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Mayor's proposed budget and controller's revenue letter outline multiyear shortfall and balancing strategies
Summary
The Mayor's budget office presented a proposed FY 2011' 2012 budget relying on a mix of one-time funds, revenue growth and expenditure reductions; the controller's revenue letter called the mayor's revenue assumptions reasonable but flagged a projected structural shortfall of roughly $350 million next year and outlined multiyear measures and potential ballot items to close it.
The Budget and Finance Committee received a high-level overview of the mayor's proposed FY 2011' 2012 budget and a separate revenue letter from the Controller's Office that assessed the proposal's revenue assumptions.
Greg Wagner, the mayor's budget director, said the budget closes a structural shortfall through a combination of revenue improvements, one-time or nonrecurring sources and about 56 percent of the solutions on the expenditure side. Wagner cited a rebase of capital spending (about $35 million in one-year capital reductions), restructuring of debt service and department-level savings as part of the approach. He noted significant pressures from pension and health-care fringe-benefit growth and the loss of state and federal revenue streams used in prior years.
Controller Ben Rosenfield said the revenue assumptions in the mayor's proposed budget are reasonable "given current thinking about the state of the local and national economies" but warned of extra uncertainty tied to the state budget. Rosenfield projected a possible FY 2012' 2013 shortfall of roughly $350 million and described a multiyear plan adopted in the city's five-year financial plan. That plan includes capital spending rebasing, suspending some nonprofit cost-of-living adjustments, capping hotel-tax allocations and two mayoral ballot measures (a pension benefit charter amendment and a half-cent local sales tax) that together could materially reduce the projected shortfall.
The budget analyst recommended approving the interim appropriation and salary ordinances that would keep city operations funded for July while the full budget review proceeds, but flagged two policy provisions in the administrative language (deleting a charter reporting/hearing requirement related to state impacts and creating a new unspecified employee stipend for personal cell-phone use) for further review.
Members of the public and union representatives used the public-comment period to urge protection of public-health services and to press the committee to avoid across-the-board cuts that would harm low-paid home-care workers. The committee forwarded items 2 through 5 with recommendation and continued the hearing on the revenue letter (item 6) to the call of the chair for additional review.
