Why not spending reform?

Nick Vojdani's picture

Instead of talking about tax reform, San Francisco needs to first have a serious conversation about spending. We need to make some tough choices and figure out where our priorities lie. Taxes wont solve everything. It is important to have a broad revenue base for the city but we cant tax our way out of the problems we are facing. What does everyone else think? 

NKlein82's picture

Bad Timing

At a time when many people are out of work and services are already being cut, I think we need to hold off on spending reform.  We are seeing that as the state cuts more services the state's economy has suffered.  San Francisco should not mirror this, but instead focus on the best use of our tax dollars and not how to cut.

bobbyh's picture

Spending/Tax reform should go hand in hand

The solution to our budget issues lie in both spending and tax reform, we cannot have a conversation about one without the other.  We can't simply talk about tax reform or spending reform in isolation--we need to change the way government operates so it runs more efficiently and spending is at a level that is sustainable in the long run. And, we also need to take a hard look at our tax system to ensure it is fair, equitable and creates a healthy environment for businesses and residents alike to thrive here while giving our local government the resources to provide the quality of life we enjoy. 

It's simple budget management that we can all relate to on a personal level--if in our family budgets we realize that we are falling short, we not only look at how we can change our behavior to save money but also how we can earn more money! The end result is that you don't need earn as much more if you cut some spending, and you don't need to cut as much if you earn more. 

But I do think we are at a point where people just don't trust government to spend our money wisely, which I can't disagree with, and if we are able to reform our spending practices to re-instill that confidence, people will be willing to have a conversation about taxes because they will know that their money is going to good use. I think future tax reform will be better served if it is also presented hand in hand with spending reform--that is what I believe voters would like to see. At least I do.

Phil Ting's picture

Getting the most out of dollars

We need to make sure every dollar spent is being used wisely and efficiently.  Where does all the money go?  As public officials, we do a poor job of telling people that most of money does go towards education, public health, public safety and human services.  Consistently the, the priorities of the people.  The question is are we using every dollar to the best of our ability?  Are we becoming more efficient every day?  Is government delivering the services the best way we can?  We need to communicate where every tax dollar is going.  Then we need to make sure every department is doing the best job possible.  We need measures which really hold each department accountable and will actually tell the people whether or not government is performing.  This way if someone missesthe bus or gets a rude driver, they dont lose complete confidence in government.

bobbyh's picture

Efficiency

I think the problem is that people don't think that government is getting more efficient everyday, and in fact, probably believe government is getting less efficient everyday.  Especially now, when residents and businesses are feeling the pain from the recent recession, people are less tolerant of government waste and want to see something done about it.  What we have is a crisis in confidence in government, whether one believes its deserved or not, something needs to be done to regain that confidence or its only downhill from here.  If departments are doing a good job of controlling costs and working to be as efficient as possible, let's give them the ability to show that--and performance measures are a great way to not only accomplish that, but to show the constituents. 

I would add though that those measures, as they will have to be by design "wonky", are boiled down into a single "grade" for each department so the public can digest the results and more easily distinguish which departments are doing well, and which are not. I.e. Rec and Park gets an A-, Department of Public Health gets a C+, etc. Publish these widely and let everyone know who is serving the people, and reveal those who are not.  Let the Mayor and the Board use those grades during budget season to determine where those hard earned tax dollars should go...I guarantee the underperforming departments will step into line very quickly.

I also think we need to incentivize departments to save.  Right now, if a department doesn't use its budget, it is usually taken away from them, so departments have a disincentive to save.  Let's reward good departments by creating a system that allows those efficient departments to retain some of the savings they worked so hard to accomplish. 

Phil Ting's picture

Two Year Budget and Efficiency

You bring up a great idea - we should have a complete two year budget.  Last year, I supported a ballot measure to have a two year budget, but its actually a two year budget plan which is renewed annually.  When I moved from the Asian Law Caucus to the Assessor-Recorder's office, I treated the department's money like I treated a small business.  Every penny matters and every dollar should be spent wisely.  I was surprised to find out that all the money I saved which back to the General Fund and to add insult to injury because I didnt spend enough money in certain categories then my budget was cut in those categories as well.  Tell me what incentive do we have to save money?  Departments are incentivized to spend money, otherwise they will lose it.

Government needs to communicate where the money goes and what it's spent on.  We dont set expectations very well.  If you have a dollar and walk into a store you can expect to walk out with a candy bar but not a full meal.  Most people believe they are paying a lot in taxes and the amount of taxes they pay should cover everything they consume.  Because everyone pays different levels of taxes, some people are consuming more than they contribute, others are consuming less.  We should have a tool which tells people what there taxes went too - should the tax bill say - "Thanks for your $10,000!  This pays for xx parks, xx streets, xx buses and xx police officers." 


What do you think about that idea?

 

buchsons's picture

Compensate City Officials on Performance

We should change the comp plan for the Supervisors and Mayor (and perhaps other city execs) so at least 33% of their pay is at risk.  Here is an example:

Supervisors make around $100K today.  Why not pay them a $67K base with a potential upside of $133K?  If they balance the budget without raising taxes they make $100K, and depending on the level of surplus they can create without tax increases  they can earn a maximum of $133K.  A second bonus factor could be a gains in a quality of life index, however it would take some time and debate to create an appropriate quality of life metric that is clear.

