During his mostly cheery inauguration speech in January, Mayor Daniel Lurie shared some grim but unsurprising news.
City Hall’s finances are in the red. “Painful decisions” — as he put it — must be made.
Less than two months into his tenure, those words appear to have fallen flat with a significant swath of the city’s departments, which have been tasked with 15% reductions to fill an $840 million budget deficit — the largest in San Francisco’s history.
A whopping 22 city agencies submitted budget proposals to the mayor’s office that did not hit that benchmark. Some came close, while others proposed no cuts whatsoever. A handful — the sheriff’s, elections, and fire departments, along with the Asian Art Museum and public defender — are even asking for more money.
The proposals could portend a tug-of-war between the mayor’s office, led by an inexperienced politician urging fiscal responsibility, and the departments he oversees, which assert that they’re already working on threadbare budgets and can’t take any sizable cuts to staff or operations.
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‘There’s not a lot of fat left on the bone’
It isn’t uncommon for departments to shirk a mayor’s request for belt-tightening. But this time around, the sheer size of the deficit means that common bookkeeping strategies, like padding up the budget with reserves or unused funds from the previous year, won’t be enough to magically fill the hole.
“There’s not a lot of fat left on the bone,” a person familiar with the budget process said. “There isn’t some $800 million budget-balancing trick that will make it so the departments don’t need to make reductions.”
Ed Harrington, who led the city controller’s office from 1991 to 2008, said the city’s financial situation “appears to be dire,” and there is “less flexibility” than in previous years when it comes to pulling levers to balance the budget.
After receiving submissions from the city departments, Lurie will propose his budget in June. The Board of Supervisors will review the budget and vote on whether to approve it in July.
Documents from a January all-hands meeting with department heads show that Lurie laid out his intention to “eliminate $1 billion in overspending” in the next three years. However, he instructed departments to maintain core services and to refrain from proposing “politically untenable” cuts.
Immediately after taking office, Lurie announced a hiring slowdown. But, in keeping with his campaign promise to improve public safety and street conditions, that order exempted law enforcement and public health employees.
The mayor’s office declined to comment.
‘Truly discretionary expenses are nonexistent’
A handful of city departments referenced the 15% reduction request before explaining their need to retain their funding — or asking for more.
The Sheriff’s Department wants nearly $30 million more, which would bring its yearly support from the city’s general fund to $283 million. A spokesperson told The Standard the department needs more funding for staffing and to address a rising jail population. Its proposal mentions those requests, the mayor’s Hospitality Zone Task Force, and “much-needed” safety equipment and supplies.
Like the sheriff, the San Francisco Fire Department wants more funding: $3.8 million for employee pay. It argues that instituting the 15% cuts would mean removing seven fire engines or six truck companies in a year — or cutting 23 daily, 12-hour ambulances from the 911 emergency system.
“As always, we’re working with the mayor’s office collaboratively to meet the budget needs,” said an SFFD spokesperson.
The public defender is asking for an additional $370,312, which would bring its support from the city to $56.7 million. “Public defenders are already grossly underfunded compared to police, prosecutors, sheriffs and probation departments, whose ever-expanding budgets continue to significantly increase our already heavy caseloads,” Public Defender Mano Raju wrote in a statement.
Other departments aren’t asking for more funding but say they cannot make significant trims.
The city attorney’s office proposed cutting $60,000 (a 0.16% reduction) from its budget. “While we appreciate the City faces a substantial deficit, cutting our budget and freezing our hiring will only exacerbate it.” The office explained that its work generates “hundreds of millions of dollars in revenue” and protects the city from “billions” in liability.
Jen Kwart, a spokesperson for the city attorney’s office, also mentioned the White House as a reason for retaining funding, which, under its proposal, would amount to $37.1 million.
“We have not received new positions for our work defending our communities and billions of dollars of federal funding threatened by the Trump administration,” she wrote in a statement.
The San Francisco Police Department is in a similar boat. It said it would trim $53,811 (0.008%) from its budget, stating in its submission that “after parsing by Fund Source and by types of expenses, truly discretionary expenses are nonexistent. Further, ongoing structural budget constraints prevent the elimination of vacant positions to generate reductions.” Its financial support from the city would reach $673.7 million under its proposal. A spokesperson did not respond to a request for comment.
A portion of city departments did follow Lurie’s order to make cuts valued at 15%, including the Department of Emergency Management, human resources, the Department of Public Health, and Public Works.
Board President Rafael Mandelman said preserving public safety funding means the “larger potential sources of savings are not on the table.”
“That means you’re making harder choices in other departments,” he said. “And we need to have the budget be sustainable over a particularly difficult period of time.”