Daniel Lurie’s S.F. budget plan is already meeting resistance

The pushback to Mayor Daniel Lurie‘s budget has already begun – more than six weeks before he is expected to announce his new plan to eliminate San Francisco’s huge deficit.

City workers on Wednesday afternoon will protest the 127 layoff notices recently issued by the Lurie administration and urge the mayor not to make even deeper cuts in his upcoming budget proposal. More layoffs could be in store, because Lurie’s budget director previously told city departments to plan for a total of 500 job cuts to reduce salary and benefits spending by $100 million.

Additionally, advocates for seniors and people with disabilities are poised to speak at a public hearing Wednesday about potential funding reductions that would hit the communities they represent. Lurie’s administration has also drawn scrutiny over a range of other potential cuts, including to environmental and legal aid programs.

While Lurie doesn’t have to release his next city spending blueprint until June 1, the Wednesday demonstrations are an early sign of how contentious the budget process is becoming. Lurie is trying to not only close a two-year deficit now projected at $643 million, but also get the city on firmer financial footing in the long term after years of recurring shortfalls. His plan to do so is running into strong resistance from labor groups who represent much of City Hall’s workforce of more than 30,000 employees.

“I question his strategic thinking around this, given that a lot of the layoffs he is targeting are … necessary to the success of the city,” said Theresa Rutherford, president of SEIU Local 1021, the city’s largest-public sector union. “You can’t cut the services and expect to deliver good outcomes. It doesn’t work. So to me, it’s cutting your nose to spite your face.”

The layoffs have put the mayor on a collision course with Rutherford and other labor leaders who argue the job cuts unfairly harm front-line workers and programs that serve vulnerable residents. The unions are backing a June ballot measure, Proposition D, that they say would help the city’s funding woes by raising taxes on companies with highly paid CEOs. But Lurie opposes Prop D and unsuccessfully sought to keep it off the ballot, arguing the tax would send the wrong message to businesses and comes just two years after voters passed a sweeping tax reform measure. He also opposes a rival business tax measure backed by the Chamber of Commerce.

Lurie spoke about the layoffs Tuesday during his monthly appearance before the Board of Supervisors, where he said he felt compelled to “take action now or be forced to do twice as much in the coming years.”

“This is a hard budget, and I’m not going to pretend otherwise,” Lurie said.

San Francisco’s government expenses, including labor costs, have for years outpaced growth in local tax revenue, which has been hampered by the city’s lackluster economic recovery from the pandemic. The city budget took another hit due to the passage last year of President Donald Trump’s sweeping tax and domestic policy bill that slashed funding for food stamps and Medicaid.

Lurie last year pursued a far smaller reduction in the City Hall workforce. He sought to eliminate more than 100 filled jobs in his last budget proposal, and the Board of Supervisors ultimately shrank the job cuts to about 40 people in a deal negotiated with Lurie. But the mayor cautioned in June that he intended to make even tougher fiscal choices this year, and he appears to be fulfilling that promise.

He told supervisors Tuesday that even though San Francisco had narrowed its recurring shortfalls by $300 million in last year’s budget, the savings were offset by the cuts imposed in Trump’s tax and spending bill. San Francisco’s deficit is still projected to reach $1 billion in the coming years if the city takes no action.

“The city has to stop spending more money than we have,” Lurie told supervisors. “Temporary fixes may buy time, but tackling the structural deficit is the best thing that we can do to set up our city for a broad based, durable recovery.”

Labor unions contend that Prop D, despite Lurie’s opposition, can help.

The measure would raise and alter San Francisco’s “overpaid executive” tax on large companies with highly paid top executives.

Critics contend that Prop D will drive more large businesses out of the city, but the unions backing the measure say it will provide desperately needed local tax revenue to the tune of about $300 million annually. City Hall can use that money to avoid further budget cuts to core government services, Prop D supporters say.

“We know that there is a real issue,” said Rutherford, the SEIU local president. “But to cut staff  … is adding to the problem, not solving it – and not making San Francisco better.”

While SEIU and IFPTE Local 21, another union representing city workers, prepared to rally Wednesday at San Francisco General Hospital, other activists were set to embark on their own demonstration against potential budget cuts at City Hall.

Advocates for disabled people and seniors are alarmed about a potential $3 million funding reduction at the Department of Disability and Aging Services, which the department outlined in its budget submission to the mayor’s office. Lurie has not yet decided whether to include that cut in his final budget proposal.

Community advocates were planning to deliver messages Wednesday to Lurie’s office outlining how the cuts would harm those communities. They also intended to speak at an afternoon hearing on the matter that was organized by Supervisor Danny Sauter. Once Lurie proposes his budget, supervisors will spend much of June vetting his spending proposal – and potentially making some changes.

“It’s not a set budget yet – it’s still in the mayor’s hands,” Erik Greenfrost, executive director of Senior Disability Action, said in an interview. “This doesn’t have to be something that’s actually put in stone … These proposed cuts are cruel. They’re short sighted. And they’re inefficient.”

Greenfrost stressed that the potential cuts would hurt nonprofits that are more flexible than City Hall and can “connect with communities in ways that a big, sprawling bureaucracy cannot.”

The disability and aging services department said in a statement that “the budget process remains fluid” but also emphasized that the city “is facing challenging times” financially that require “difficult decisions on budget reductions across City departments.”

Sauter, for his part, said one reason he called the hearing is that seniors are a fast-growing population that are well represented in his district, which includes North Beach and Chinatown.

“I’m realistic that there will be cuts,” Sauter said.  “But we want them to be as thoughtful as possible.”

This article originally published at Daniel Lurie’s S.F. budget plan is already meeting resistance – and it’s not even out yet.