The Facts

San Francisco’s March 31 budget update says the city’s projected two-year General Fund shortfall for FY 2026-27 and FY 2027-28 fell to $642.8 million, down $293.8 million from December, with stronger hotel, sales, transfer, and business tax collections, higher hospital revenue, and lower pension costs helping the outlook.

Lucy Hodgman at the San Francisco Chronicle reports that despite the improvement, City Hall is still preparing cuts and possible layoffs before the June 1 budget deadline.

The Context

Mayor Lurie’s budget proposal last year sought to close an $817.5 million deficit, eliminate more than 1,400 positions, mostly vacant, and set aside $400 million in reserve. As we wrote in our budget overview, San Francisco’s government is enormous even by national standards.

The GrowSF Take

A smaller deficit is welcome, but it does not change the core lesson: San Francisco’s problem is not just revenue volatility. It is a city government that has grown faster than results. Protect core services, demand measurable outcomes from contractors and departments, and keep cutting low-value bureaucracy.