SAN FRANCISCO - The San Francisco Board of Supervisors last week decided to pull a $368 million general obligation bond for street repairs from the November ballot after lawmakers decided voters are in no mood to approve more debt.
"In recent weeks, as we have started to discuss this out in the community, it is clear that this is a measure that needs a little bit more work before it could be presented to voters," said David Chiu, president of the Board of Supervisors and proponent of the street bond.
"We need to continue with community outreach to build as large a coalition as possible," he said.
In other words, even in San Francisco - where voters are usually generous in approving infrastructure improvements - this is not the time to ask voters to pay. Just last November, voters approved $850 million of GOs to finance reconstruction of San Francisco General Hospital with 83.4% of the vote, but the economy has steadily declined since then.
San Francisco's jobless rate jumped to 9.8% in June from 5.2% a year earlier, according to the U. S. Bureau of Labor Statistics. The June reading far surpassed the 7.5% peak during the dot-com crash in the early part of this decade.
Median home prices in the city fell by almost 20% in the year ended May, according to DataQuick, a real estate data provider. The commercial real estate vacancy rate jumped by a third to 15.2% in the second quarter compared to a year earlier, according to Grubb & Ellis, a commercial real estate services and investment company.
The economic slowdown left the city and county of San Francisco - which is a single government body - with a $400 million-plus budget gap this year. Chiu and the Board of Supervisors have discussed ballot measures that would raise revenues, but they haven't been able to agree on tax increases that they are ready to take to voters.
Instead, they balanced the budget primarily by cutting spending in a budget deal with Mayor Gavin Newsom. The deal also includes fee increases, such as a fee on cigarette sales that aims to recoup the city's cost of cleaning up cigarette butts, and higher parking fines.
The difficulty in San Francisco underscores the tough revenue environment in California, where local officials are battling steep declines in revenue but know it will be difficult to get voter approval for new taxes.
Like voters across California, San Francisco voters rejected most of the state's budget-balancing measures at an April special election.
In May, Chiu and Newsom proposed the bond referendum for the November ballot. The bonds would have financed the resurfacing of streets, repair of stairways and sidewalks, construction of curb ramps, and improvements to streetscapes.
The bulk of the money - $209 million - would have been used for street resurfacing. The city would use $93 million for streetscape improvement, such as landscaping, tree plantings, pedestrian lighting, and sidewalk expansions, and it would spend another $30.6 million to rebuild curbs and ramps to comply with the Americans With Disabilities Act.
The balance would have funded repairs to sidewalks, bridges, guardrails, tunnels, viaducts, and other basic infrastructure.
Some in San Francisco were glad to see the street bond pulled from the ballot because the measure would have paid for some routine road and sidewalk repair expenses out of the city's capital budget, not its operating general fund budget.
That prompted the opposition of Supervisor Sean Elsbernd, who helped create San Francisco's capital improvement program, the city's long-term bonding plan. Elsbernd does not want San Francisco paying for short-lived repair and maintenance projects with long-term financing.
"Let's find another way to do this," Elsbernd told the board. "The opposition to using GO bonds to pay for street resurfacing will be here tomorrow - will be here another year from now."
