San Francisco Examiner - June 2, 2004
Adriel Hampton

Relying on a three-legged approach of deep cuts, labor concessions and new taxes, Newsom spared many direct services and added funding for others.

"I'm hardly proud to say I'm supporting these tax increases ... I'm telling you we simply couldn't do it [cut services] -- and so go the values of The City," Newsom said. "I cannot in good conscience sleep at night. I'd rather resign than close these programs. So, we're asking all of us to pick up a little bit and pay a little bit."

Speaking at the Galileo Academy of Science and Technology and surrounded by hundreds of city workers and officials, Newsom said his proposals solve 85 percent of a $1.03 billion three-year structural deficit, closing a $300 million general-fund gap for the next fiscal year.

While they had immediate questions about certain elements of the package, a bulk of the supervisors expressed support for the basic structure. Despite ideological disagreements, they said the mayor had always been up front about his plans.

"There is going to be some tweaking; that's to be expected," said Supervisor Sophie Maxwell. "But the core is pretty solid."

In his speech, Newsom notably reached out to Supervisor Tom Ammiano, crediting him for the initiatives behind $11 million in funding for public schools and increasing the number of civilian positions within the Police Department.

Ammiano said he's particularly concerned about backfilling AIDS cuts from the federal level and that he would like to see more civilian positions carved out at the Fire Department. He also opposes contracting out city services, but praised the balance of tax increases.

Newsom also avoided any of the jabs at the board that had become common during Mayor Willie Brown's speeches at the wane of his administration.

"The tone was more conciliatory," Ammiano said. The budget package "shows an attempt at equity that we haven't seen from past administrations. I'm intrigued by that."

Newsom has said his tax proposals -- a gross receipts business tax, a revised payroll tax to capture partnership income and a quarter-cent sales tax hike meant to capture $25 million for the 2004-05 budget -- were worked out through extensive outreach to the business community and through polling.

Nathan Nayman, a lobbyist who represents The City's largest corporations, said he would have to study and run the proposal through the board of his Committee on Jobs, but said it sounds like the mayor has been true to his word.

"From what I understand, it's a balanced approach, and he's carrying out what his political campaign said he would do at first blush," Nayman said.

The fiercest opposition to Newsom's plans, which include a $30 million reserve that covers the anticipated revenue from November tax measures at the ballot, came from Board of Supervisors President Matt Gonzalez.

"It's not a balanced budget when you are anticipating revenue from a measure that hasn't been written and hasn't been presented to the voters," Gonzalez said.

Gonzalez said the anticipated tax revenues shouldn't be counted as going toward the budget until after voters approve it. The city controller next week will release an assessment of Newsom's revenue projections.

Budget watchdog Margaret Brodkin, executive director of Coleman Advocates for Children and Youth, praised the new youth initiatives in the budget -- including universal health care for 19- and 20-year-olds -- but she has asked the board to do more for child care and violence prevention.

Mayor's 2004-05 budget solutions

Current year reductions: $23 million (7.4 percent)

Revenue leveraging, fee increases and other funding: $39 million (12.8 percent)

Debt refinancing and capital asset sales: $33 million (10.8 percent)

Department operating and capital budget reductions: $114 million (37 percent)

Employee contributions to retirement: $53 million (17.2 percent)

Tax increases: $25 million (8.1 percent)

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