San Francisco, CA — Mayor London N. Breed yesterday issued Budget Instructions to department heads to guide the budget process for Fiscal Years 2020-21 and 2021-22. Mayor Breed directed department heads to prioritize identifying funding to help people suffering on the City’s streets, and propose targeted efficiencies and reductions to their departmental budgets to address the deficit.

“We have a homelessness, mental health, and substance use crisis on our streets, and we all need to focus on funding services so that we can get people off the streets and into the care they desperately need,” said Mayor Breed. “We also have a responsibility to balance the budget, so I’ve instructed departments to come back to my office with budget proposals that address what is a significant two-year deficit.”

Budget Instructions are delivered every year in December, informed by the estimated the two-year deficit for the upcoming budget cycle, which is based upon the projected four-year deficit for long-term financial planning jointly projected by the Mayor’s Budget Office, the Controller, and the Budget and Legislative Analyst’s Office. The instructions inform departments how to prioritize their proposed budgets for the upcoming two-year budget process.

Mayor Breed announced that the City is projecting a budget shortfall of approximately $420 million over the upcoming two budget years, out of an annual general fund budget of $6 billion. The shortfall is the result of the rate of revenue growth slowing while costs are rising. The shortfall must be balanced by June 1^st, 2020, when the proposed budget is submitted to the Board of Supervisors. Budget proposals from departments are due on February 21^st, 2020. Following submission of the budget proposals, the Mayor’s Budget Office will evaluate the requests and develop the Mayor’s proposed balanced budget to submit to the Board.

Mayor Breed’s top priority for the coming year is to provide housing, shelter and services for people who are struggling on our streets. This includes the Mayor’s efforts to open 1,000 new shelter beds by the end of 2020 and expand the number of behavioral health beds and services. Mayor Breed also instructed department heads to prioritize funding for clean and safe streets, and healthy and vibrant neighborhoods, and to focus on being responsive to residents and supporting City workers who are trying to help people.

One of Mayor Breed’s priorities for the coming year is Mental Health SF, which was approved unanimously by the Board of Supervisors on December 10^th. Mental Health SF is an overhaul of San Francisco’s mental health system and guarantees mental health care to San Franciscans who lack insurance or who are experiencing homelessness, with a focus on delivering services to the 4,000 people who are homeless and suffering from both mental health and substance use disorder. The implementation of Mental Health SF is expected to cost approximately $100 million annually. Some elements of Mental Health SF may be funded in the FY 2020-21 and 2021-22 budgets, but the program will also largely require new revenue sources.

Mayor Breed and Board of Supervisors President Norman Yee have asked the Controller to convene a process to reform the City’s business tax, which could provide a new revenue stream for Mental Health SF. The City Administrator and the Capital Planning Committee are also looking at moving up a Public Health Bond for the November 2020 election to help pay for capital improvements associated with Mental Health SF.

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