San Francisco Mayor Gavin Newsom proposed a local economic stimulus plan this week and said his staff is preparing budget cuts to keep the general fund balanced as the economy slows.
Newsom proposed accelerating bond-funded capital programs, such as the city’s $887 million rebuilding of its public hospital and renovations at San Francisco International Airport, increasing efforts to recruit businesses from China, and a new Tourism Improvement District that would raise $27 million a year from hotels to market the city and improve the Moscone Convention Center.
Nadia Sesay, director of the Mayor’s Office of Public Finance, said she and other city staff members are looking at construction projects to determine which can be accelerated to capitalize on recent declines in construction costs and to boost the economy.
“It’s not accelerating debt, it’s actually accelerating spending” of bond proceeds, Michael Cohen, head of the city’s Office of Economic and Workforce Development, told a sceptical Board of Supervisors earlier this week. “The faster we spend that money, the faster we’re creating jobs.”
Sesay said it was still too early to say which of the bond deals might be brought forward. Voters will decide Nov. 4 whether to approve $887 million of general obligation debt to pay for the reconstruction of San Francisco General Hospital. They approved a $185 million parks measure earlier this year that is also a candidate for acceleration.
Meanwhile, the mayor is also working on budget cuts in the face of a projected $250 million deficit next fiscal year and a $70 million-plus gap in the current year’s budget.
“We anticipated a slowdown, but we did not anticipate a slowdown of this magnitude,” Newsom said. “The fiscal health of the city remains strong, but the budget needs to be adjusted and we need to make changes immediately.”
San Francisco is California’s fourth-largest city. It passed a balanced fiscal 2008-2009 general fund budget of $3.05 billion in June that has quickly fallen out of balance amid weaker-than-expected sales tax collections and continuing sharp declines in real estate transfer tax collections.