Supervisor Connie Chan says no more budget cuts as S.F. faces down $600M deficit

San Francisco supervisor and budget chair Connie Chan said Monday she has made up her mind on this year’s coming belt-tightening, the final budget season with her at the helm: “It’s enough cuts.”

In a roundtable discussion with reporters in her City Hall office, Chan outlined her approach to the coming decisions about the city’s $16 billion budget, which is proposed by the mayor but must be approved by the Board of Supervisors.

That approval process will start soon: The mayor releases a proposed budget in early June, and it is approved by the beginning of July.

Cuts have been announced for months. More than 500 City Hall jobs, $40 million from the public health department, multiple youth health clinics, staff for Veterans Justice Court, a City Hall internship program — all are on the chopping block, among many other programs yet to be announced.

The city still has to plug a $643 million deficit it succeeded in shrinking somewhat by making cuts last year, though at the same time it is planning to spend an additional $100 million on police and firefighters.

While the District 1 supervisor said last year’s hard decisions need not be compounded, she pointed to one-time funding measures and a potentially lucrative, but uncertain and far-off, ballot measure to fill the gap.

Chan said Proposition D, which is also known as the “Overpaid CEO Act” and could bring in $250 to $300 million to city coffers starting in 2028 if it passes on June 2, could be used to help buoy the city in its deficit.

But that is far from certain: Prop. D is facing a well-funded campaign against it, and a counter measure, Proposition C, which would exempt smaller businesses from certain taxes and could reduce the city’s revenue by $30 to $40 million. It is not clear Prop. D will pass and, if it does, funds would not be available until 2028.

In the meantime, Chan said yesterday, the city could fill some gaps by using other funds, like the $120 million reserved from the city’s settlement with Airbnb.

Though Chan said she would “find it very difficult” to support further reduction, she is just one of 11 voting members on a Board of Supervisors that is sympathetic to the mayor and likely to vote to approve some measure of cuts.

Chan is running to succeed Rep. Nancy Pelosi in Congress, and looking to appeal to the city’s progressives and public-sector labor unions.

“Can we bridge right now [to 2028]? So that we’re not continuing to have these detrimental cuts that cut the city to the bone?” she said.

In March, the Board of Supervisors unanimously approved a motion outlining “guiding principles” for the mayor’s upcoming budget proposal.

Among them: “chop from the top” and cut vacant and occupied management positions, “leverage federal and state grants funding” to find additional dollars elsewhere, and “reduce administrative costs.” 

At Monday’s roundtable, which included five reporters, Supervisor Chan and one of her legislative aides, Chan said vacant positions could also be slashed, a strategy Lurie used last year to cut some 1,300 jobs.

Last year, addressing the city’s near-billion-dollar deficit meant severe budget cuts and, initially, about 100 proposed City Hall layoffs. The final day of a month-long process saw long deliberation that went well into the night. In the end, the board approved the budget, clawed back 57 jobs and restored certain programs. 

“Mayor Lurie is really focusing on reduction of city government … I can understand some of that approach,” Chan said. “But I think it has to be a balanced approach.”

The mayor’s office did not respond to requests for comment.

Lurie is working within tight margins: Most of San Francisco’s budget is set in stone.

“Enterprise departments,” like the airport and Port of San Francisco, earn some or most of their own revenue, operate quasi-independently, and last year accounted for about 57 percent of the city’s budget. On May 13, the budget committee will hear from many of those departments to go over their budgets individually. 

Another $4.5 billion dollars last year, or 28 percent, were allocated for specific programs, including federal programs or those approved by voters, like the city’s mandated spending on public libraries.

By the time the budget reaches the mayor, he can only allocate around $3 billion per year, about 19 percent of the total budget. 

The Board of Supervisors has control over even less: Last year, about $40 million — only 0.2 percent of the total budget

Still, that fraction of a percentage can be hard-fought territory between the board and the mayor. Those funds can make or break nonprofit organizations and social services.

The outcome of the June election, with its two funding measures, could significantly shape the budget’s final appearance as negotiations continue in June. Budget cuts from the Trump administration to healthcare, education, and food security could also put San Francisco at “significant fiscal risk,” Chan said.

Nevertheless, the city must adopt its budget by July. 

“I have never had a budget like this before,” Chan said.