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Politics & Policy

San Francisco mayor guts city programs as $1B budget shortfall looms

Mayor London Breed signs legislation
Despite a deteriorating fiscal picture, Mayor London Breed signed a record-high budget of $14.6 billion in July 2023. | Source: Justin Katigbak/The Standard

In response to bleak budget forecasts, San Francisco Mayor London Breed is asking city departments to plan for lean times and putting a number of city programs on the chopping block.  

In a Dec. 1 letter to department heads, Breed wrote that the city is facing a massive budget deficit that could surpass $1 billion in the next five years if nothing is done. The letter follows an unusual October memo to departments asking them to propose midyear budget cuts of at least 3%

The instructions precede what promises to be a “challenging” process of doling out diminishing city funds to departments next year, Breed wrote. 

“My office has reviewed proposals to pause uninitiated programs, eliminate vacant positions, take advantage of new revenues, and to start scaling back programs we can no longer afford or have other sources of funding,” she said in the letter. 

Breed’s Dec. 1 memo included a spreadsheet detailing $75.3 million in savings in the next fiscal year, followed by $37.5 million and $35.5 million in the next two years, respectively. 

Line items on the chopping block included vacant positions in various departments and specific programs, some of which were added by the Board of Supervisors in the last budget cycle. The document recommended cutting $2 million for an Office of Reparations, $1 million from a planned expansion of a Nob Hill homeless navigation shelter, $500,000 for tenant improvement grants on Powell Street and numerous other small programs focused on everything from senior support and tech assistance for small businesses to community gardening and portable toilets. 

The reductions will “leave intact basic City services and priorities” for public safety, homelessness, behavioral health and the economy, Breed wrote in the memo. She is expected to issue formal budget instructions to departments this month that will eventually form a citywide budget proposal in May 2024. 

Despite bad omens for the city’s finances—the city is facing a “structural deficit” in which spending is projected to outpace revenue over the next several years—Breed signed off on a record-high budget of $14.6 billion in July. 

In the face of monster projected deficits, once estimated at $780 million over two years, the city balanced its budget for the current two-year cycle in part by relying on reserve funds and Covid-related federal reimbursements.

But federal funds are petering out, and the Controller’s Office has warned that business taxes and other sources of revenue are expected to remain below pre-pandemic levels.