Office of Small Business outlines proposed cuts within OEWD; entertainment zones and refrigeration pilots flagged

The Office of Small Business director reported to the Small Business Commission on May 12, 2025, that the Office of Economic and Workforce Development (OEWD) has identified several rounds of proposed reductions and that department leaders were asked to find an additional $3,000,000 in ongoing cuts. Director Tang said OEWD previously submitted proposed reductions totaling approximately $7,200,000 and that the legacy business program faced a $193,000 cut identified in February; combined with mid‑year actions the program faces roughly $400,000 in reductions for the current year, although unspent carryforward funds have covered obligations to date.

"We are still undergoing that exercise between OEWD to figure out where we're going to identify the additional $3,000,000 in cuts," Director Tang said, and she told commissioners the mayor's proposed budget would be released in early June and proceed to the Board of Supervisors for hearings.

The director clarified that the current request for an additional $3,000,000 is for OEWD as a whole and not solely the Office of Small Business. She stated the city is seeking structural budget reductions (ongoing savings) rather than one‑time cuts and that the mayor’s proposed budget would be released in early June with final adoption later in the summer.

Commissioners asked about prior budget totals and timelines. Tang said the Office of Small Business’s budget is roughly $3.03 million in general‑fund support. Commissioners also raised programmatic questions: Vice President Czajunas requested that the commission review the six‑month report on the Tenderloin retail business closure policy prepared for the Board of Supervisors because that policy affects small retailers; Czajunas also asked that the Department of the Environment present its refrigeration‑replacement pilot to the commission so small businesses can plan for forthcoming refrigerant and equipment regulations.

The director noted the city has seen strong interest in creating entertainment zones and activating streets to support small business foot traffic. Staff plans to bring a presentation from OEWD on entertainment zones at a future meeting, and commissioners discussed equity concerns about how entertainment‑zone allowances (for example, open‑container permissions for on‑premise businesses) may affect retail businesses that do not receive comparable flexibilities.

Commissioner discussion also touched on state‑level employment rules that have complicated long‑standing small business practices—particularly chair‑rental and commission payment structures in personal‑service businesses such as salons and barbershops—and on opportunities for dual‑use retail models (for example, mixed retail/service spaces). Commissioners suggested the commission could examine how local permitting and city programs could better support multi‑use models and equitable access to permits and grants.

Why it matters: OEWD and the Office of Small Business administer programs that provide technical assistance, storefront and ADA grants, and other supports. Proposed reductions could shrink contract funding for community‑based organizations and program services at a time when small businesses are reporting ongoing COVID‑era loan costs and rising operating pressures. Commissioners emphasized wanting more information on program metrics and on the timing of budget decisions so stakeholders can participate in add‑back advocacy and planning.

Clarifying details from the meeting: OEWD identified roughly $7.2 million in proposed reductions submitted in February; the legacy business program was cited as having an identified $193,000 reduction in that initial submission and total cuts approaching $400,000 for the current year when including mid‑year adjustments. Director Tang stated the mayor’s proposed budget would be released in early June, with Board of Supervisors hearings to follow; the fiscal year begins July 1 and departments typically adopt final budgets in August. The Office of Small Business’s annual budget was reported as roughly $3.03 million in general‑fund support.

The commission requested follow‑up briefings on the Tenderloin retail business closure policy report, the OEWD entertainment‑zone presentation, and the Department of the Environment’s refrigeration pilot for retail businesses.