Lurie starts to undo Breed's budget fiasco
One of the less attractive gifts London Breed left for new SF Mayor. Daniel Lurie was a mammoth-sized ($800m!) budget deficit. SF's Briones Society's policy experts smartly analyze Lurie's first steps to get our northern neighborhor's finances back into the real world, and offer pointers to Mahan and SJ City Council.
Spending in FY26 will remain the same as it was in FY25 at $15.9 billion, before increasing to $16.3 billion in FY27. As required by law, the budget closes a projected two-year deficit of nearly $800 million. It does this through a combination of modest workforce reductions (1,300 unfilled positions will be eliminated and 40 current employees will be laid off), use of one-time funds (though the budget plan does shift away from this kind of accounting trickery next year), and deserved cuts to the nonprofit industrial complex.
Unfortunately, these measures are mere Band-Aids on a sucking chest wound. Even the most optimistic forecasts see recurring annual deficits of more than $1.5 billion starting in FY30. The unavoidable problem is the sheer size of San Francisco government, whose budget has increased more than 67 percent on an inflation-adjusted basis over the past 15 years despite the population remaining flat over that period. Much of that growth was driven by increases in the City workforce: San Francisco’s government employs 7,000 more people today than it did in 2011.
There are now approximately 4 public employees for every 100 residents, which would imply three-Michelin-star-level concierge service that is clearly not being delivered. In fact, many San Francisco neighborhoods have, out of frustration, established self-funded Community Benefit Districts to perform core, tie-your-shoelaces-type government functions like street cleaning.
The bottom line: On a per capita basis, San Francisco’s budget is the largest of any Consolidated City-County in America — by some estimates, three times larger than the next most profligate spender — yet we are consistently ranked as the worst-run city in the country.
Fortunately, it seems like we now have a mayor that gets it, even if he’s not willing to say so directly — at least, not yet: “This year was about rightsizing. Next year we’ll be looking at restructuring.”
We’ve previously written about what kind of restructuring is needed, but in light of recent developments it may be necessary to go even further. Consider, for example, the hysterical reaction of public sector unions to the proposition of even a few dozen job cuts at City Hall. What will happen when San Francisco finally musters the courage to do what must be done and cut thousands of positions?
There are plenty of reasons to believe that public sector unions are uniquely pernicious — FDR, for example, vehemently opposed the idea of collective bargaining for government employees, noting that the interests on the other side of the table from unions in the public context were the citizens’ — and perhaps unconstitutional.
While the Supreme Court appears to be inching towards that view, there’s no need to wait on the federal judiciary. In fact, the only laws that protect public sector union jobs in California are state laws. If our local representatives in the Assembly and Senate care more about the solvency of San Francisco than their reelection war chests, they’d be advocating for the repeal or limitation of those laws so that the worst offending government employees could be fired at will — just like, you know, the rest of us in the real world.
Read the whole thing here.