Newsom Offers Cuts, Warning

San Francisco Mayor Gavin Newsom cut $71 million from the $3 billion fiscal 2008- 2009 general fund budget to close a mid-year gap and warned that the city may face a deficit of $575.6 million in the coming fiscal year.

Newsom’s mid-year budget plan also included $47 million of new revenue, much of it newly identified unspent funds from previous budget years. All told, the cuts and new revenues totaled $118.3 million.

Controller Ben Rosenfield in October said tax collections had slowed so much that the city would collect $90 million to $125 million less than budgeted for the current fiscal year. He forecast that property transfer tax collections would come in as much as 48% below expectations, while state and local sales tax revenues would post outright declines of 2% to 5%.

Newsom’s budget staff spent the past month and a half working to come up with cuts and new revenues. They proposed reductions in budgets for both administration and direct city services.

About 47% of the cuts came from general administration and finance costs, but the balance came from services, particularly public health, welfare, and neighborhood development.

Under the plan, San Francisco will fire 399 workers and eliminate 313 vacant positions. Newsom also proposed delaying two police and sheriff academy classes to slow hiring.

Under the city charter, Newsom is required to reduce the budget to keep it balanced, and the cuts do not require a vote of the Board of Supervisors.

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