San Francisco Mayor Daniel Lurie has lost the first round in a cost-cutting bout with his own government. It’s a battle he literally can’t lose — the city’s charter requires a balanced budget — but how he gets there will determine his effectiveness as mayor.
Since his campaign last year, the neophyte politician has been saying that tough cuts were needed. In an otherwise cheerful inaugural address Jan. 8, Lurie told supporters that the “largest budget deficit in the history of our city … requires us to make some painful decisions.” And in mid-February, when the city controller issued a report detailing the $840 million, two-year gap between projected spending and revenue, the mayor’s response hit familiar notes. Rightsizing the city’s finances “will require some extremely tough decisions,” he said, “but I know we are up to the challenge.”
So far, there is ample evidence that the City Family — the collection of entrenched bureaucrats who operate the vast and expensive municipal machinery — is failing to rise to the occasion. Worse, beyond a few banal and increasingly rote admonitions, Lurie hasn’t offered specific direction on what cuts are needed.
As The Standard’s Gabe Greschler reported last week, 22 city agencies have submitted budget proposals to the mayor that don’t meet the 15% expense-reduction target set by his predecessor, London Breed, and which Lurie affirmed. As I discovered when I dug into the documents behind Greschler’s investigation, neither the Board of Supervisors nor the mayor’s office itself are proposing to meet his targets, an ironic and head-scratching illustration of just how thorny this situation is.
In fairness to the mayor, the early stages of this multimonth clash are set up as an unfair fight. So far, Lurie is doing what all San Francisco mayors do: issuing high-level guidance and waiting patiently for departmental responses. What ensues is frequently performative: Departments publicly present proposals they know either won’t be accepted or are otherwise designed to embarrass a mayor who specifically, but perhaps disingenuously, asked them not to cut services that will affect voters.
For example — and this gem dates to late last year, when Breed still reigned — the San Francisco Municipal Transportation Agency suggested that its budget crisis may require it to cut cable car service. The transit agency has no intention of doing this, if for no other reason than the fact that a long-ago amendment to the city charter prohibits it. But the mere suggestion generated outraged headlines and sympathy for the humble civic servants trying to keep a cherished city service rolling.
More recently, the transit agency warned it might eliminate crossing guards, which it provides for public schools. Cue the howls from understandably alarmed parents — and the abandonment of the proposal.
Other corners of city government are just as agile in the performance art of public budget negotiation. The Department of Public Works raised the specter of uncleaned streets. The beloved department that runs the city’s parks lamented that it can no longer subsidize golf courses (the horror!) and might charge for parking in Golden Gate Park, a third-rail, war-against-drivers issue sure to annoy already combustible west-side residents.
Even the posh Fine Arts Museums of San Francisco knows how to play the sharp-elbowed game of budgeteering. It said cutting about $3 million from the $23 million it receives from the city’s general fund will require it to close on Tuesdays and fire security guards who are largely people of color. Fun fact about the nonprofit but city-supported FAMSF: As of late 2023, its foundations had a $151 million endowment fund, of which $16 million carry no restrictions, meaning it can use the money for whatever it likes. But apparently not to pay Black and brown security personnel amid a citywide budget crisis.
You might be wondering what Lurie has said about all this. The answer: precious little.
That’s because, despite his call for fresh ways of doing things in City Hall, he is following the typical city budgeting playbook. Rather than forcefully telling the departments what he wants, he sat back as they maneuvered and now will engage them in horse-trading that will culminate in yet more negotiations with the Board of Supervisors as spring turns to summer.
The mayor and his inexperienced team are outgunned here. They are up against large, seasoned finance departments across the city bureaucracy that have ample experience in rolling City Hall higher-ups. The mayoral budget director job traditionally hasn’t been a senior-level policy position. Instead, it has been seen as a stepping stone. Two of Breed’s budget directors, for example, are now in bigger roles in other departments.
As an example of how green the mayor’s team is, I obtained a presentation from a Feb. 27 meeting intended to brief top policy aides in what could be called “San Francisco Budget 101.” It contained overviews on topics like revenue sources, the budget-process timeline, and the nature of reserve funds. There was no mention of where the mayor’s head was on the many proposals that had rolled in by that point.
We know as much as we do about all this posturing because former Supervisor Sandra Lee Fewer passed an ordinance in 2019 mandating that all departments have public hearings and that their proposals be posted online. It’s not exactly scintillating reading, but the sausage-making of your city’s finances is on full display here.
That’s where you’ll also see that the Board of Supervisors itself has failed to meet the mayor’s requested cuts and instead is proposing to be $5 million over budget for the 2025-26 fiscal year. As for why the city’s Legislature doesn’t want to participate in the hardship, it whined that “the budget for the Board of Supervisors has remained flat in prior years,” implying it shouldn’t have to make cuts now. It also wants $2 million for a new “legislative management system.”
At least the board posted its budget, unlike the office of the mayor. In the ultimate irony, even the mayor’s relatively tiny governing unit — staffed with the equivalent of 48 full-time employees — wants to raise its budget by $500,000 in the current year (from a total of $10.9 million) and another $400,000 the next. It noted in a public hearing that “the mayor’s office is still in the process of reviewing budgets for additional savings opportunities.”
Never mind that the mayor very likely deserves a much bigger budget, and his office would be well-served by borrowing officials from other departments in a process known as “work ordering.” The optics of the mayor raising his expenditures while asking everyone else to cut theirs are horrible.
There is still time for Lurie to assert himself into the city budgeting process. And to stop getting slapped around by his own departments. But he’s going to have to take a stronger stand and demand far more painful cuts if he hopes to keep his promise to voters.