How Much City Will Bleed Following State's Budget Grab Still Unclear -- But It Certainly Won't Be Good Times

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But how bad will it be?
With Gov. Arnold Schwarzenegger expected to sign a somewhat modified state budget today, just how badly San Francisco will make out is still as clear as a pint of Guinness. But there'll be no good news delivered today and for the rest of this week -- only relatively good news (something akin to the doctor telling you "this is treatable -- and most people go on to live fairly normal lives").

We reported yesterday that the state hopes to snatch $28.7 million from our local Redevelopment Agency and $1.7 billion statewide -- which prompted an all but certain lawsuit from the California Redevelopment Agency. Deputy city controller Monique Zmuda told SF Weekly that it appears San Francisco is also out $103 million in property taxes -- though the state is mandated to pay this back, with interest, within three years (one is bitterly reminded of the scene in Dumb and Dumber where Lloyd and Harry hand out an IOU for a massive purchase and assure some poor sap that "those are as good as money." Actually, Dumb and Dumber analogies are just too easy to make now regarding state politics. Let's digress). 

Zmuda is unsure how the city will make up that possible $103 million shortfall -- though the promised payback with interest should provide San Francisco (and other municipalities) with the ability to secure loans and multiple cities may form "borrowing pools." More fun than a "drowning pool," but only by so much.

The amount that may be cut from San Francisco's health and human services department, meanwhile, is totally up in the air. While draconian wipeouts of up to $70 million were envisioned when Schwarzenegger proposed eliminating programs entirely, now cuts of "$3 million to $5 million" are the sort Zmuda is bracing for (You see? "Treatable.").

Still, when asked if the contingincy of roughly $17 million in the city's as-yet unsigned budget would cover the funds San Francisco can now no longer can count on from the state, Zmuda quickly responded, "oh no."

In the past, the mayor had the ability to simply make changes to the budget as he saw fit -- meaning that a shortfall in state funds could result in Mayor Gavin Newsom simply axing city programs willy-nilly. Yet thanks to changes in the city's annual appropriation ordinance indroduced a scant week ago by Supervisor John Avalos, this is no longer the case.

Now the controller's office will issue a report within a week of the state budget passing (i.e. this week or early next), after which Newsom has 21 days (blackjack!) to tinker with the budget to make up the difference. And then the supes get 45 more days to tinker with Newsom's tinkering. 

For those who just spent months fighting budget wars, perhaps the only worthwhile quote from The Godfather, Part III is in order: "Just when I thought I was out ... They pull me back in!"

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