San Francisco, CA — Mayor London N. Breed today issued Budget Instructions to department heads to guide the budget process for Fiscal Years 2021-22 and 2022-23. Mayor Breed directed department heads to prioritize identifying funding core City services that demonstrate meaningful and equitable outcomes and that will to support San Francisco’s recovery from COVID-19. Additionally, she directed departments to propose targeted efficiencies and reductions to their departmental budgets to address the deficit.

“The challenges facing our City in the months and years ahead are significant, and we have a lot of hard choices to make to get our City back on the road to recovery,” said Mayor Breed. “Closing this deficit will not be easy, and it’s going to require tough choices and real tradeoffs. While this pandemic will continue to slow our recovery, I know we can do the hard work to get this City moving forward.”

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 five-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 $653.2 million over the upcoming two budget years, out of an annual general fund budget of approximately $6 billion. The shortfall is the result of slower than expected revenue growth, costs for employee salaries and benefits, and additional costs to respond to COVID-19.

The Mayor directed City departments to continue to focus on top priorities like managing the COVID-19 pandemic, supporting homelessness and mental health investments, helping small businesses that have suffered due to the pandemic, and focusing on equitable outcomes to ensure that City investments effectively benefit everyone in San Francisco. To help meet these needs while also addressing the deficit, the Mayor directed departments to:

• Propose ongoing reductions equal to 7.5% of adjusted General Fund support, and an additional 2.5% contingency proposal should things get worse; and
• Prioritize core services and present clear tradeoffs when presenting proposed reductions.

Budget proposals from departments are due on February 22, 2021. 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 by June 1, 2021. At that point, the Board of Supervisors then considers the budget and must send a balanced budget back to the Mayor for signature by August 1, 2021.

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