San Francisco faces protests over budget cuts amid deficit

San Francisco officials are facing difficult decisions over which programs to prioritize amid a looming budget deficit.

Why it matters: The city has had fiscal challenges since its pandemic-driven downturn. In December, Mayor London Breed ordered midyear budget cuts of about $75 million before directing agencies to propose 10% spending cuts for the next fiscal year.

State of play: Budget officials told the Board of Supervisors in a January hearing that San Francisco is projected to face a $245 million deficit in the coming fiscal year, which starts in July, and a $555 million deficit in the following year.

• That figure could reach $1.4 billion by 2027 if expenses continue to outpace revenue, they noted.

The latest: Ahead of a budget hearing Wednesday, protesters gathered at City Hall with signs, bags of trash and multiple large roach art installations featuring phrases like "don't invest, we must infest."

• Organized by a coalition of over 40 community organizations, speakers at the rally argued that budget cuts would significantly impact essential services, including housing subsidies and emergency rental assistance.
• They called on the city to commit to fully funding these programs and demanded that it redirect existing funds from law enforcement to do so.

What they're saying: "Our families know about balancing budgets, having to make hard choices. But the choices are different for different parts of our city," Maria Zamudio, interim executive director of the Housing Rights Committee of San Francisco, said at the rally.

• "Some people are choosing between … different kinds of milk at the coffee shop, and our families are choosing whether they pay rent or food or medicine," Zamudio noted.
• "We hear over and over again … that the city sees us as important partners, and so we need them to show us that in their budget priorities," said Tramecia Garner, chair of the Supportive Housing Providers Network.

The big picture: Despite downtown recovery efforts , the city continues to struggle with a record-high office vacancy rate , which is contributing to a decline in property and business taxes. Meanwhile, salaries and benefits for city employees are expected to increase by nearly $600 million over the next four years.

• Jeff Cretan, a spokesperson for Breed, told Axios via email that no final decisions have been made, but "the reality is that with a significant deficit, there are going to be hard decisions."
• Breed has said her budget priorities are public safety, homelessness, mental health and economic vitality. Increasing police staffing remains a goal for her office.
• She proposed record spending for the 2023-24 fiscal year to fund homelessness efforts and the police department, among other programs, despite the city's $780 million deficit.

What's next: Breed will unveil her official budget proposal to the Board of Supervisors on June 1. The budget and appropriations committees will then hold hearings at which the public can give feedback.

• The board finalizes the budget in July before the mayor signs it.

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