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Mayor's office and city agencies flag major exposure from governor's May revise
Summary
City officials told the Board of Supervisors' Budget & Finance Committee that the governor's May revise proposes roughly $19.1 billion in statewide shortfalls and deep program cuts that could cost San Francisco tens of millions; HSA and Public Health estimated combined potential local impacts in the tens of millions if proposals pass.
Kate Howard of the mayor's budget office briefed the Budget & Finance Committee on the governor's May revise and outlined a set of proposals that, if enacted, would reduce state spending by about $12.4 billion and assume roughly $3.4 billion in federal funds. "The governor's May revise expects a $19,100,000,000 shortfall in the state's budget," Howard told supervisors, citing the administration's numbers.
Howard highlighted several specific proposals in the governor's outline: elimination of many childcare subsidies except preschool, a proposal to eliminate the CalWORKs program entirely and steep reductions to local mental-health realignment funding. "These proposals are only opening proposals at this point," she said, adding that staff expect negotiations to continue and that many items may be amended or removed.
Phil Arnold, deputy director for finance and administration at the Human Services Agency, described how some of those changes would affect city services. Arnold said the agency's preliminary projection under certain assumptions is roughly $38 million in additional local cost exposure. He walked the committee through likely program shifts if CalWORKs were eliminated, saying many families could migrate to general assistance. Arnold estimated direct aid costs from such a shift could exceed $16 million and administrative costs could add about $5.3 million that the city did not budget for.
Jim Suess of the Department of Public Health said the combined impact of the governor's January and May proposals could be about $56 million for San Francisco if fully enacted, with roughly $34 million tied to a proposed 58% reduction in mental health realignment. He also identified specific program-level hits, including cuts to the AIDS Drug Assistance Program and offender substance-abuse treatment funding.
Committee members pressed for clarity about planning assumptions. Howard said the city would likely use a more conservative planning estimate in the near term and that a $40 million net exposure was the figure staff considered more realistic for budget document assumptions, while acknowledging a much larger worst-case scenario if all proposals were adopted as written.
The committee asked staff to continue refining the multiyear outlook and to provide follow-up detail on which programs would bear the largest risk as state negotiations unfold. The hearing will continue to monitor legislative actions as they develop.
