The San Francisco City Council convened on July 4, 2025, to discuss the upcoming budget for the next two fiscal years, with a focus on addressing significant financial challenges. The meeting began with an overview from the mayor's office, highlighting the need for budget adjustments due to a projected deficit of $799 million over the next two years. This figure marks an increase from the previous year's projection of $728 million.

Key discussions centered around the city's financial outlook, which indicates that expenditure growth is outpacing general fund revenues. As a result, departments have been instructed to reduce their general fund allocations by 10% for each fiscal year. Factors contributing to the deficit include high office vacancies, increased litigation costs, and a slower-than-expected recovery in the hospitality sector.

The planning department reported a reduction in its budget, including a $3 million decrease in fee revenue. The department's budget is heavily reliant on fee projections, which have been declining since 2018. The anticipated volume of building permits and cases is expected to be slightly lower than the previous year.

Personnel costs are projected to account for 63% of the budget in the upcoming year, with a focus on eliminating vacant positions to manage costs. The department plans to cut 10 vacant positions, while maintaining others to cover salary savings. The budget also emphasizes the importance of racial and social equity, with 23% of work programs expected to center on equity issues.

Commissioners expressed support for the budget plan while emphasizing the need to maintain focus on community planning and equity initiatives. The meeting concluded with a commitment to continue prioritizing racial and social equity training for staff and ensuring that translation services are enhanced to better serve diverse communities.

As the budget process continues, the council will meet with various commissions and submit the final budget to the mayor's office by February 21, 2026, with the proposed budget to be published in June. The board of supervisors will review the budget later in the summer.