San Francisco’s budget is a step in the right direction, but not far enough

On Thursday night, the Board of Supervisors largely approved Mayor Lurie’s two-year budget. This year’s process marks a shift toward fiscal discipline and a renewed focus on core services. In recent years, San Franciscans have seen unchecked growth in city hiring and an explosion in contracts with outside organizations. That era is ending, but more work remains to make lasting changes.

The Facts

Mayor Lurie’s priorities remain mostly intact in the final budget passed by the Board. About 1,400 vacant city jobs are being eliminated, though the Board restored funding for about 50 of the 100 proposed layoffs, favoring city jobs over third-party contracts.

The Board restored $42.4 million of cuts across various categories, including $26.2 million for nonprofit contracts after the Mayor cut $185 million, via what's known as "add-backs." This is a slight drop from last cycle, where the Supervisors added back $50.8 million. The funds don't just add to the budget, though – the Board first has to make extra cuts to the Mayor’s budget to keep the books balanced.

The Context

San Francisco faces an $817 million deficit in FY 2025–26 and nearly $1 billion in FY 2027–28—the largest projected shortfalls in city history. And that’s without accounting for possible cuts in state and federal aid. From 2020 to 2024, the city used one-time federal pandemic relief to plug budget holes. Those funds are now gone, and tax revenues haven’t bounced back as hoped.

The GrowSF Take

Our city budget has surged by 54% since 2012 (inflation-adjusted) – adding $5.5B extra dollars– and city hall staffing has risen 27%. We have to get our spending back in line with our city’s size and core services.

We think this budget was a step in the right direction, but we also think it doesn't go far enough. The city may face years of sluggish economic growth and lagging tax revenues, so taking a cautious approach instead of aggressively making deeper and more systemic reforms may miss a narrow window of political viability.

Still, the budget does well to not cut police, street cleaning, or the District Attorney's office. The City still lags in cleanliness and public disorder, and tax revenues will stay depressed until we get those issues fixed.