Bay Area Reporter - October 8, 2009
Matthew S. Bajko, m.bajko@ebar.com

The city had been bracing for a $26 million cut in state funding from Sacramento because of Governor Arnold Schwarzenegger's decision to use his line item veto power and eliminate nearly $500 million in order to balance the budget. He shocked AIDS service providers and angered lawmakers with the move, which included slashing the state Office of AIDS' budget in half by $82.4 million.

Expecting city coffers would be hit by state leaders, San Francisco lawmakers had set aside $18 million to offset the damage to local programs. Then last month, City Hall learned the city had received an unexpected $6 million increase in Medi-Cal reimbursements, leaving only $2.5 million to be cut out of city programs in the fiscal year 2009-2010 budget due to the loss in state dollars.

This week HIV prevention officials and AIDS agencies received word that the city plans to cover the lost funds for prevention programs and care services. The Board of Supervisors has 45 days to modify and sign off on Mayor Gavin Newsom's plan to deal with the state budget cuts; the first hearings before the board's budget committee is expected to begin next Wednesday, October 14.

"We are delighted the mayor has proposed to backfill the state cuts in their entirety and we are cautiously optimistic and very hopeful the Board of Supervisors will go along with this plan," Grant Colfax, the health department's HIV prevention director, told the Bay Area Reporter late Tuesday, October 6.

The programs that had been at risk included therapeutic monitoring and testing, which is vital to people who are HIV-positive or living with AIDS and taking life-saving medications, and early intervention programs such as HIV testing and counseling.

"The city is picking up payment for all those services," said Mike Smith, president of the HIV AIDS Providers' Network and executive director of the AIDS Emergency Fund.

Colfax had told the B.A.R. in August he was delaying cuts to programs until October 15 in order to give city leaders time to decide how they would distribute the set aside in local funding.

"We know the mayor's office and the Board of Supervisors are working extremely hard to support public health and to reduce the impact of the state cuts," said Colfax. "Letters went out to our HIV prevention contractors to explain contracts would be supported through October 31 unless people heard otherwise."

San Francisco AIDS Foundation CEO Mark Cloutier told the B.A.R. that he met with Mayor Gavin Newsom's new budget director, Greg Wagner, last week and was told his agency's funding would be restored.

"They told me there would be no disruption in services," said Cloutier.

While AIDS officials reacted positively to the latest budget news, they also are concerned that cuts to programs may still be a possibility later in the year if the economy does not continue to improve.

"The city may still be looking at general fund mid-year cuts to services. I think we could still have bad times in the current fiscal year budget at some point," said Smith.

Wagner told the B.A.R. this week there is a "high likelihood" that the state will make further cuts to local funding streams.

"I think it is pretty clear the state is not out of the woods financially by any means," said Wagner. "They closed their budget but still got projections for problems, so there is a high likelihood they will pass some of their problems on to local governments."

Colfax said it is too early to tell what the impact on the heath department's budget will be come 2010 and what, if any, cuts there will be to HIV programs and services.

"I don't have any specific numbers yet on the next fiscal year budget," he said. "We hope to minimize the effects any reductions will have on HIV prevention services."
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