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City warns of major local risks if federal cuts go ahead; Medicaid, CDBG and EPA singled out
Summary
Controller and department heads told supervisors that San Francisco could lose large federal funding streams under proposed cuts: health and human services (Medicaid), Community Development Block Grants and EPA/NOAA programs, and urged coordinated advocacy and contingency planning.
The Budget and Finance Federal Select Committee convened to review potential federal budget actions and to assess local exposure to proposed cuts.
Controller Ben Rosenfield opened with an overview: San Francisco’s fiscal picture includes roughly $1.2 billion in federal operating funds that flow annually through the city budget and about $800 million in infrastructure grants already appropriated but not yet received. Rosenfield said most of the annual operating funds—about 92 percent—support health and human services, particularly Medicaid and public-health programs.
Rosenfield identified three principal risk areas: the January executive order on sanctuary cities (unclear in scope and currently subject to litigation), proposed repeal and replacement of the Affordable Care Act (with major Medicaid funding changes), and reductions proposed in the president’s “skinny” budget that target programs including the Community Development Block Grant (CDBG), Federal Transit New Starts and the National Endowment for the Arts.
Department of Public Health Director Barbara Garcia and Deputy Director Colleen Chavlad described potential effects of the American Health Care Act (AHCA) framework: the city gained about 133,000 residents insurance under the ACA, of whom roughly 25 percent receive care through DPH; Chavlad said California analysts estimate a $6 billion Medicaid revenue loss for the state starting in 2020 and up to $24 billion by 2027 under the AHCA’s current structure, with severe downstream impacts on local providers and programs.
Brian Chu of the Mayor’s Office of Housing and Benjamin McCloskey summarized federal housing program exposure: CDBG provides about $16.4 million annually to the city and HOME about $4 million; those formula programs, if eliminated or cut, would first affect allocations for federal fiscal year 2018–19. Acting Housing Authority Executive Director Barbara Smith said leaked federal proposals indicate the possibility of a 32 percent cut to public-housing subsidies and a capital-fund reduction that would shrink capital funds for properties managed by the Authority and threaten maintenance and staff capacity.
Guillermo Rodriguez of the Department of the Environment warned that proposed cuts to EPA (about 31 percent) and to NOAA, Commerce and DOE programs would reduce grants and scientific support used locally for watershed cleanup, coastal data, climate research and low-income energy assistance; he said the Department receives roughly $1.3 million in federal grants.
Speakers from community clinics and nonprofit supportive-housing providers described dependence on Medi-Cal and federal grants, warned that smaller community-based organizations could be destabilized by funding shocks, and urged partnership with philanthropy and coordinated advocacy. Staff and department heads said many impacts would occur in stages—some immediate uncertainty in May–June when the president releases a detailed budget, but larger Medicaid-related effects likely to appear in 2020 if federal proposals become law. The committee filed the hearing to return with further analysis and contingency recommendations.
