board of supervisors

City mulls future of federal budget cuts

by Thomas K. Pendergast

San Francisco is mulling over the possibilities and ramifications

of U.S. President Donald Trump chopping about 13 percent of the city’s proposed $9.6

billion budget if he carries through on this threat to cut off “sanctuary” cities from

federal funds.

“Imagine your personal budgets. If you had to cut 13 percent

pretty abruptly, it would probably hurt,” said Chelsea Boilard, a

legislative aide to District 1 Supervisor Sandra Lee Fewer, at

a recent public meeting at the Richmond Branch Library.

“You’d have to make serious considerations about what you’re

not spending money on.” Boilard noted that San Francisco is now suing the federal

government in court on the grounds that Trump’s executive

order is unconstitutional, but the case is still in the courts. (A San

Francisco judge initially ruled that the funds could not be withheld,

but that decision could be appealed.)

“There is a lot of uncertainty in terms of how San Francisco is

doing our planning,” Bollard added. “Services that are funded

through community development block grants, through HUD (U.S.

Department of Housing and Urban Development) for example, if there’s a threat to those,

and the federal budget isn’t finalized until October, San Francisco has to do some

planning about what we think we might have to think about for funding if the federal

government doesn’t. It adds to the level of uncertainty that I think makes the planning

for San Francisco a little bit tricky….

“If there are cuts in any of these areas, San Francisco could be faced with a choice: do we

want to backfill and provide funding for these services that were previously funded by

the federal government, and, in the case that we want to do that, will we make a cut


She noted the fact that, so far, the health care Affordable Care Act (ACA, or Obamacare)

has survived the Trump administration’s recent attempt to torpedo it.

“That failed, which is just hopeful to have,” she said. “In San Francisco, we have Healthy

San Francisco, which is actually even better. It’s just a stronger program than the ACA

but it provides a lot of funding and if we had to get rid of the ACA, if it went away, then

that would impact a lot of our other services.”

Boilard also noted that San Francisco’s budget process wraps up in August, while

the federal government’s budget cycle ends in October, creating a couple of

months of uncertainty. San Francisco Supervisor Sandra Lee Fewer met with SF Mayor

Ed Lee about the budget, she said, saying the mayor has already set aside

about $30 million.

“He said that he’s planning to reserve $30 million just in case of federal and state cuts,”

said Fewer. “There is another reserve also but this is just for state and federal cuts. He

thinks $30 million will cover it for the first year.”

“I think it is important to know who the decision makers are for any budget process

because what they care about guides their priorities, and those priorities are where they

put their money,” said Boilard.

The subject of “set-asides,” as in money set aside by law outside of the Board of

Supervisors’ discretion, also came up at the meeting. Fewer mentioned that some

set-asides have a “sunset clause,” wherein the law goes away if it is not renewed after

a certain number of years, but others do not, like set-asides for police and fire, which are

on paper forever.

“We believe that every set-aside should have a ‘sunset’ because it allows you then to

evaluate. Is it being spent right? Should we approve this again?” Fewer said. “When you

have a set-aside that is continuing every year without accountability by

the voters, then we just think that it’s probably not good government. It’s better that

people can justify that set-aside because they are guaranteed that

money every year.”

Boilard recalled that a few years ago, the budget situation overall looked much worse.

“In December, the mayor released budget instructions,” she said. “I was doing some of

this work during the recession, really bad budget years, and his budget instructions said

that departments had to cut 25 percent of their budgets. This year his directions said cut

1.5 percent of your budget, which says something about the city economy and where we

are now.” Fewer also addressed an idea that has been floating around recently, which is,

perhaps now is the time that San Francisco formed its own bank.

“If we had our own bank, we could have control over our own money,” Fewer said.

“Meaning that we could invest in things that we want to invest in, that reflect San

Francisco values, versus the values of the Bank of America, for example. And also, we

could then fund affordable housing, we could give ourselves loans, we could get interest

when we get back the loans, because right now we do borrow money from certain

entities and then we have to pay them interest.”

And then there are other potential economic opportunities coming up on the horizon for

a city bank.

“There is a growing cannabis business that’s happening, and that is going to be a multi-

billion dollar business, but there is nowhere for them to park their money,” Fewer said.

“So, we think this could be great for us. I mean; it’s revenue. If the feds don’t want it, then

we’ll take it.

“We have asked for the budget analyst to give us an updated report … on what’s

happening with other cities and states and counties, that have tried to start their own

public banks. I think it’s a very viable option for San Francisco,” Fewer said.

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