News Releases
The latest news and announcements from Mayor London N. Breed

San Francisco Projects Two-Year Budget Surplus for First Time in Over 20 Years

Surplus results from a mix of revenue improvements, record returns in the City pension system, and responsible budgeting decisions over the last two budgets

San Francisco, CA — Mayor London N. Breed today issued Budget Instructions to department heads to guide the budget process for Fiscal Years 2022-23 and 2023-24. For the first time since 1998, San Francisco is projecting a surplus for the next two years. This surplus is the result of a mix of revenue improvements, record returns in the City pension system, and efforts to constrain major cost growth over the last two budgets during the pandemic.

In an effort to continue the budgeting decisions that have helped the City avoid a deficit for the first time in twenty years, the Mayor asked departments to get “back to basics” and focus on better service delivery. The Departments are not being asked to make any proposed cuts, but instead to reprioritize existing funding towards programs and services that will deliver results and meet the top priorities of the City. These priorities, on top of continuing the historic recent investments in homelessness, mental health, and anti-poverty programs like the Dreamkeeper Initiative, include:

  • Restoring the vibrancy of the City, including improving public safety and street conditions;
  • Focusing on economic recovery;
  • Delivering on accountability and equity in city spending.

“Over the last two years, while we’ve invested heavily in key priorities impacting this City like our pandemic response, homelessness, and mental health, we’ve also made smart budgeting decisions, and this surplus is a result of that work,” said Mayor Breed. “We have an opportunity with this surplus to build on what we’ve been creating over the last two years – to move forward, not backwards, and to continue to invest in the programs and ideas that are making a real difference in people’s lives. We also need to continue down the path of making smart, long-term decisions about delivering services for the people of this City in the best way possible.”

Budget Instructions are delivered every year in December, informed by the estimated two-year projection for the upcoming budget cycle, which is based upon the four-year financial forecast for long-term 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 surplus of $108 million over the upcoming two budget years, out of an annual general fund budget of approximately $6 billion. The surplus is the result of:

  • Stronger Revenues, including local taxes like property tax and transfer tax, and federal funding through FEMA reimbursements and the American Rescue Plan
  • Record Returns in the City Pension System, which help reduce the City obligations over the next four-year period and beyond
  • Constraining Cost Growth, including focusing on one-time investments during the difficult budgets of the pandemic to prevent long-term obligations

San Francisco still has a projected deficit in years three and four of the long-term financial projection. 

Budget proposals from departments are due on February 22, 2022. 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, 2022. 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, 2022.