Last week, Mayor Breed asked her department heads to propose 10% spending cuts for the upcoming year, along with 5% “contingency reductions” she could draw on if the city needs to make even deeper spending cuts down the line. City officials are now projecting the budget deficit could reach $800 million over the next two years, up almost $300 million from projections in October, when Breed pushed for atypical mid-year spending reductions. These initial cuts are “just a small down payment,” the Mayor said earlier this month. “Much larger [ones] will be needed in the months ahead.”

Disaster comes at you fast. Remember, this July, Breed signed a $14.6 billion budget that purported to close the deficit using one-time funds drawn mainly from an opioid lawsuit settlement with Walgreens and FEMA reimbursements for pandemic spending. The crisis seemed (temporarily) averted at the time, though City Controller Ben Rosenfield quietly warned “the use of one-time or nonrecurring sources to support ongoing operations creates a future budget shortfall.” Four months later, Rosenfield resigned, the deficit returned, and Breed began the first round of cuts. Now, city officials desperate to shirk responsibility are pointing fingers at late FEMA payments and lower-than-expected tax revenue.

Two observations here. First, on an immediate level, the recurrence of the deficit almost immediately after it was supposedly closed reflects very poorly on the Controller’s Office, which should have been more careful with its predictions. (Unless outside actors were pressuring the Controller to “make the numbers work” — a plausible, if entirely speculative, thought.)

Second, and more broadly, the deficit reflects the obvious fact that the city is spending way too much on things that either don’t benefit taxpayers or actively drive them away. To name a few: indefinitely subsidized, non-sober housing for homeless addicts (which costs the city at least around $300 million per year); tens of millions in grants for inept and unaccountable nonprofits (see: Dream Keeper, Health360, Urban Alchemy, etc); and costly “safe drug consumption sites” that enable addiction. These policies, coupled with ever-increasing business and property taxes, have degraded the quality of city life, pushing taxpayers out and inviting state-dependents in. That the macroeconomic result of this combination is a soaring, intractable budget deficit should come as a surprise to no one.

CITY HALL

policy, power struggles, and more from the legislative and executive branch (and their sprawling army of unelected hall monitors)

• The Board of Supervisors is currently on legislative recess until January 5. It’s been a long quarter filled with narrowly-avoided housing policy sanctions, futile attempts to solve foreign wars, and quiet reallocations of massive sums of money to shady nonprofits — only way is up from here? (I’m not holding my breath.)

• In January, keep an eye out for Supervisor Chan’s hearing at the Budget and Finance Committee on the city’s five-year budget plan and Mayor Breed’s order to accept and expend a billion-dollar state grant for overdose prevention efforts. 

• An explosive report by Joe Eskenazi at Mission Local found the “Senior Home Repair Program,” which was funded by part of a $20 million Dream Keeper Initiative grant, has only repaired three homes in two years. Where did all the money go?

• Dream Keeper, the Human Rights Commission, and the Department of Public Health, among others, will financially sponsor a week-long Kwanzaa celebration starting at City Hall on December 26. The celebration will feature daily “libation ceremonies,” live entertainment from celebrity performers, and “a feast at each event.” (Check out my colleague River Page’s excellent piece for the sordid history of the holiday.)

• Newly released records show that, during APEC, the city spent around $7.75 million on parties and paid city workers around $11 million in overtime.

• Supervisor Preston’s Gaza ceasefire resolution was assigned to the Rules Committee, while Supervisor Walton’s “Apologizing to African Americans and Their Descendants” resolution was assigned to the Government Audit and Oversight Committee. 

• A new poll suggests 66% of likely voters in the upcoming March elections will support Proposition F, Mayor Breed’s proposal to condition cash welfare benefits on drug screening for suspected addicts. 

• Moderate political group TogetherSF announced it will withdraw and redraft a ballot proposition to eliminate city commissions, following criticism from City Hall insiders who said the measure would give more power to an obstructionist Board of Supervisors.

MEMO SACRAMENTO

a brief, essential spotlight on the state of california

• California’s homeless population increased by 5.8% in 2023, to over 180,000, while the overall US homeless population increased by 12%, to around 653,000. California now accounts for almost half of all unsheltered homeless people in the country.

• Relatedly, be sure to check out Brandon Gorrell and my recent piece debunking the deliberately deceptive studies used to prop up the claim that most of San Francisco’s homeless population are long-time city residents.

• In a press conference on Friday, Governor Newsom slammed California counties that have been slow to adopt a new law (SB43) allowing the state to place severely drug addicted people into involuntary psychiatric holds or medical treatment. Only San Francisco and San Luis Obispo counties currently plan to implement the law next month, when it comes into effect. 

