“A crisis of this magnitude means we cannot avoid painful decisions, and I’m prepared to make them,” Lurie said when he announced his plan in May.
The Board of Supervisors must pass a balanced budget before the new fiscal year begins in July. This week, supervisors will begin their amendment process and hold hearings with the city departments affected by proposed cuts.
Meanwhile, San Francisco is steeling itself for a decline in federal funding under the Trump administration.
About $140 million in Federal Emergency Management Agency funding that the city used to shelter unhoused residents during the COVID-19 pandemic could be clawed back. President Trump has also threatened to pull money from sanctuary cities like San Francisco, and during a hearing in the city’s Budget and Appropriations Committee last week, Supervisor Connie Chan said officials are expecting cuts to Medicaid, which more than 17% of San Francisco residents rely on.
Chan said during the budget hearing that the city has “no good options,” citing the Trump administration’s threats.
This year, San Francisco received just under $1 billion in federal grants, according to the Bay Area-based think tank SPUR. The city’s total spending plan for the upcoming fiscal year is $15.9 billion.
San Francisco is also facing potentially costly litigation from Airbnb and Google, which are trying to recoup $145 million they claim they were forced to overpay in city taxes.
“Here’s the bottom line: We have to stop spending more than we can afford,” Lurie said in his May budget announcement. “The era of soaring city budgets and deteriorating street conditions is over.”
Labor groups have pushed back in force since Lurie made his proposal public, saying the city could have worked with their leaders to avoid layoffs and should instead be focused on retaining the tax revenue from Airbnb and Google.
In addition to the labor cuts, many grant-making departments are set to lose money, and about $100 million in grants and contracts have been sliced from the budget. The district attorney’s and public defender’s offices, along with public safety departments, would mostly maintain their funding.
The mayor’s office itself will have an increased budget in the coming years, though a spokesperson told KQED that was due to previously negotiated wage increases, not new positions.
KQED’s Juan Carlos Lara contributed to this report.
