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Mayor's rebalancing plan would rely on reserves and one-time shifts; supervisors press for housing and childcare safeguards
Summary
The Mayor's Budget Office told the committee a $250 million current-year gap is being addressed largely with one-time measures including capital-project shifts, ERAF reallocations and a $78 million draw of the general reserve. Supervisors and the Budget & Legislative Analyst pressed for clarity on housing bond shifts and childcare impacts.
The Mayor's rebalancing plan to close a current-year fiscal shortfall relies heavily on one-time adjustments, reallocated prior-year ERAF funds and the maximum permitted draw from the city's general reserve, Deputy Budget Director Ashley Grafenberger told the Budget & Appropriations Committee on June 3.
Grafenberger summarized the city's budget outlook: the controller and analysts project roughly $1.7 billion in shortfalls over the next three years and a $250 million current-year gap. To address that gap the mayor's plan combines capital-project reductions (about $52 million), departmental savings (about $39 million), reallocated ERAF funds (about $59 million), debt-savings assumptions and an approximately $78 million draw from the general reserve.
The plan shifts roughly $40 million of ERAP (ERAF) affordable-housing financing onto the previously approved 2019 affordable-housing bond; budget staff said active projects would not be delayed but acknowledged this reduces immediate local funding capacity in later years. Dan Goncher of the Budget & Legislative Analyst's Office presented a companion analysis that detailed which capital and DPW street projects, justice-facilities contingencies and small capital balances were included in the proposed reductions.
Supervisors raised concerns that shifting ERAF funds and repurposing PayGo capital reduce local flexibility at a time when the city may find opportunities to acquire sites or accelerate housing. Supervisor Mandelmann and others pressed budget staff to confirm that two District 11 affordable-housing projects already in development would not be delayed; the budget office and controller said those projects would remain on schedule despite the funding-source change.
Childcare and early-education funding were another focus. The mayor's plan would use a portion of multi-year ERAF allocations that had been set aside for childcare capital and teacher stipends; committee members and multiple childcare providers warned that reducing those allocations risks shuttering fragile child-care capacity at a time when physical distancing reduces usable slots.
Grafenberger described the rebalancing choices as largely one-time fixes, and BLA staff offered two policy options for committee oversight: an update on Justice Facilities planning and a joint review of ERAF reallocations affecting early childcare subsidies and teacher stipends.
The committee did not take final action on the rebalancing plan; after public comment it voted to continue Item 2 to the call of the chair so staff can provide further analysis and follow-up.
