Amid recession, is San Francisco losing its heart?

Famously liberal in its politics and its spending, San Francisco is steering a new spendthrift path amid the federal Keynesian revival – cutting antipoverty and social-service programs that helped build the city's reputation as a haven for the poor.

As homeless tent cities rise up in nearby Sacramento and across the country, deep spending cuts here have ignited a debate over the city's reputation and priorities, and raise a larger question: How will cities care for the widening ranks of poor and homeless in a recession that may get worse before it gets better?

To close a projected $438 million shortfall, Mayor Gavin Newsom – who is campaigning for the 2010 governor's race – has proposed a "target" of 25 percent cuts to all city departments, including large reductions to health and human service programs that, combined with deep midyear spending cuts, mean the closure of some popular antipoverty programs this July 1.

While such belt-tightening is hardly unique to San Francisco, the cuts have many asking if this iconic "Left Coast" city has moved to the right of the federal government, which is spending nearly $1 trillion to revive the economy. San Francisco's reputation for benevolence was affirmed by a recent city controller's report, which found that the city far outstrips its California counterparts in per capita spending on public health and social services.

The cuts run counter to "what this city ought to be – a caring city, caring for the people who live in this city and caring for people who serve this city," said Damita Davis-Howard, president of the Service Employees International Union's municipal workers local, at a recent City Hall protest of about 700 city workers. "People are losing their houses, people are losing their savings, their retirement, and it's the services in San Francisco that help those people in crisis."

In one of the poorest districts of the city, the Tenderloin neighborhood, a drop-in center for Latinos is slated to be cut completely, and the Tenderloin Community Resource Center loses its funding as of July 1. [Editor's note: The original version incorrectly stated that Tenderloin Health, a flagship health program, would close.]

Barbara Lopez, a community organizer with the Tenderloin Housing Clinic, which will also see deep cuts, is among those who see a contradiction between the federal stimulus and local policies.

"The stimulus is about protecting the safety net and stabilizing communities, so why does our mayor feel the need to cut these services?" asks Ms. Lopez. "The city leadership has moved to the right of national leadership." San Francisco, she says, "has this reputation as a very liberal city, and socially it is liberal, but I think our dirty secret is that we're really economically conservative."

More broadly, liberal leaders say conservatives here are using the recession to move social policy to the right.

"The shock of the deficit is being used to make some of the changes that more-conservative forces in the city have been trying to make – privatization, reduction in services to the most needy, cutting health services that are primary care services," says city Supervisor John Avalos, who represents a largely working-class district.

But Supervisor Sean Elsbernd sees it differently: "These are horrible cuts across the board – they're not disproportionately impacting the poor. Every San Franciscan is going to feel the effects of this budget." Argues Mr. Elsbernd, "There needs to be a recognition that we're not in this budget situation just because of the downturn, but because of our spending practices over the years."

Mayor Newsom's press secretary, Nathan Ballard, says the mayor "has made decisions in the best interests of the city, and he stands by his decisions ... there are no easy choices. Every cut has a constituency."

Indeed, social programs are not the only budgetary victims: Police, fire, and other departments have been asked to slash one-quarter of their spending, and all but the Public Defender's Office have complied, says Mr. Ballard.

The federal stimulus will pump about $50 million into city coffers, but it's not nearly enough to fill the budget gap. Instead of cutting programs, some city leaders are pushing for a special election this summer to raise taxes – possibly a gross receipt tax and hikes in levies on commercial property and sales.

Says Supervisor Avalos, "I don't think we can just cut our way out of the problem ... we can't lay off people to get out of this, we have to raise some revenue. We have a lot of wealth in this city, and we have to move it around to alleviate the deficit."

The mayor has yet to endorse or oppose a tax increase to avoid the cuts.

"We're open to new revenue measures," insists Ballard, "but it's got to go hand in hand with reform, which includes consolidating departments and streamlining government."

As programs are cut, advocates report that needs are rising as the recession deepens. One measure: More homeless people are being turned away from shelters each night.

"We have this huge increase in the number of people who are poor and a disintegration of the cornerstone poverty abatement programs" such as job training and affordable housing, says Jennifer Friedenbach, executive director of the Coalition on Homelessness.

"It's the exact opposite approach of what you would want," argues Ms. Friedenbach. "You would want in this time of recession and increased needs to have this really creative response from city government to turn it around, and instead the proposals on the table are to balance this huge deficit on the backs of the most vulnerable San Franciscans."