S.F. $76 Million Short on Heels of a ‘Dream Budget’

Just a year after Mayor Dianne Feinstein proudly announced a surplus-laden “dream budget” for “a city that works,” officials revealed Thursday that San Francisco now faces a $76-million deficit.

The unexpected reversal, the subject of City Hall rumors since Monday, has prompted a flurry of finger-pointing by worried politicians, some of whom have called for hearings to diagnose what happened to the city’s $152-million surplus.

In addition to forcing some hard decisions when the new fiscal year starts in July, 1986, the projected shortfall in the city’s $1.7-billion budget also could affect Feinstein’s reputation as a prudent, dynamic leader.

After a series of political successes last year, including consideration as the Democratic vice presidential nominee, Feinstein has been buffeted by serious and very visible problems with the city’s Police Department and General Hospital.

The mayor has had little to say about the budget, except that there may be “no way to avoid layoffs” among the city’s 25,000 employees.

“What kind of management is this?” asked Maura Kealey of one city workers union, the Service Employees International Union, Local 790. “We have gone from a ‘dream budget’ to a deficit in one year.”

Analyst Harvey Rose cautioned that the budget estimate is based on “very conservative projections” of federal aid cuts and other factors. The actual deficit, he said, could be reduced in a number of ways.

“There are many factors that could alleviate the need for layoffs,” Rose said, “including a curtailment of expenditures.” Others, he said, range from boosting bus fares to hoping for a bigger surplus this year.

The mayor attributes the projected shortfall to cuts in federal aid and a $27.7-million comparable-worth pay package adopted recently by the Board of Supervisors over her veto.

However, others, such as conservative Supervisor Quentin L. Kopp, blame the projected deficit on Feinstein’s decision to hire 2,500 new city workers since the passage of property-tax-cutting Proposition 13 in 1978.

“I said at the time (it was drafted) the budget constituted a pandering to the voracious appetite for governmental services,” Kopp said.

Supervisor Richard Hongisto criticized the mayor’s spending on non-essential projects, such as pledging $30 million over three years to redecorate a sports stadium.

“Now . . . there’s no money left,” he said. “That’s her fault, and now she wants to fault us for fighting discrimination against minorities and women by passing comparable worth.”

Supervisor Nancy Walker urged restraint. “We better depoliticize this real quick,” she said, “or we all could be in a lot of trouble.”