Mayor Newsome urges swift action as city faces up to $576 million projected shortfall

Mayor Newsome told the San Francisco Board of Supervisors on Dec. 9 that the city faces a deepening budget crisis and urged the board to work with his office and city commissions to adopt midyear solutions.

The mayor said he had submitted recommendations to the controller that “set forth about $118,290,000, in midyear, solutions,” and that not all of that total represents program cuts: “roughly 40% of it is revenue,” he said. He also told the board that the city’s pessimistic projection for next year’s deficit had grown to “$576,000,000.”

Why it matters: Newsome framed the midyear package as a stopgap that must be coupled with more substantial planning for the next fiscal year. He said the city cannot borrow freely and is constrained by voter-approved limits on taxation, and therefore the city will need “new revenue” or program reductions and efficiencies to balance future budgets.

Board reaction and next steps: Several supervisors welcomed the mayor’s visit and pressed for a formal process for deliberation. Supervisor Daly asked whether the mayor planned to introduce his cuts as a supplemental appropriation; Newsome replied that he had sought a collaborative process and had formed working groups, but did not commit to filing a single supplemental appropriation the board would formally consider. The mayor said he had convened and planned six structured councils to help shape subsequent recommendations and that his budget director, Nani Coloretti, would provide more detailed lists shortly.

Specific program and process notes: Newsome said about $23 million of the midyear package came from revenue “that trailed from the previous fiscal year,” including payroll tax receipts. He said administrative and efficiency-focused reductions would be a major element of the midyear approach, while acknowledging that some direct program reductions could not be avoided. The mayor also said he rejected approximately $13.5 million in cuts recommended by the Department of Public Health after public hearings and discussion with supervisors.

Public and board engagement: Supervisors asked for the proposals to be presented to committees and made public; Supervisor McGoldrick invited the mayor to a follow-up finance committee meeting to examine the proposals in detail. Several supervisors said they would introduce or have introduced board vehicles to allow the public and the board to weigh in, and the mayor said his door remained open to such input.

Quotations: “We have to do things dramatically differently,” Newsome told the board, and he added that the goal of the midyear proposals was to “give the least impact possible” while addressing the current-year shortfall.

Outlook: The mayor and board set a near-term schedule of committee briefings and working groups to vet midyear proposals; the mayor said that the controller’s forthcoming report would be an important guide. Newsome warned that the midyear package was the easier part of the work and that the “difficult part” would be negotiating next year’s larger deficit.