Most private sector jobs have a combination of a base and performance based bonus.  At a minimum we should comp the supes on how well they manage the budget without a tax increase.

For a guy like Gavin Newsom it may not make much difference, as I suspect that he really doesn't need his $250K salary.  However it would make a difference for quite a few of the supes and other city officials.

Conservative Ideas's picture

Supervisors don't take public

Supervisors don't take public office for the $100k salary, it's a stepping stone to other political aspirations and/or power to "reset SF" with their ideologies.

Pay for performance has validity, but the problem with SF government spending comes down to the liberal pensions.  Defined benefits, instead of defined contributions are an anchor around the taxpayer's neck.

Benefit plans must be addressed NOW.  But in a beautiful city full of dirty liberal union corruption, that's easier said than done.  One election at a time, we'll rid the government of fraud/waste and abuse.

Vote against the entrenched establishment.  Fresh conservative ideas, especially on fiscal reform, will "reset SF" from the past mismanagement and help move San Francisco forward!

Conservative Ideas's picture

bad timing for spending cuts?

Fraud, waste and abuse of our money must be sought out ands eliminated, before any focus can be made on "best use of tax dollars".

Government spending does not lift an economy.  The state's economy has suffered due to lack of private enterprise spending.

If we keep giving government workers more private sector money to distribute to "the needy", we all become dependant sooner or later.

buchsons's picture

Benefit plans

I agree with you that benefit plans need to be assessed and that guaranteed lifetime benefits should be eliminated.  What makes it worse is that when the economy tanks pension fund managers take greater risks.  This subjects the taxpayers who will be forced to support the pension recipients to a higher level of risk without fair compensation.

I further agree that people who seek supervisor positions do so for political aspirations more than money, but they do not deserve a livable wage unless the budget is balanced.  Giving them a $33K pay cut and allowing them to earn it back by balancing the budget without raising taxes will put many supervisors in a difficult financial position if they put either the taxpayers or the city in a worse financial position.

buchsons's picture

Two Year Budget and Efficiency

Interesting idea, but I don't need to see a breakdown of where my money goes, as much as I want proof of taxpayer value.  There are two dimensions of value.  The first is whether the expenditure is truly necessary.  The second is whether we are receiving the product and/or service at the lowest possible cost.

Having sold into the public sector, I believe that there is far too much unneeded overhead and infrastructure in government.  I further believe that the government is an awful procurer and pays far more than it needs for products and services. 

As an example, paying Muni drives union wages and pensions is bad enough, but mandating that they have the second highest pay rates in the nation is worse.

Phil Ting's picture

Taxpayer Value

I really like the idea of taxpayer value.  Currently, we have performance measures which are supposed to tell us if government is working but they don't seem to translate to customer satisfaction.  We need to identify real measures or methods of identifying customer satisfaction.  We also need to manage expectations.  Government is the only area where customers expect more even when they may be paying less.  We spend half of much per pupil on education as New York and New Jersey, yet our expectations are just as high and we're left wondering why class sizes are increasing and teachers are being laid off.  MUNI is an easy target but we heavily subsidize each MUNI rider at this point, yet if we discuss fare increases or cuts in bus lines or removing stops there is a huge uproar.  Somehow we need to find the connection between what people are paying and what they should expect in return.  Additionally, we do need to do a much better job of providing value and proving that we are providing value.

Rich's picture

TAX TAX TAX

Does anyone actually look at their pay stub and see how much money is taken out of your check every week?

 

NO MORE!

NKlein82's picture

I stand by what I said

A recent study by Beacon Economics showed that for every $1 million dollars spent on CALWorks, it resulted in $1.34 million in economic output.  The fact is even if social spending wasn't economically beneficial, it would still be a good to help the people of the city who are suffering.

friscodog's picture

iPhone app

The idea about having a tool which tells people what there taxes went is interesting.  It should not be limited just to a tax bill that specifies how the money was spent - I remember reading something a while ago that an app was being developed which would identify how much public works would cost.  For instance, triangulating your position, it would identify how much a fire hydrant cost or street sign.  This app would then help people better understand public expenditures...

buchsons's picture

Taxpayer value

I would accept service cuts if it would help get unions out of the picture.  Why shouldn't unions have to compete on price every 2-3 years against private sector non-union labor suppliers?  I don't even care where the labor comes from - it could come from overseas but let's force competition.

 

Also, city employees should be paid based on performance, not based on seniority.  In the private sector most jobs are base plus performance based bonus.  Consider a teacher compensation plan that pays a low base, but heavily rewards teachers whose students achieve higher marks, test scores and high school graduation rates.  For a Kindergarten teacher the rate at which students eventually graduate high school could be a  small part of their bonus structure, with the high school graduation rate becoming a greater component of compensation in higher grades.  That's just an example but there are many ways to pay for performance.

 

Elected officials should also be paid for performance.  Cut the supes' base pay to $60K and pay bonuses of up to an additional $60K based on the financial performance of the city.  As an example, if the budget is balanced without tax increases or borrowing, the supes can make the $100K they make today, and they can receive additional bonuses for improving the city's fiscal health.  Again, just an example but performance-based comp is the way to go for all city workers.

 

Lastly, vote yes on Prop B and drive up defined contributions into city pensions.  We also should index benefits based on the current value of the pension fund so there are no defined benefits, and start counting the value of pension funds more rationally.

Paid for by Phil Ting for Assembly 2012. FPPC ID# 1343137