San Francisco DPH outlines budget cuts and aims to avoid layoffs

In a recent meeting, the San Francisco Department of Public Health (DPH) provided a comprehensive update on its budget for the upcoming fiscal years, highlighting both challenges and strategic decisions aimed at preserving essential services for the community.

The budget discussion revealed a difficult financial landscape, with DPH facing a significant budget deficit. Director Tsai emphasized two guiding principles: the commitment to maintain direct care services and the prioritization of workforce support. Notably, while the department will eliminate approximately 200 positions, it has assured that there will be no layoffs, a crucial point for staff morale and community service continuity.

A key aspect of the budget is the anticipated increase in revenue, with DPH aiming to secure around half a billion dollars in new medical revenue over the next two years. This revenue is contingent on meeting specific quality improvement measures to maximize Medi-Cal payments from the state. The director underscored that the more revenue generated, the better the department can sustain its services.

However, the budget also includes a $60 million reduction in expenditures, with $31 million of that impacting community-based organizations (CBOs). This reduction will be phased in, with $9.6 million identified for the first year. The department has committed to a six-month stakeholder engagement process to discuss the additional $17 million in cuts slated for July 2026, acknowledging the challenges ahead in navigating these discussions with community partners.

Despite the budget constraints, the DPH is also planning investments in expanding treatment capacity within the behavioral health system, which will include hiring more civil service workers and increasing available treatment beds. This initiative aims to enhance support for mental health services, a critical need in the community.

In conclusion, while the DPH faces tough decisions in the coming years, its commitment to preserving services and engaging with community stakeholders remains a priority. The department is actively working to balance fiscal responsibility with the essential health needs of San Francisco residents, ensuring that vital public health services continue to thrive amidst financial challenges.