• At a town hall yesterday in Dixon, the CEO of California Forever, an investor-backed company attempting to build a new walkable city in Solano County, announced the company will disburse $500K in grants to local nonprofits. Because when has attempting to buy political favor via large cash transfers to fundamentally unaccountable organizations ever not worked out for people trying to run a city?

ROSE ALERT

notes from the bay area’s beloved class of local activists

• On Monday, dozens involved in last month’s Bay Bridge protests, in which people calling for a ceasefire in Gaza blocked traffic (including first responders) for hours, were arraigned at San Francisco Superior Court. DA Brooke Jenkins has charged them with false imprisonment, refusing to comply with a peace office, unlawful public assembly, refusing to disperse, and obstruction of street, sidewalk, or other place open to the public. 

• Protesters calling for Jenkins to drop the charges swarmed the Superior Court building as their peers were arraigned.

• Public Defender Mano Raju appears to be defending some of those charged, despite the fact that none are demonstrably indigent — a strange violation of the usual practice of public defenders, who are only supposed to represent those otherwise unable to afford an attorney.

• Federal Judge Araceli Martinez-Olguín has ordered Berkeley to halt its plans to sweep a large homeless encampment on Harrison and Eighth Street after attorneys from the East Bay Community Law Center helped residents sue the city in August.

MAN WITH MACHETE

crime and intrigue around the city

• Bystanders successfully detained a 35-year-old man who stabbed a 74-year-old during an attempted smash-and-grab in the Marina District on Friday. The man was taken into custody once police arrived on the scene. 

• A 42-year-old “aspiring rapper” who is on probation for a drug distribution conspiracy and recently assaulted an 80-year-old at a BART station was granted permission to “fulfill performing and recording engagements across California” by Senior District Judge Charles Breyer.

• A man who two years ago impersonated a dock worker, attempted to steal a motorcycle, and bit the cop trying to arrest him, was convicted of three felony counts on Friday. 

• Family-run Oakland donut shop Colonial Donuts was hit with another armed robbery on Monday. The store had previously been targeted by armed robbers in June. No arrests have yet been made. 

• Newly released transcripts show the SF District Attorney’s office backed the parole bid of Royce Miller, who brutally murdered a 17-year-old high school student in 2004, against the wishes of the victim’s family. “We cannot know how sincere [in his contrition Miller] is,” said Assistant DA Alex Bernstein, “but I believe that he is.”

• DA Brooke Jenkins announced Javier Campos III, the 23-year-old suspect in June’s mass shooting in the Mission District, will be charged with a series of crimes, including assault with a semi-automatic weapon and unlawful firearm possession.

AROUND TOWN

stories from the neighborhood you should know about

• Around 36% of the city’s office space is currently vacant, an increase of over two percentage points compared to the last three months.

• A construction project that will start January 16 and close one of SFO’s four runways for five months will likely cause massive flight delays throughout winter and spring. 

• Heavy rain on Monday flooded the intersection of 18th and Valencia, prompting renewed questions about the city’s ability to keep drain pipes clear. (In 2016, the city launched an “Adopt-a-Drain” program to shunt some of this responsibility off to individual residents.)

• The Parks and Rec department just opened a $355,000, eight-court pickleball complex at Larsen Playground in the Sunset District. So apparently pickleball is a real thing. 

• TechStars employee Michelle Fang is putting together a crowdsourced “Guide to San Francisco for Founders” covering events, workspaces, startup programs, finding houses, and more. The guide will soon be available as a Notion wiki.

• The Senate aide whose sex tape went viral last week is reportedly a Bay Area-native who graduated from Palo Alto High School and UC Berkeley. 

• Gazetteer San Francisco, a mysterious “soon-to-launch local news website” backed by Talking Biz News, has put out a call for a managing editor. 

• Non-residents will enjoy free admission to the city’s beautiful Botanical Garden on Christmas Day. The garden is always free for city residents — and well worth the visit!

• Legendary indie artist Toro y Moi will perform at the Moongate Lounge on New Year’s Eve. (Yes, I am shamelessly only including concerts from musicians I like.)

• EaterSF just dropped a guide of the 18 best places to eat a taco in the city and my favorite spot — Taquería Los Mayas — made the list. Good taste confirmed.

Thanks for reading as usual. As a heads up, Dolores Park will be on break between Christmas and New Years, so no newsletter next week. Enjoy the holidays, and see you in 2024!