Mayor Lurie Presents Responsible Budget Strengthening Social Safety Net In Response To Significant Federal Cuts, Advancing San Francisco's Economic Recovery

SAN FRANCISCO – Mayor Daniel Lurie today presented his $16.9 billion proposed budget for Fiscal Years (FY) 2026-2027 and 2027-2028, strengthening the city’s social safety net in the face of hundreds of millions of dollars of federal cuts to healthcare, while protecting core services that deliver safe, clean streets and advance San Francisco’s economic recovery. The budget closes a $642 million two-year deficit and reduces the city’s structural deficit by approximately $300 million, bringing down ongoing spending by hiring more strategically and making city services more effective and responsive.

Mayor Lurie’s proposed budget builds on the work he has done in his first year and a half in office to make San Francisco’s streets safer and cleaner, foster a broad and durable economic comeback, and protect the city’s social safety net. Crime was down nearly 30% in Mayor Lurie’s first year in office, and it continues to decrease in 2026. Unsheltered homelessness is at its lowest level in 15 years, as the administration has transformed the city’s homelessness and behavioral health response. Through Mayor Lurie’s Family Opportunity Agenda, San Francisco will be the first city in the country to ensure every family has access to childcare. San Francisco’s economic recovery is well underway, with Muni and BART ridership reaching post-pandemic highs, office vacancy rates continuing to drop, and downtown foot traffic increasing.

STRENGTHENING THE SAFETY NET AND SUPPORTING SAN FRANCISCO FAMILIES

As the city navigates revenue and service impacts from H.R. 1, the budget makes investments to help San Franciscans maintain healthcare and food assistance benefits and protect taxpayers from absorbing hundreds of millions of dollars in costs that the federal government will no longer reimburse. It also protects vital funding and services for San Francisco’s families and immigrant and LGBTQ+ communities.

Mayor Lurie’s budget:

• Invests $34 million from the city’s state and federal emergency reserve, established last year to prepare for cuts, to help San Franciscans stay enrolled in Medi-Cal and CalFresh benefits.
• Supports San Francisco’s immigrant community by maintaining funding levels for immigrant legal services and investing an additional $1.8 million in one-time funding to support immigrant families.
• Restores proposed cuts for LGBTQ+ community-based services.
• Invests in general civil legal services and bridges funding for case management to support households at risk of becoming homeless.
• Maintains funding for maternal and infant health.
• Continues investments through “Baby” Proposition C to expand access to early childhood education and support kids and educators.

Earlier this month, Mayor Lurie announced that San Francisco had reached its lowest level of unsheltered homelessness in 15 years. Building on the mayor’s continued work to transform the city’s homelessness and behavioral health response, the budget invests critical funding in getting people off the street, into shelter and treatment, and on the path to stability.

Mayor Lurie’s budget:

• Invests $120 million in keeping families and youth housed, including through new investments in homelessness prevention and legal services, case management, and added subsidies for families and seniors at risk of becoming homeless.
• Establishes a reserve with $100 million from Proposition C dollars to keep people housed as additional federal and state cuts loom.
• Adds $90 million for shelter and housing interventions for families and young people to get people into emergency housing.
• Expands funding to support the San Francisco Unified School District (SFUSD) with additional investments to stand up a new shelter for families experiencing homelessness, doubling previous SFUSD shelter capacity.
• Helps individuals in crisis connect to shelter and stability with $77 million in investments in drug treatment and mental health services.

PROTECTING CORE SERVICES AND ADVANCING ECONOMIC RECOVERY

As the city’s economy begins to recover, Mayor Lurie’s budget proposal prioritizes core city services that continue his work to improve public safety, deliver clean and safe streets, and strengthen the recovery.

