SAN FRANCISCO (Map, News) - The City is expected to sink $28 million of this year’s budget surplus into affordable housing needs under a controversial funding request that has created a rift between the Board of Supervisors and Mayor Gavin Newsom.

Last week, Newsom — who must submit a balanced city budget by June 1 — accused the Board of Supervisors of playing politics with The City’s financial health by requesting to spend a portion of this year’s projected $126.6 million surplus, which is left over from this year’s budget due to higher than projected revenues. Despite the surplus, city officials project they need to make $25.4 million in cuts to balance the budget for the upcoming fiscal year, which begins July 1.

The Board of Supervisors voted 7-4 on Tuesday to approve spending $28 million on affordable housing, a request introduced by Supervisor Chris Daly. The bulk of the money, $20 million, would pay for the acquisition, construction or rehabilitation of affordable housing for families, seniors and persons with disabilities.

Board of Supervisors President Aaron Peskin said the request was “sound fiscal policy.”

“We have a healthy reserve. We have superlative bond rating. We can afford to do this. Our fiscal people know that. Our controller knows that. The mayor knows that,” Peskin said.

Supervisor Ed Jew said the board should not approve the “eleventh hour” spending request and instead wait to make budget decisions once Newsom submits the city budget. “This preemptive strike on next year’s budget process does not bode well for a productive budget season,” Jew said.

Supervisor Bevan Dufty, however, said he “finds it really astounding that the mayor has been so dismissive of this effort.”

Supervisor Jake McGoldrick added to the criticism of Newsom. “Effective leadership is getting something done without seeking the headlines, without seeking the celebrity status. This body has had to be the leading portion of this city government for the last few years.”

Newsom spokesman Nathan Ballard said that “the mayor cautions against” the funding request since The City is facing a budget deficit and that “spending more money now may not be prudent.”

In response to the criticism of Newsom, Ballard said that “now is not the time for tit-for-tat. It’s time to hunker down and work together on submitting a balanced budget on June 1.”

The Board of Supervisors is expected to debate other surplus spending requests in the coming weeks totaling more than $20 million that would fund such things as salaries for more workers in the Recreation and Park Department and services for seniors and children.

jsabatini@examiner.com

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Mayor: Gavin Newsom

Supervisors: Jake McGoldrick - District 1; Michela Alioto-Pier – District 2; Aaron Peskin - District 3; Ed Jew - District 4; Ross Mirkarimi - District 5; Chris Daly – District 6; Sean Elsbernd - District 7; Bevan Dufty - District 8; Tom Ammiano - District 9; Sophie Maxwell - District 10; Gerardo Sandoval – District 11