With Layoffs Ahead, San Francisco Mayor Lurie Unveils $17 Billion City Budget

“Under my administration, we will not fall back on temporary fixes that force deeper cuts year after year,” Lurie said as he announced his proposal on Monday outside one of the city’s Human Services Agency offices, which could receive a major boost in the budget to address federal funding cuts. “I know these decisions have very real impacts. But if we fail to act now, our structural deficit will grow to $1 billion, and the difficult choices before us today will become even more painful and costly tomorrow.”

The budget now goes before the Board of Supervisors, who can request and negotiate changes. The final budget must be approved by Aug. 1.

Last December, the mayor directed departments to determine areas where spending could be reduced. The move came after the city controller projected that San Francisco would face a $936.6 million budget deficit over the next two years. That projection improved in May to around $600 million, in part due to improvements in areas like hotel revenue, as well as hiring freezes.

The city has already moved to lay off 127 public employees in an effort to reduce personnel spring by $100 million. Lurie’s budget calls for a total of 550 positions to be eliminated, including those already issued. Most of the remaining job cuts will be vacant positions, according to Sophia Kittler, the mayor’s budget director.

Still, nine filled positions could be cut this year, according to a spokesperson for the mayor’s office, pending approval from the Board of Supervisors. Future layoffs could also be on the table next year as the city looks to reduce salary and benefits spending by an additional $81.5 million.

“In practical terms, this means that city departments must develop a plan to reduce personnel costs by limiting management structures and span of control, improving workflow processes and exploring shared service models,” the budget reads.

But the cuts will not eliminate the structural deficit completely.

“Rising healthcare costs, cost of living adjustments and inflation on materials and supplies will continue to rise faster than projected revenues,” the budget proposal reads. “Future budgets will need to continue reductions and consolidations, pending overall fiscal health, local revenues and state and federal revenue outlook.”

While most departments are expected to be impacted by budget cuts, the mayor is proposing injecting more funding into programs that enroll residents in public benefits programs like CalFresh and MediCal, which have been targeted for cuts by the Trump administration.

Under the proposal, the city’s Human Services Agency would receive $34 million to hire more caseworkers in preparation for changes to benefits enrollments and work requirements implemented at the federal level.

“When people lose healthcare coverage, they turn to our public hospitals. And when the federal government cuts funding, those costs fall to the city of San Francisco — unless we help people keep the benefits they need,” Lurie said. “This budget strengthens the work happening right here, using funding from the emergency reserve we set up last year to respond to sweeping federal cuts.”

But advocates for city workers and services impacted by proposed cuts say Lurie’s administration should focus on raising more money.

“The underlying concern here is the strategy of making cuts to get us out of this deficit instead of raising revenue. And it’s just utterly concerning that they’re sticking to this no matter what,” said Anya Worley-Ziegmann, an organizer with the People’s Budget Coalition, a group of nonprofit organizations, unions and community advocates working to shape the budget.

The group is calling for the passage of the Overpaid CEO Tax, or Proposition D, which is on the June primary ballot. The proposition would increase taxes on the city’s largest corporations.

Lurie has come out against Proposition D and its opposing measure, Proposition C, saying that the city needs to focus on attracting more companies and their tax dollars to the city. If Proposition D does pass, it would raise the tax rate for certain businesses beginning in 2027, after the current budget is approved.

In addition to the city’s Human Services Agency, law enforcement also saw a boost in the mayor’s budget proposal, with $20 million earmarked for public safety equipment like a new fleet of police cars and firetrucks, along with a 14% pay increase over four years for both police officers and firefighters. It also includes $1.9 million to coordinate the city’s street violence reduction program, as well as targeted funds for the city’s new RESET Center, a police-run sobering center.

Lurie also wants to invest $71 million in street resurfacing projects to fill potholes.

On housing, the mayor’s plan puts $120 million toward homelessness prevention and legal services for families at risk of losing their housing and directs $90 million to shelter and other temporary housing, including some specifically for families, which saw the largest increase in homelessness in the city’s latest federal survey.

Groups following the mayor’s budget process closely expressed relief that the proposal did not come with a bloodbath of layoffs. But ongoing concerns about other cuts have kept many residents, nonprofit workers and city employees on edge.

“We are still fighting to keep our SFDPH community clinics open — Michael Baxter Larkin Street Youth Clinic, Cole Street Youth Clinic, and South East Mission Geriatric Clinic — because they are absolutely vital to the clients who receive services there, who are some of the city’s most vulnerable residents,” said SEIU 1021 San Francisco Vice President Kristin Hardy. “We want to ensure that nonprofits providing critical public services have the funding they need to retain the frontline workers who do that hard work every day.”