San Francisco Mayor Breed orders budget cuts across city departments

SAN FRANCISCO -- In an effort to tackle a budget shortfall of more than $700 million, San Francisco Mayor London Breed on Thursday issued instructions to city department heads to make cuts to their budgets.

According to the mayor's office, over the next two years, San Francisco is projecting a budget shortfall of $728 million with a $200 million deficit in the first year and a $527 million deficit in the second year.

"The shortfall is the result of slowed revenue growth, specifically the City's largest tax revenues that include property and business tax, and loss of temporary federal COVID-19 funding," said the mayor's office.

San Francisco has an annual General Fund budget of $6.8 billion, according to the mayor's office.

Departments are being asked to consider reductions from their General Fund budgets of approximately five percent in the first year and eight percent in the next.

According to the mayor's office, the last time San Francisco projected a shortfall around this size was two years ago, after the pandemic hit.

Breed also directed department heads to prioritize filling vacant positions for core city services "that will support San Francisco's recovery."

"We know the challenges facing San Francisco are significant and we have a lot of work ahead of us to maintain the city's recovery efforts," the mayor said in a statement. "As we work to close the deficit, it will require tough choices and tradeoffs. The continued impacts brought by the pandemic certainly has slowed our recovery, but we are making progress."

Directors are being asked to prioritize things like public safety and staffing shortages as well as economic recovery downtown. She also wants to keep support for homelessness and mental health a priority.

Breed suggested finding more "efficient" ways to fund her initiatives and warned department heads to prepare for the outlook to worsen given the uncertain economic outlook.

Departments are due to submit their budgets in February, at which time the mayor will examine them and develop her proposed balanced budget to present to the Board of Supervisors in June.