How mayor, supervisors compromised on windfall
When San Francisco was handed an extra $185 million late last year, Mayor London Breed did what mayors do: She spelled out the city’s spending priorities.
But allocating the windfall ended up being a messy back-and-forth between the mayor and Board of Supervisors. During the process, she found herself with no allies on the board — a circumstance that could signal a rocky legislative path ahead for Breed.
On the surface, Breed got much of what she wanted in the spending plan, which passed the board unanimously Tuesday: 280 shelter beds, 86 behavioral health beds and upgrades to public housing facilities. But that came about because the supervisors watered down one part of her proposal and pulled a large chunk of money from the city’s reserve fund — something the mayor was adamantly against.
“The board’s decision to take funds out of the
city’s rainy-day reserve is irresponsible,” Breed said in a statement. “Our rainy-day reserves should only be used to address the impacts of economic downturns or unforeseen economic emergencies.”
Breed isn’t entirely pleased with the final result, and her spokesman said she is waiting to see what hits her desk before she commits to signing it. But in reality, she has no choice: All 11 supervisors co-sponsored the plan, so they have a vetoproof majority.
“It was the first test on how the board will be working with the mayor,” said Supervisor Sandra Lee Fewer, who chairs the Budget and Finance Committee. “And, quite frankly, I think it worked out pretty well. But I think there are some learning curves that we both have.”
Still, some inside City Hall acknowledged that the process could have gone more smoothly, and may be a sign of more disagreements to come between the mayor and the board, particularly during budget discussions.
There were emotionally charged phone calls between at least one supervisor and the mayor’s staff, a public jab at the board’s spending plan from the mayor in her State of the City address — “Every dollar we take away from what I’ve proposed is one fewer bed. One lost home. One more person on the street.” — and last-minute attempts from the mayor’s staff to persuade the board not to dip into the rainy-day reserves.
Meanwhile, the supervisors also struggled to coalesce around a single plan until the last minute. The final compromise was cobbled together during a marathon Budget and Finance Committee meeting this month. With a 3½-hour public comment period dragging on in the background, the supervisors and their staff hashed out the details in whispers and tense exchanges. At one point, a supervisor walked into the back room and was heard shouting to a colleague.
The windfall money came from excess revenue in a county education fund, and the total amount is $415 million. But the City Charter requires that more than half the money go to budget reserves, the Municipal Transportation Agency, public libraries, tree maintenance, public schools, and child care and youth services.
That left the mayor and the supervisors with $185 million to spend.
From the beginning, the mayor was adamant that she wanted all the money to go toward meeting the goals of Proposition C, a November ballot measure that she opposed, which would raise $300 million in taxes from the city’s largest businesses to fund homeless services. It is facing legal challenges that prevent the money from being spent until they’re resolved.
But when Breed floated her $181 million spending plan to the board — $90.5 million to the Department of Homelessness and Supportive Housing and the Department of Public Health and $90.5 million to the Mayor’s Office of Housing and Community Development — she found no support from any supervisors.
The board members had their own priorities.
Aaron Peskin, Hillary Ronen, Rafael Mandelman, Sandra Lee Fewer and Gordon Mar wanted to divide the money among homelessness, housing, energy independence and child care programs. A subsequent proposal included money for teacher pay raises.
“One thing that is clear about this board is that it has an independent mind and a strong center of gravity that is not dependent on the mayor,” Mandelman said. “That doesn’t mean the mayor doesn’t have power — she has the largest bully pulpit in the city — but it’s not like she can just make a phone call and get six votes.”
In the end, the supervisors jammed part of the mayor’s proposal into the final plan by cutting her four-year funding for shelters and mental health facilities to two years. While that was acceptable to Breed, she was bothered by the supervisors’ last-minute addition: $52 million from the city’s rainy-day fund, money typically saved for extreme and unexpected needs like a recession, to fund teacher salaries through 2021.
The extra $52 million came from the dedicated part of the total windfall and will be provided to the school district as a forgivable loan.
“When our next recession inevitably hits, we are going to need our reserves to prevent worker layoffs and continue funding critical city services,” Breed said. “With this unexpected revenue, the board should have been able to budget with the funds available.”
The mayor has been averse to pulling funds from the city’s reserves, but the supervisors saw it as a reasonable compromise to help everyone get a little of what they wanted.
Peskin, who helped craft the supervisors’ proposal, said he is pleased with the process.
“I think this was a very good sign for governance in the city,” he said. “Both relative for how the board behaved and for how the executive branch interacted with us.
“I don’t think there are any hard feelings,” he added.
The mayor said she will continue talking with the board about her priorities. Since she came into office, she has been working with the supervisors on issues including conservatorship of the mentally ill, freeing up Prop. C funding and a shelter crisis ordinance.
James Taylor, a University of San Francisco political science professor, said it was smart of Breed to stay firm in her desire to spend all the money on homelessness and housing.
“It would have been a mistake for her not to take such a strident position on the windfall,” he said. “You want the mayor to champion (homelessness and housing) as a priority.”
But when it comes to her relationship with the progressive-majority board, Taylor said, “compromise will have to be the model going forward.”
Fewer said the process shows how checks and balances work.
“I don’t think the mayor was thrilled with (the final proposal), but I think she thinks it’s a fair compromise,” Fewer said. “Anytime you push against a power, you ruffle a few feathers.”