National Problem
Download
Report
Transcript National Problem
16th Annual Real Estate
Conference
The New Reality Of California Budgets
San Francisco Assessor-Recorder
Phil Ting
May 24, 2011
Two Things All Voters Agree On
No
New Taxes
Don't
Cut My Services
SF’s Budget Crisis Is Not Unique
National League of Cities report
Personnel Cuts - 79% of cities
Capital Projects - 69% of cities
San Francisco's 5-yr plan includes $433M in revenue growth
Still have $829M deficit in the 5th year (FY15-16)
SF must define program priorities instead of across the board
cuts
Need measurable outcomes to determine how much funding
required to achieve program objectives
SF's Projected
General Fund Budget Gap
900
$829
800
$746
700
$619
$ in Millions
600
500
$458
400
300
$283
200
100
0
FY11-12
FY12-13
FY13-14
FY14-15
FY15-16
$283M (FY11-12) to $829M (FY15-16)
How Did San Francisco Get Here?
Economic downturn reduced revenues
General Fund revenues down $139M (5%) from FY08-09 to
FY10-11
AAB appeals filed increased 570% over past two years
9% of SF’s parcels have a temporary (Prop 8) reduction
compared with 26% statewide
Increase demand for services
41% increase in food requests – 30% of demand unmet
61% increase in residents on food stamps over past 2 years
SF established call center to handle food stamp demand –
10,000 questions a month on that subject alone
How Did San Francisco Get Here?
Constraints on both Raising Revenue and Cutting
Expenses
Personnel costs continue to increase
2/3 vote to pass taxes
Wages and benefits governed by contract
25% of the $4.48B CCSF currently owes employees in
pensions is unfunded
City’s spending on pension costs has tripled in the
past decade
$125M to $357M
San Francisco Tightening Its Belt
Sample
of Cuts Made in FY10-11
$20M in transportation, street, sewer and
sidewalk repair and maintenance
$15M in salaries from SF Sheriff
$7.5M in salaries from SFPD
San Francisco Needs $829M
Need
$829M
What Can San Francisco Do Going
Forward?
Pensions: put retirement payouts on sound
financial footing
Managing health benefits costs
Raise retirement age for new employees
Increase contributions for all employees who earn over $50,000
Stop pension spiking; salary over 3 years
Improve employees’ health through preventative care
Increase cost sharing with employees and retirees
Each 5% decrease in health care costs will save $30 million
Saves $100M annually
San Francisco Needs $829M
$829M
Need
Reform
Pension and Health
$100M
What Can San Francisco Do?
Contain Costs - Active Employees
Wages & salaries projected to increase 32%
over next five years ($647 million total)
Existing wage concessions ($230 million over
two years) expire in FY11-12
Each 1% reduction in wage costs saves $12
million
Concessions save $115M annually
San Francisco Needs $829M
Need
$829M
Reform
$100M
$115M
Pension and Health
Wage Concessions
What’s The Impact Of Drastic
Cuts?
Police
Fire
20% cut = $53M = close 8 of 42 firehouses
Public Health
20% cut = $80M = 960 police officers
20% general fund = $109M = less services for mental
health, HIV prevention, H1N1 inoculations
Total Savings = $242M
Not an option – no public support
Doesn't close 1st year gap!
San Francisco Needs $829M
Need
$829M
Reform
$100M
$115M
$242M
Pension and Health
Wage Concessions
20% Police, Fire, Health Cuts
Gap With Drastic Cuts
$372M
Additional Budget Tricks
Restructure
Limit
Debt/Delay Capital Spending
Inflation Allowances
Miscellaneous
Smoke
Dept Savings
and Mirrors
San Francisco Needs $829M
Need
$829M
Reform
$100M
$115M
$242M
$218M
Pension and Health
Wage Concessions
Budget Cuts
Budget Tricks
Still Remaining
$154M
Show Me The Money!
$433M revenue growth from improved economy
already in 5-yr plan
New revenue needed in addition
Revenue increases require voter approval
(Prop 13 and 26)
Rate adjustments for permits, fees and other
revenues
Give cities local taxing autonomy
Property Taxes Contributed 36% ($985M)
Of FY09-10 General Fund Revenues
$158.5
$160
$150.9
$141.9
$140
$130.6
$120.4
$120
$112.1
$105.1
$94.4
Billions
$100
$80
$98.8
$87.9
$78.3
$60
$40
$20
$0
FY00-01
FY01-02
FY02-03
FY03-04
FY04-05
FY05-06
FY06-07
FY07-08
FY08-09
FY09-10
FY10-11
Transfer Tax Revenue $43M Over
Budget In FY10-11
$160
$140
$120
Millions
$100
$80
$60
$40
$20
$0
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
How Can San Francisco Deliver
$154M in New Revenue By FY15-16?
Sales
Tax
Hotel Tax
Parcel Tax
Payroll Tax
Permit & Fees
Local Autonomy
San Francisco Will Come Out Ahead
First ever 5-yr financial plan released
San Francisco needs to raise revenue - avoid
one-time band aids
City must define program priorities instead of
across the board cuts - structural reform
Improve efficiency - use measurable
outcomes to determine funding required to
achieve the program objectives (SPUR)
That’s All Folks
2010-11 General Fund Uses
Transfers Out, 14%
General City
Responsibilities,
4%
Community Health,
18%
Administration &
Finance, 6%
Culture &
Recreation, 3%
Human Welfare &
Neighborhood Dev,
22%
Public Works,
Transportation &
Commerce, 1%
Salaries = 37%
Benefits = 14%
Non-Personnel Operating
Costs = 17%
Public Protection,
32%
Transfers Out = 14%
Aid Assistance = 10%
Grants = 5%