SF examines impacts of its many budget set-asides

Supervisors Katy Tang and Aaron Peskin at a Board of Supervisors meeting last year. Supervisors Katy Tang and Aaron Peskin at a Board of Supervisors meeting last year. Photo: Gabrielle Lurie, Special To The Chronicle Photo: Gabrielle Lurie, Special To The Chronicle Image 1 of / 1 Caption Close SF examines impacts of its many budget set-asides 1 / 1 Back to Gallery

San Francisco lawmakers are beginning to take a hard look at the long-term consequences of the city’s abundant use of budget set-asides — voter-approved ballot measures that mandate how the government spends money on specific projects.

Since the mid-1990s, the amount of money San Francisco has allocated based on voter-adopted initiatives has ballooned dramatically, according to a report compiled by the city controller’s office. That has alarmed some city supervisors.

In the next five years, the report said, San Francisco will spend $1.6 billion on set-asides— 30 percent of the city’s $5 billion general fund, its primary source of discretionary funding. Self-supporting departments such as the airport comprise the remainder of the city’s $10.1 billion budget.

That’s a sharp increase from just over a decade ago. By comparison, in the 1994-95 fiscal year city spending on set-aside initiatives was $200 million, according to the report.

At a hearing before the Budget and Finance Committee Tuesday, Supervisors Katy Tang and Aaron Peskin expressed concern about constraints the set-asides place on policymakers as budget priorities shift year to year.

While set-asides provide a fixed amount of funding for essential city services, like transportation and libraries, once funding is locked up by the voters, city officials are essentially powerless to make adjustments, Tang said.

“Future boards of supervisors and mayors essentially have their hands tied for many of these measures,” she said. “We don’t have the ability to be flexible in these funding decisions.”

San Francisco currently has 19 set-aside mandates, far more than any other large city in the state, according to the controller’s office. In fact, local governments in the rest of California have a total of 10 similar funding requirements.

“For comparison to other cities, Los Angeles has two adopted requirements, San Diego has one and San Jose has none,” the controller’s report said.

Most of San Francisco’s set-aside requirements — nearly $418 million — are allocated for the Municipal Transportation Agency.

“All of the set-asides are for remarkably worthy causes, but it really constrains the city, the Board of Supervisors and the mayor from being able to make tough decisions on an annual basis,” Peskin said. “It’s the easy way out — it doesn’t require us to look for new sources of revenues” and it “constrains the ability to govern and allocate money in the best and most mature way that’s most responsive to the needs of the day.”

City officials on Tuesday briefly discussed placing expiration dates on all existing set-asides, which would allow legislators to reconsider spending mandates after a period of time. Such a move would have to be approved by voters. Currently, only 10 of the city’s 19 set-asides have fixed expiration dates.

“My goal is to work on a set of policies to address our spending” set-asides, Tang said.

Dominic Fracassa is a San Francisco Chronicle staff writer. Email: dfracassa@sfchronicle.com Twitter: @dominicfracassa