Mayor Lurie’s budget:

• Invests $20 million for new public safety equipment for the San Francisco Police Department and San Francisco Fire Department, modernizing the city’s fleet of police cars and fire apparatus.
• Funds responsible contracts for San Francisco’s police officers and firefighters, strengthening public safety and supporting efforts to recruit the next generation of first responders.
• Invests $7 million in safe, PFAS-free fire gear and adds funding for cancer prevention screenings for San Francisco’s firefighters.
• Adds funding for a street violence intervention program to prevent and reduce violence among young people in partnership with the Department of Public Health and the Department of Children, Youth, and Their Families.
• Supports young people involved in the criminal justice system by backfilling lost state grant funding at the Juvenile Probation Department.
• Makes a significant $71 million investment in street resurfacing projects to fill potholes and keep San Francisco’s streets safe and clean.
• Funds the city’s first performance-based contract for health- and homelessness-related services for the RESET Center.
• Supports San Francisco artists and arts organizations, with arts grant funding on track to grow as the city’s economic recovery boosts hotel tax revenue.

MANAGING SPENDING RESPONSIBLY AND POSITIONING SAN FRANCISCO FOR THE FUTURE

As the city navigates a budget deficit that was on track to reach $1 billion in five years, the mayor’s budget takes steps to address the city’s long-term fiscal challenges. By slowing down spending, hiring strategically to prioritize roles that deliver and strengthen core services, and improving efficiency across departments to focus on outcomes, the budget puts San Francisco on more stable financial footing for the years ahead.

Mayor Lurie’s budget:

• Reduces the structural deficit by approximately $300 million, helping put the city on a more sustainable fiscal path and reducing the need for difficult decisions and painful cuts in future budget cycles.
• Reduces annual personnel spending by $130 million by slowing hiring and prioritizing filling roles that provide core services.
• Saves an additional $80 million through anticipated reorganization and attrition.
• Eliminates 550 total filled and vacant positions, including 127 filled positions eliminated earlier this year.
• Improves efficiency and delivers better services for residents through programs that focus on delivering results without increasing spending.

In developing this year’s budget, the Mayor’s Budget Office conducted extensive community engagement to understand the priorities of San Francisco’s residents and the community-based organizations. The office held more than 60 sessions open to the public, and Mayor’s Office staff participated in dozens of meetings with community organizations, labor unions, and advocacy organizations.

Below are Mayor Lurie’s full remarks as prepared for delivery:

If you visit one of San Francisco’s neighborhoods, you’ll see what makes our city so special. I was in North Beach the other day, and it was full of life: young people in Washington Square Park, tourists lining up for Italian pastries, police officers walking the beat, stopping to talk with small business owners. One officer told me that crime in the neighborhood has dropped so significantly that instead of rushing from crisis to crisis, they have more time to get to know the people they serve.

There is no doubt that our city is moving in the right direction, and we still have so much work left to do.

When families across San Francisco sit down for dinner at night, the rising cost of rent, healthcare, food, and gas has many asking whether they can afford to stay. In a region as wealthy as this one, in a moment where the world is looking to San Francisco to define the future, we cannot leave people behind—hard-working San Franciscans who make this city the vibrant, dynamic place we all know and love.

I have been given every opportunity in life, but I’ve committed my career to the fact that not everyone has. For most, this city feels more expensive and unaffordable than ever before.

Today, I am proud to submit a balanced budget that is fiscally responsible and strengthens our social safety net, so even in the face of federal cuts, San Franciscans know they can count on this city. This year’s budget closes a $642 million two-year deficit, moving our city forward for all San Franciscans.

Last July, just as our city was getting back on track, the federal government passed H.R. 1, making it harder for people across this country to access the critical healthcare and food assistance they depend on. 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.

Today, I am speaking to you from one of the city’s benefits centers in the Mission, where hundreds of San Franciscans come every day to get health benefits, access food assistance, and find work. 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.

We are dedicating $34 million to help San Franciscans stay on Medi-Cal and CalFresh. We are hiring case managers to help families navigate the new requirements. And we are committing $120 million to help families stay housed, so that one missed paycheck or emergency medical bill doesn’t lead to homelessness. As Washington signals that more cuts are coming, we are creating a new $100 million reserve so that we are prepared for what comes next.

So that parents like Annette, a single mom in the Bayview, know that we have their backs. Annette takes Muni to work. Her child goes to one of our SFUSD middle schools. Like a lot of working families, she has months when Medi-Cal and CalFresh help bridge the gap. When her daughter gets sick, she depends on our public health system for care.

