SAN FRANCISCO (Map, News) - Labor unions representing city workers are being asked to give money in the form of benefits and/or salary increases to help resolve the projected budget deficit for the next fiscal year, but at least one of the politically powerful groups says try something else.

San Francisco faces a $338 million projected budget deficit for the fiscal year, that begins July 1. The Mayor’s Office has pointed to the economic downturn, which reduces revenues coming from the state and federal levels, as the primary factor to the ballooning budget shortfall. The Mayor’s Office also says the required overtime spending by the Sheriff’s Department and large contracts negotiated last year with the police and fire unions are contributing to the projected deficit.

To date, Mayor Gavin Newsom, who is considering a run for governor in 2010, has eliminated 301 city jobs from a payroll of roughly 27,000 — mainly through attrition. He has also moved to cap overtime and directed departments to limit business travel and expenses for employees. The mayor cut $18.1 million in services and programs, and called on departments to slash budgets by 21 percent as news from Sacramento grew increasingly bleak.

Mayoral spokesman Joe Arellano said Friday that Newsom was trying to reduce the amount of layoffs and any potential loss of services by working with the unions that have contracts with The City. Newsom must deliver a balanced budget to the Board of Supervisors by June 1.

“We hope to work with labor to achieve some [memorandum of understanding]-related savings,” Arellano said.

Gary Delagnes, president of the San Francisco Police Officers Association, said he has received calls from the Mayor’s Office wanting to discuss giving back 3 percent of their contract. The union has accepted some concessions in previous fiscal crises.

Last year, the union negotiated a four-year deal netting officers a 23 percent raise during the length of the contract, but what the union might give back is not necessarily wages, but perhaps may accept “furlough days,” he said.

“We didn’t work five months on a contract to give something back,” Delagnes said, noting the concessions police made, such as cutting down on the amount of paid time officers could accumulate toward the end of their careers. “We don’t have any intention of reopening the contract.”

Firefighters union President John Hanley said the union would come back to the table just as they have in the past. “It’s part of doing business. You have good years and bad years,” Hanley said. Last year the firefighters union, which represents 1,800 firefighters and paramedics, negotiated two 4 percent cost-of-living increases for the next two years, he added. “During the years when things aren’t that great, we’re here to help.”

Supervisor Tom Ammiano said during a budget year such as the this one, “everything is on the table,” noting that such a maneuver was not “unprecedented.” “MOUs are pretty sacrosanct. It would take some doing,” he said.

dsmith@examiner.com