the best way to share the pain based on what the City is asking.”
Paulson said the SF Labor Council has undertaken some polling that shows support for certain revenue measures.
“We’ve done some polling, as has the business community and the mayor’s office – there are taxes that people would swallow because they care about our City.”
“It was all going to be based on one big package and when SEIU, in the confusion and the craziness voted down the contract, everything went out the window.”
“It’s all up in limbo now because the biggest union (SEIU Local 1021) voted the offer down.”
When asked if the union rank and file members fully grasp the consequences of layoffs in this recession, Paulson said: “I don’t think all of them have realized the consequences, but ulitmately they will make the right decision.”
“The City could be in the best place economically and politically if everybody just worked together.”
“It’s difficult. There’s a very short time line to bargain – and the rank and file, I hope, will ultimately make the right choices to save jobs and services.”
Tim Paulson
Luke Thomas
Luke Thomas is a former software developer and computer consultant who proudly hails from London, England. In 2001, Thomas took a yearlong sabbatical to travel and develop a photographic portfolio. Upon his return to the US, Thomas studied photojournalism to pursue a career in journalism. In 2004, Thomas worked for several neighborhood newspapers in San Francisco before accepting a partnership agreement with the SanFranciscoSentinel.com, a news website formerly covering local, state and national politics. In September 2006, Thomas launched FogCityJournal.com. The BBC, CNN, ABC, NBC, CBS, Fox News, New York Times, Der Spiegel, San Francisco Chronicle, San Francisco Magazine, 7x7, San Francisco Examiner, San Francisco Bay Guardian and the San Francisco Weekly, among other publications and news outlets, have published his work. Thomas is a member of the Freelance Unit of the Pacific Media Workers Guild, TNG-CWA Local 39521 and is a member of the Society of Professional Journalists.
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May 22, 2009 at 11:27 am
This article is flawed, as are the Supervisors who think that we should not reduce headcount of employees of the City and County of San Francisco. We have had too many people on the payroll for years. I do agree that we should also look for pay cuts, and especially pension and H&W reductions, as well as additional revenue measures, like increases in golf fees, MUNI fees, parking and permit fees. And have the assessor fight to not reduce appraised values of properties.
May 22, 2009 at 9:22 am
David Waggoner,
You say: “How about an across the board salary cut of any city employee who is paid more than $100K a year?”
I would say any employee who is paid more than $50K a year, which is a huge salary from my point of view.
You say: “We need leadership.”
You’re not going to find it in SF. The politicians here are mostly tunnel-vision ideologues, career-pushing bench warmers, or crooks.
The best people in SF flee politics. That’s why the meetings of the board of supes are often like Monty Python skits.
We’ll have to do the best we can with the lunkheads who now call the shots at City Hall. Don’t have high hopes.
May 21, 2009 at 11:54 pm
“We are all going to get hurt.”
“Hurt” is a relative term. To be sure, losing one’s home is hurt. Being hungry is hurt. Sleeping outside and looking through the garbage for food is hurt. Foregoing a 5 million dollar birthday party may or may not be hurt. Foregoing a larger yacht or renovations on the second home may or may not be hurt. A 25% cut of a 150K salary might hurt, if one can no longer afford routine visits to Bloomingdales.
How about the “hurt” be inflicted on those most able to deal with it? How about an across the board salary cut of any city employee who is paid more than $100K a year? How about we take absolutely no measures that would further hurt residents for whom a MUNI fare increase will amount to another monthly crisis?
We need leadership. Leadership that’s not afraid to say we are the keepers of our sisters and brothers.
May 21, 2009 at 3:49 pm
“I think it’s incredibly short-sighted to say we can cut ourselves out of this problem.”
– Paul Hogarth
Right you are, Paul.
Many people still don’t seem to realize how deep the present crisis is. We are in the midst of a global economic meltdown affecting the major countries of every continent.
The situation will get worse before it gets better. And making it better won’t be easy.
The problem is that the global economy since the end of WWII has been basically a big Ponzi scheme. And now it is finally imploding, as all Ponzi schemes eventually do.
We are all going to get hurt. And we will all have to start thinking outside the box in order to set things right.
May 21, 2009 at 3:04 pm
Jerry, if we raise taxes in such a way that those who can afford to pay more do so, that’s a good thing. I think it’s incredibly short-sighted to say we can cut ourselves out of this problem. Because the truth is, we can’t …
May 21, 2009 at 1:46 pm
I will be damned before I vote to increase more taxes on myself. I’m barely getting by as it is. The only way to balance the budget is to reduce government.
Eliminate the DPW. When people get tired of dirty streets maybe they will pick up a broom with their neighbors and clean up the mess.
Let the DPH generate revenues buy having their own medical cannabis dispensaries.
Make the PUC own and operate their own utilities.
Almost all departments can be their own revenue generators.
When you do that then come back and ask me if I want to eat less or struggle to pay my already over inflated rent so that you can maintain your government job. I could care less if you have a job, because mine is barely enough.
May 21, 2009 at 1:45 pm
It’s interesting to compare the budget woes San Francisco has with the budget woes of California.
1. In Sacramento, Democrats say that it’s a stubborn minority of Republicans that simply will not budge. Since we have a 2/3 majority voting requirement on tax-related issues, we are all stuck with a bad budget and a huge debt.
Now in San Francisco, Democrats have been in power in the Board of Supervisor and in Room 200 for more than three decades. The last Republican Supervisor we had, I think, was Ann-Marie Conroy and our last Republican mayor was George Christopher back in the late 1950s and early 1960s. So, we can’t blame a stubborn minority of Republicans for San Francisco’s troubles, can we?
2. Now some will say it’s all Proposition 13’s fault, that its Draconian restrictions on property taxes skewers the relationship and balance among city, country and state funding. But the exact same people who hate Proposition 13 love rent control.
Am I missing something?
3. Tuesday’s election sent the message that politicians simply can’t “tax their way out of any and all trouble.†And coming up with more bond initiatives won’t do either. The real challenge is coming up with new ideas for generating revenue and creating jobs. The Board of Supervisors needs to stop reading the San Francisco Bay Guardian and start reading the San Francisco Business Times!
May 21, 2009 at 1:38 pm
Why does no one speak about how those who have been asked to sacrifice for decades are being asked to sacrifice more now?
The growing recession and the entailing budget crises are all due to unpunished pirates who absconded with 8? 11? 12? 13? TRILLION dollars thanks to Republicans and Democrats who labor on their behalf in Washington.
Adding insult to injury is the war against labor whose Unions have are rendered impotent and corrupt.
Barack Obama is the perfect foil to our anger and frustration. “The buck stops not with me, but with you!” he seems to say.
http://tinyurl.com/ot2a9e
And by and large, our local politicians seem to agree.
May 21, 2009 at 1:15 pm
This is an outstanding article. It proposes a sensible and fair solution, and reports detailed feedback from many stakeholders.
However, a solution of this nature will not be forthcoming unless the mayor, the board of supes, and the union leadership all have the wisdom and determination to work on its behalf.
That’s not likely to happen. Gavin Newsom is an absentee mayor. The board of supes is notoriously impractical and fractious. The union leadership is short-sighted and greedy.
Nonetheless, it never hurts to put forth a good idea and raise a noble standard. Sometimes doing so can bring out the best in enough people to make things happen.