Newsom Budget Did Not Count SEIU Agreement

by Paul Hogarth, 2009-06-04

With San Francisco reeling from Mayor Gavin Newsom’s proposed budget cuts, hope is on the way in undoing part of the damage. Members of SEIU Local 1021, the largest union of City employees, have overwhelmingly approved a new contract – and will formally announce this today at a press conference. This will save the City $24.6 million for the 2009-2010 fiscal year, after the union’s members rejected an earlier deal in May. Beyond Chron has also learned that the Mayor’s budget did not include savings from a new SEIU deal, which means the Board of Supervisors can start restoring some of the worst cuts. The deal means no layoffs for SEIU City employees until November 15th, giving voters time to pass revenue measures on the ballot – and the question now is if non-profits facing cuts will get the same protection. It also leaves the Firefighters as the one major union yet to modify its contract, which could save the City another $6.6 million. But the Board has a long way to go before fixing this budget, which has over $100 million in proposed cuts to the Health Department. It’s time to revisit budget cuts to the Ballet, Symphony, Opera, Fire Department, 311 Center and the Mayor’s Office – all of which were proposed by the Supervisors last December.

There was a lot to digest in the Mayor’s proposed budget, and Gavin Newsom’s press conference on Monday was blatantly designed to downplay his cuts. The SRO Collaboratives – who serve the City’s most vulnerable low-income tenants in the Tenderloin, SOMA, Mission and Chinatown districts – were shocked to learn that their entire budget ($750,000) was eliminated, after having gone through a round of mid-year cuts earlier this year. In a weird (almost Orwellian) twist, the Mayor said he didn’t “agree” with all of his proposed cuts – and would therefore “count on” the Board of Supervisors to undo them. When asked how the Board could find money to do that in this fiscal climate, Newsom replied that it would happen through “add-backs.”

With the SEIU agreement coming through, the Board at least will have some funds to work with. In anticipation of the fiscal crisis, Newsom had re-opened all of the City’s union contracts – which asked workers to take pay cuts or unpaid holidays, in order to avoid more layoffs. But Local 1021 was by far the biggest player, and its rank-and-file workers had rejected the first proposal. As the Mayor had to submit a budget by June 1st, the SEIU contract was presumed unchanged – although savings from re-negotiations with IFPTE Local 21, the Police Officers and others were incorporated in the calculation.

According to Controller Ben Rosenfield, the deal with SEIU will result in net cost savings of $24.6 million for the next fiscal year. Rosenfield added that approximately $14 million of that money would be in the General Fund, with the remaining $10 million in the City’s various set-asides. In fiscal year 2010-2011, the result of this agreement will save the City another $14 million. As the Board of Supervisors plans to restore budget cuts, this money will be a start.

As part of the agreement, the City will postpone all planned layoffs of SEIU workers (the Mayor’s budget proposal would axe about 1,600 employees) until November 15th, which creates the possibility that voters pass revenue measures in the November election that will save these workers’ jobs. State law puts San Francisco in a fiscal straitjacket, because all tax increases must be passed by the voters – and in most cases require a two-thirds majority. But with a half-billion dollar deficit, we cannot balance the City budget by cuts alone – it also requires re-negotiating union contracts, and raising revenue.

One question for the Supervisors would be whether to implement similar “postponed layoffs” for non-profits who contract with the City. These groups often provide similar services at a lower cost, and more than ever are facing the chopping block. A successful November campaign to pass revenue measures will require a wide coalition to get the two-thirds vote needed, and may be more palatable if voters understands that it’s not just to save City employees. It’s also wise on policy grounds, as it costs less to keep people employed – rather than to create new jobs for the unemployed.

SEIU’s deal means only one major union of City employees has yet to approve a new contract: the Firefighters. According to Newsom, the union is willing to “give back” $9 million in their contracts – which could save $6.6 million of cuts in this year’s budget. But it’s “contingent,” he said, on what happens at the Board of Supervisors. That’s code for saying the Supervisors better not push “rolling brownouts,” which means temporarily close fire stations when they’re not being used. When the Board included this in their list of budget priorities, the Firefighters stormed City Hall to oppose it.

Demanding pre-conditions like this for re-opening union contracts when the City has a budget crisis is plain irresponsible. Public Health stands to make over $100 million in cuts, but the Firefighters would rather keep stations open when they are not needed? Firefighters are some of the highest paid City workers (especially with overtime), and the Mayor’s budget has no layoffs in the Fire Department. Like the other unions, they should be willing to re-open contracts without preconditions. The Firefighters Union has hired Eric Jaye (Newsom’s political guru), which may explain their confrontational approach.

But even co-operation from the Firefighters won’t stop most of the budget cuts. Which is why the Supervisors have to be willing to go after the Mayor’s pet projects – which under no objective measure can be justified in our fiscal crisis. Last December, when Newsom unilaterally made mid-year budget cuts, then-Board President Aaron Peskin submitted his own list of mid-year cuts that more equitably affected those who could afford it – a $4 million cut to Fire Department staff, downsize the Mayor’s press operation, a few modest cuts to the 311 Center and reduce 50% of the City’s subsidy for the Opera, Ballet and Symphony.

Newsom’s budget proposal doesn’t even come close to considering such cuts. The Fire Department has no layoffs, the Mayor’s Office of Public Policy & Finance (which houses Newsom’s PR flaks) will get a 29% increase, the 311 Center – when it’s not picking the pocket of Muni – only gets a 3% cut, and the Grants for the Arts is getting reduced (but we don’t know how the numbers break down.) Everyone loves the Opera, Ballet and Symphony – and nobody wants to see them go. But as the City faces a fiscal crisis that means drastic cuts in social services, patrons of the Opera and Ballet could afford to pay a little more.

EDITOR’S NOTE: Beyond Chron is published by the Tenderloin Housing Clinic, which runs the Central City SRO Collaborative. That program’s entire budget of $250,000 has been eliminated in the Mayor’s proposal, along with the Mission and Chinatown SRO Collaboratives.