Mayor Daniel Lurie may shrink the city government in an effort to reduce San Francisco’s budget hole, newly obtained documents reveal.
In his first meeting with city department heads Jan. 9, the new mayor pledged to “eliminate $1 billion in overspending” in the next three years, warning that the fiscal discipline would be “challenging” and “probably even painful.”
Lurie suggested he’s going to address the city’s $876 million two-year budget hole by changing the city’s “structural deficit” — usually code for “cuts” — instead of relying on one-time funding supplements as former Mayor London Breed did.
“The era of one-time or Band-Aid solutions is over,” Lurie said at the meeting.
This glimpse at Lurie’s budget strategy — the major outlines of which won’t take shape for months — was described in meeting notes obtained by The Standard via a public records request.
Lurie’s handling of San Francisco’s ailing tax base will be one of his key tests in his first year as mayor. On the campaign trail, he was able to assuage fears from many corners and, on some issues, even managed to garner goodwill from opposing camps; for example, winning plaudits from both YIMBYs who want more development and neighborhood activists known for blocking housing construction.
The budget is a different beast: Some departments will win; some will lose.
In his directive to heads of departments — including the Municipal Transportation Agency, Public Works, and Public Health — the mayor said he wants to “eliminate our least effective programs.” But he cautioned against cuts that would anger constituents and warned department heads not to close offices used by the public, like customer service desks.
Alongside a well-publicized hiring slowdown, Lurie directed department heads to pause “any new contracts or programs” that have not been signed or implemented.
Business interests may already be on board, given their vested interest in restarting the city’s economy.
“Mayor Lurie is absolutely correct in focusing on the need for structural reforms that will have ongoing impact,” Adrian Covert, vice president of public policy at the Bay Area Council, said in a statement. “The devil’s always in the details, but San Francisco’s ailments need strong medicine. Actions like a hiring freeze and asking city department heads to identify their least effective programs for potential elimination are all good places to start.”
But Lurie may face opposition from nonprofits that depend on city funding to function. Their services run the gamut from afterschool programs for high schoolers to free assistance for seniors in Chinatown and the Mission.
The People’s Budget Coalition, an alliance of more than 150 such organizations, said Lurie’s austerity measures come at a bad time, as the policies of President Donald Trump are likely to barrage vulnerable communities.
“As the Trump administration increases threats to immigrants, immigrant workers are now more vulnerable than ever to wage theft and workplace abuses, as they fear speaking up,” said Joyce Lam, an organizer with the Chinese Progressive Association, which is part of the coalition. “As a city, there’s an urgent need to ensure that immigrant workers know their rights and can exercise those rights through in-language, culturally competent workers’ rights outreach, education, and support services.”
In its annual revenue letter, the city controller’s office noted that Breed relied “heavily on one-time sources to balance the budget.”
In other words, Lurie inherited a budget on a creaky foundation. It’s not dissimilar to another city budget, in 1988, when Mayor Art Agnos inherited a $172 million budget deficit from his predecessor, the late Dianne Feinstein.
Much like Lurie’s hiring freeze, Agnos instituted a pay-raise freeze. After-school programs, youth employment programs, and libraries all faced cuts. The electorate became outraged, and Agnos recalled it playing a factor in his electoral loss after his first term.
Lurie is handling things a bit differently. In his directives to department heads, he pushed them to maintain “core services” that people depend on. And it seems Lurie — or perhaps his transition adviser, former Controller Ben Rosenfield — is aware of history.
“Please do not submit proposals designed to be politically untenable,” Lurie advised department heads.
The Standard’s Gabriel Greschler contributed to this report.