San Francisco Has a Massive City Government and a Big Budget Deficit

At the end of last month Mayor Lurie proposed a new budget for the city of San Francisco. It came in just under $16 billion dollars. That included a bunch of cuts to try to eliminate a projected deficit of $782 million. One way to cut those funds is to cut back on city jobs.

Lurie wants to cut roughly $185 million in contracts and nonprofit spending over two years, though the specifics of those reductions were not immediately available. He has also proposed eliminating approximately 1,400 positions from the city’s job rolls, mostly vacancies and retirements. More than 100 of those cuts could come from layoffs.

Under Lurie’s proposal, the city’s total budget amounts to $15.9 billion in fiscal 2026 and $16.3 billion in fiscal 2027…

“Here’s the bottom line: We have to stop spending more than we can afford,” Lurie said. “The era of soaring city budgets and deteriorating street conditions is over.”

If you read that carefully then you noticed that nearly all of the job cuts Lurie proposed were vacancies or retirements. In other words, someone is leaving or a job is already vacant and the city just won’t hire someone for those jobs. Only about 100 currently filled positions would actually be cut. Nevertheless, the news of the cuts was treated like a crisis.

“I’m sick to my stomach,” one union official said. “140 people? That’s solvable. We can avoid that.”…

Kim Tavaglione, president of the San Francisco Labor Council, which represents most city workers, said layoffs shouldn’t be needed. She argued that alternatives to cuts are possible, saying tech titans such as Airbnb should drop their multimillion-dollar tax lawsuits against the city.

“We’re going to fight for every position that we can,” Tavaglione said. “The city is already short-staffed. There’s work that won’t get done.”

The idea that the city is short-staffed is, shall we say, debatable. In fact, San Francisco’s city government has grown much faster than its population over recent decades.

A recent analysis found that San Francisco has the most public employees in core functions of any U.S. metropolis, even after detangling its unusual status as both a city and county…

In 2005, the city employed 26,900 people, according to the Department of Human Resources. Twenty years later, it had 34,800, a 29% increase. During that time, the city’s population grew by 8%, from 780,000 in 2005 to 842,000 in 2025, according to the California Department of Finance. 

The mayor’s push to cut around 100 jobs would represent a thin slice of the city’s ballooning bureaucracy — just 0.29% of City Hall’s workforce. Lurie’s office, which also proposed slashing 1,000 unfilled roles, says the mayor is not focused on the number of employees but on prudent spending practices. 

“It is really about, ‘How do we not spend money we don’t have?’” Sophia Kittler, the mayor’s budget director, said.

But despite the city’s budget deficit and the size of the cuts being almost too small to mention, the city swung into action to save those union jobs.

One of the more contentious elements of this year’s City Hall budget was resolved early Thursday after a day’s worth of negotiations that ended at 2 a.m. 

Supervisors on the Budget and Appropriations Committee approved $15 million to prevent layoffs Mayor Daniel Lurie had proposed to plug a historic deficit of roughly $800 million. 

The money will restore funding for about 57 positions, according to the mayor’s office, leaving approximately 40 jobs still on the chopping block.

So the actual number of cut positions will be about 0.1% of the total workforce. No wonder the city is broke. San Francisco is the anti-DOGE. If the city were smarter it would cut another 1,000 jobs and set the savings aside to pay for their soon to be broke public transit system. But that’s clearly not on the agenda. The money to keep the trains and buses running will just magically appear from somewhere, I guess.