San Francisco's financial squeeze

Beset by Proposition 13 and its revenue-cutting kin -- as well as the likelihood of a reduction in state and federal assistance -- San Francisco is facing serious financial problems.

Between now and July $: (when the city's new fiscal year begins), San Francisco must find at least $126 million in either new revenues or spending cuts in order to balance its budget as required by law. This figure amounts to about 21 percent of current projected revenues, a considerable portion of City Hall's source of supply.

For Mayor Dianne Feinstein, elected to her first full term less than five months ago, this represents a major test of administrative, legal, and political skills. In guiding San Francisco through the shoals that have damaged such cities as New York and Cleveland, she must convince organized labor, the business community, and individual San Franciscans that cutting services and boosting some taxes and fees is good for them.

Approved by voters in 1978, Prop. $: slashed property taxes by more than half throughout California. State government was able to use massive surpluses to "bail out" local communities, but that temporary source of income has all but dried up. Meanwhile, Californians last year voted to hold all increases in government spending here to changes in population or the cost of living.

San Francisco sits in the only California county that has lost population over the past decade so it will be hit especially hard by this measure (which takes effect July 1). Another belt-tightening initiative -- one that would halve state income taxes -- will be on the June ballot, and polls indicate it probably will pass. This could mean further cuts in state aid to cities and towns.

San francisco also stands to lose from budget-balancing efforts at the federal level, especially if general revenue sharing is cut back as President Carter now wants. Also, since revenue-sharing payments are based in part on local tax efforts, Prop. 13 and its ilk are expected to mean further cutbacks in this key form of federal aid.

Mayor Feinstein spent last week in washington lobby ing against federal budget cuts that would cause cities "massive and severe problems." Since she is President Carter's re-election chairman for northern California, this was not a politically palatable task.

At this point, it appears that a major portion of San Francisco's deficit will be made up by a doubling of public transit fares from 25 cents to 50 cents, with cable-car tickets jumping to $1.00. In return for labor support of this measure, Mayor Feinstein has pledged not to lay off any of the city's 21,000 employees.

Because of a court order, San Francisco could not re- duce the number of police in any case, but the financial crunch may force closer scrutiny of public-safety salaries (which, along with public transportation, make up half the city's budget). The Urban Institute (a Washington research organization) recently reported that San Francisco's public-employee compensation rates are among the very highest in the country, 16.3 percent above the national average.

Total annual wages and benefits for a police officer with five years of experience tops $29,000 in San Francisco. The San Francisco Chamber of Commerce has agreed to a boost in the city's payroll and gross-receipts taxes, as well as hotel and parking levys. But these proposed sources of new revenue are legally questionable.

Under Prop. 13, new levy must be approved by a twothirds vote of the electorate. The city is hoping for an early court ruling that these are simply extensions of existing revenue sources and not new taxes. It is doubtful, given the current public mood, that two-thirds of voting San Franciscans would approve these increases should they have to go on the ballot in June.

Increasing bus and trolley fares will bring San Francisco about $42 million of the needed $126 million, city officials estimate. Thus, with little more than three months to go, the city is only a third of the way toward its balanced budget goal.