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San Francisco’s Incredible Expanding Budget

By July 21, 2016June 23rd, 2017No Comments

Toy Golden Gate Bridge(This story originally appeared in San Francisco Magazine)

San Francisco’s budget has almost doubled over the last 10 years, from $5.3 billion to nearly $9 billion. We’re nearly paying for two 2005 San Franciscos—even though the city has grown by only about 10 percent, or 75,000 people, and even though inflation over the same period has been only 21 percent. By contrast, Philadelphia—another major city-county—had its budget increase from $6 billion in 2005 to just over $8.5 billion in 2015.

Paying almost twice as much money clearly hasn’t solved San Francisco’s problems: We still have decaying infrastructure, thousands of homeless, and not enough affordable housing. So what exactly are we spending our double budget on?

The answer: the same people we were spending it on 10 years ago. The city’s personnel costs—salaries, pensions, healthcare, and other assorted bennies—skyrocketed from $2.6 billion in 2005–06 to $4.4 billion in 2015–16. That’s a 69 percent increase, though the city added only about 3,000 positions (from 26,664 to 29,552, a 10.8 percent increase) during that time. Debt service—the amount we spend paying back money we borrowed, including interest—soared from $525 million in 2005 to just over $1 billion this year.

There are plenty of smaller increases—aid assistance is up by $100 million; the city’s doling out over $300 million more in grants—but once you factor in inflation, most of the additional money goes to pay city employees.

How did we get into this mess? It’s not just that the city is generous with its employees, though it is—742 city workers make more than $200,000 a year; overtime work in some departments has historically been seen as a right, not a privilege; and some workers have enjoyed eye-popping perks (until 2010, transit operators had contracts that guaranteed they’d be the second-highest paid in the nation). Rather, for decades, city hall has been unwilling to save the money it would eventually need to pay for the generous, union-appeasing benefit packages it was giving away; until 2009, five years of work for the city of San Francisco earned you healthcare for life.

Between 2000 and 2010, city contributions into the retirement system grew by—are you ready for this?—66,733 percent (up from $300,000 in 1999–2000 to $200.5 million in 2009–10).

It wasn’t until 2010 that the city began allocating any money at all for the then $4.4 billion (four-fifths of the way to a third San Francisco, for those keeping track) in estimated pending costs for its unmet healthcare liability, on top of the pensions.

San Francisco is paying more and more each year for the people who used to work here; meanwhile, this city has gone into bonded debt to merely pave the roads. At this rate, in another 10 years, we can expect to be paying for three or four 2005 San Franciscos, none of which will be any better funded than the one we had 10 years ago.