SFHSS told to find 10% general-fund reductions as city budget guidance tightens

San Francisco Health Service System leaders told the Health Service Board that the mayor's budget instructions ask departments to identify a 10% reduction in general-fund spending for the FY2024-25 submission and a 5% contingency plan.

Iftikhar Hussain, SFHSS chief financial officer, said the department's general fund is roughly $13.9 million and the 10% target equates to about $430,000; the department was also asked for a contingency submission equivalent to an additional 5% reduction. Hussain said the administration expects departments to rely largely on managing vacancies to meet targets and to keep ongoing expense growth near CPI.

Commissioners pressed staff on the risks of across-the-board cuts to a department whose services differ from other general-fund programs. Commissioner Follansby and others pointed out SFHSS primarily provides health benefits to city employees, retirees and related bodies (city college, courts), so applying an identical percentage to every department may not account for mission-critical functions. Commissioner Zavansky urged continued advocacy that the cuts consider the department's uniqueness.

Hussain said the budget team will work with the mayor's office and the controller to surface hiring plans and to identify where vacancy-driven reductions can be anticipated; staff will return with more detailed hiring and contingency plans. Public commenters (Protect Our Benefits) urged the board to identify positions that cannot be cut without delaying member services.

Why it matters: The 10% general fund reduction target affects how SFHSS plans for staffing and member services and will inform the department's budget submission to the mayor in February and subsequent Board of Supervisors review in June.

Next steps: Staff will develop hiring plans and contingency proposals and report back in future board meetings.