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Mayor—s proposed two-year budget tops $12 billion, prioritizes housing, homelessness and behavioral health
Summary
The mayor—s proposed two-year budget keeps the city largely at status quo while directing one-time ERAF funds and new investments toward affordable housing, homelessness services, behavioral health and nonprofit/small-business supports. The controller called revenue assumptions reasonable but warned of longer-term structural gaps.
San Francisco—s mayor delivered a two-year spending plan that keeps core operations running while steering a tranche of one-time windfall revenue and targeted new money to housing, homelessness services and behavioral health.
Kelly Kirkpatrick, the mayor—s budget director, told the Budget & Finance Committee that the city—s total budget is about $12 billion a year in the two budget years, split roughly 50/50 between general fund and non-general fund accounts. The mayor—s plan seeks to protect indispensable services while adding focused new investments: $1 billion in housing resources (including a proposed $600 million affordable housing bond), expanded homelessness services with a target to add shelter bed capacity and roughly $50 million over two years for behavioral-health expansions that include 100 new behavioral-health beds.
Kirkpatrick said the administration balanced the budget using a mix of one-time resources, departmental savings and updated revenue projections. Notable balancing items included more than $50 million of current-year departmental savings, a state offset related to in-home supportive services and revisions to projected business- and transfer-tax receipts. "These solutions allowed us to support negotiated labor increases," she said, while also preserving key one-time investments in capital and programmatic priorities.
The controller—s office, which issues a required revenue letter, backed the administration—s assumptions. Michelle Ehlersma said the tax-revenue assumptions are "reasonable" and consistent with moderating economic growth. Controller Ben Rosenfield and Ehlersma warned, however, that the city used roughly $437 million of prior-year fund balance across the two years as a one-time balancing source and that structural gaps remain in later years beyond the two-year window.
Both the mayor—s office and the controller signaled reliance on excess Educational Revenue Augmentation Fund (ERAF) receipts for discretionary spending. Kirkpatrick and the controller described plans to allocate a portion of ERAF across housing, homelessness and capital priorities; the mayor—s proposed budget would appropriate a portion of anticipated excess ERAF available in the coming year for housing production and preservation.
Why it matters: The package front-loads housing-related spending at a time when city leaders are seeking quick, visible results on neighborhood preservation and homelessness. The mayor also plans a $600 million housing bond to be considered separately by the board. The controller—s analysis provides cover for the near-term numbers but highlights the risk the city may face in years three to five if one-time sources are relied upon repeatedly.
What—s next: The committee pressed departments on revenue and staffing questions and asked the controller for a June update on May-June revenue trends. The board will consider ordinances and bond measures in coming board cycles; departmental hearings on the details will continue over multiple days.
