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San Francisco DPH outlines budget cuts: 185 vacant positions given up, $9.6M in CBO reductions this year and $17M next fiscal year
Summary
Director Grant Tsai told the Health Commission that DPH will give up about 185 vacant positions and reassign 24 staff while pursuing roughly $500 million in new medical revenue over two years and identifying $9.6 million in CBO reductions for 2025–26 plus $17 million in potential cuts beginning July 2026.
Director Grant Tsai delivered the department's budget briefing on June 16, telling the San Francisco Health Commission that DPH is trying to protect direct care while making difficult expenditure reductions.
Tsai said the department is pursuing two main principles: preserve services and direct care where possible, and prioritize workforce support. To balance the budget, he said DPH will “give up about 200 positions” (later clarified in discussion), pursue increased medical revenue and make targeted reductions.
Numbers cited in the briefing and follow-up discussion included:
- Positions and staffing: Tsai said DPH will give up about 185 full‑time equivalent vacant positions and will reassign 24 staff, a move the department expects to avoid layoffs. - Revenue commitments: The budget assumes roughly $500 million in new medical revenue over two years, contingent on meeting quality and claiming targets. - Expenditure reductions: The department committed to roughly $60 million in expenditure reductions overall; part of those reductions include administrative efficiencies and position reductions. - CBO reductions: Tsai said the department identified $9.6 million of community‑based organization (CBO) contract reductions to take effect in the 2025–26 year and signaled an additional $17 million in CBO reductions that could begin in July 2026; the department plans a six‑month stakeholder engagement before implementing the larger cuts.
“As we go through these various presentations at commission, you get to see glimpses of some very, very inspiring and exciting things that our team does every single day,” Tsai told commissioners before outlining the balance of cuts and investments. He emphasized that the identified $9.6 million for 2025–26 has been communicated to the CBOs affected, while the $17 million in additional reductions was being planned through a stakeholder process given that those cuts would start in mid‑2026.
Commissioner Chao pressed for clarity on whether CBOs had ‘‘agreed’’ to the reductions; Tsai replied, “I wouldn't say agreed to. I don't think they would agree with that. The total amount we had to reduce for this coming year … was $9,600,000. I meant to say every 1 of the CBOs that is getting a contract reduction … has been notified.”
Tsai and commissioners also discussed tradeoffs tied to Medi‑Cal revenue opportunities and what the department will prioritize if planned state or federal revenues fluctuate. He said the department expects difficult stakeholder conversations and that some reductions will not begin until July 2026 to allow a transition period.
Ending: Tsai said the department is actively engaging labor, CBO partners, the Board of Supervisors and other stakeholders and framed the choices as an effort to preserve services without layoffs.