Like so many of the parents I meet every day, Annette is determined. She isn’t asking for someone else to solve her problems. She’s asking for a city that supports working families. That is the city we are building.

And we will continue supporting working families and all San Franciscans by prioritizing the safety and well-being of our communities. This budget protects legal services for immigrant families. It continues critical support for LGBTQ+ and trans residents. These communities have shaped who we are as a city, and we will continue to invest in their safety, no matter what.

This budget also allocates funding for a modernized fleet of police cars and firetrucks to keep our city safe, a new back-up system that keeps 9-1-1 up and running during power outages, a major increase in street repaving and pothole repair, security improvements at public health facilities so our nurses, doctors, and social workers are safe while they care for others. And it reflects new, responsible labor agreements for our firefighters and police officers—keeping our city on stable financial footing while helping us recruit the next generation of first responders.

San Francisco is able to make these investments now, because 17 months ago, we stopped spending more than we can afford. When I came into office, City Hall was using one-time funds to cover a growing deficit and leaving the bill for someone else to pay. That wasn’t sustainable. And it wasn’t fair to the taxpayers and the people who depend on city services.

Under my administration, we will not fall back on temporary fixes that force deeper cuts year after year. Last year, in partnership with the Board of Supervisors, we began moving beyond that cycle.

This budget builds on that progress by reducing our long-term structural deficit by approximately $300 million. My administration has saved taxpayers $100 million and counting by slowing hiring and focusing on filling roles that provide core services. We reviewed contracts and grants and created the city’s first performance-based contract for health and homelessness services.

We didn’t tell departments to do more with less. We said: Focus on what matters most to our recovery—and deliver results.

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.

This administration has worked to minimize impacts for city workers while safeguarding San Francisco’s long-term financial health. And with a plan to save another $80 million through reorganization and attrition, we will deliver high-quality public services while living within our means.

In San Francisco, we are proving that common sense and discipline can drive a broad economic recovery.

Last year, we invested in public safety—and today crime continues to hit record lows. We transformed our homelessness response, and now, the number of people sleeping on our streets is the lowest it has been in 15 years. We showed off the best of our city with events like the Super Bowl LX, and soon, the World Cup. And as a result, tourism is now set to surpass 2019 levels. We stood up for our families, launching a major expansion of free and low-cost childcare so families can afford to live here.

And we continue to stick to our values. Last fall, when the federal government shutdown put food assistance at risk, we joined forces with philanthropic partners to get $18 million in food assistance out the door to 112,000 San Franciscans in just seven days.

Today’s budget carries this work forward—ensuring that in San Francisco, families can afford to live here, businesses can grow, and communities can thrive.

You can feel the momentum. Jobs are up. Businesses are opening. Muni ridership has reached post-pandemic highs.

To keep moving forward, our businesses need certainty. We cannot undermine this fragile recovery by pushing jobs out of the city.

No one outside San Francisco is coming to save us. We’re going to do it ourselves with the resources we have.

We’re going to do it by staying laser-focused on creating the conditions for a broad and durable recovery. That means rebuilding the ranks of our Police Department; ensuring Muni is safe, reliable, and affordable for generations to come; continuing to cut red tape and make it easier to start and grow a small business through PermitSF; and cleaning up a system that too often works for insiders and special interests.

My administration will continue to be accountable to you, the people of San Francisco.

You know your government is working for you when the bus shelter is clean and you feel safe on your way to work, or when it’s easy to get a permit for a neighborhood block party. I’ve seen firsthand how much pride our city workers take in making that happen: the librarians who help a child discover a love of reading, the firefighters and police officers who run toward danger, the crews who repair our Muni tunnels and keep our roads safe.

In the weeks ahead, I will partner with Board President Mandelman, Budget Chair Chan, and the entire Board of Supervisors to finalize this budget.

Last year, we stabilized the city’s finances. This year, in the face of new challenges, we are continuing to stand together as San Franciscans.

In our city, we step up. We solve problems. And we look out for one another.

San Francisco is a city on the rise, and we are not leaving anyone behind.

Thank you. Let’s go, San Francisco.