Being Broke Doesn't Lessen San Francisco's Desire to Borrow Money

You might think that the city of San Francisco would be leery of taking on more debt, at a time when it faces multi-billion dollar unfunded pension liabilities and a $306 million hole in its budget for the upcoming fiscal year. In particular, you might think they'd be leery of borrowing to pay for things that most normal people would assume are paid for with tax revenues. Yet according to the San Francisco Chronicle, city voters are likely to pass a new $248 million bond in November to pay for, of all things, street repair.

The city apparently spent $29,000 to commission a poll on the bond issue, and found that the proportion of likely voters favoring it sits right on the two-thirds threshold needed to pass it. Of course, the most obvious question goes unasked in the article: how bad are San Francisco's finances if it can't even fund street repairs on a pay-as-you-go basis? For us, this is an ominous sign of either the depth of the city's troubles or its inability to prioritize spending properly. The article also fails to ask a less obvious question: given that the Fitch agency just downgraded the city's debt last month, what sort of appetite is the market likely to have for these bonds, and what sort of interest rates are city taxpayers facing to service the debt? Either way, one can only imagine how the people supporting this measure expect these bonds to be paid off. Of course, therein lies the problem with government in a city like San Francisco.