San Francisco faces an unprecedented fiscal crisis as rising costs and stagnant revenues drive a growing structural deficit. With a projected $1.47 billion deficit by FY 2029–30, city leaders must now make tough choices, including cutting costs, redefining core services, improving budget management, and updating the city charter. The third article in our series looks at structural solutions that can help the city avoid future instability and ensure a sustainable fiscal future.

A city’s budget reflects its priorities and values — and choices made over the years. San Francisco’s $15.9 billion budget for 2024–25 is increasingly constrained, with only 18% of funds remaining truly discretionary due to legal mandates, voter-approved set-asides, and other restrictions. Key revenue sources have become more volatile since COVID, and rising costs leave limited flexibility to adapt to changing fiscal conditions. In this article, we take a deep dive into the city’s revenues and expenditures.

Meeting San Francisco’s many challenges, from accelerating housing production to revitalizing downtown and improving transportation operations, hinges on a lasting fix for the city’s structural budget deficit. As city leaders work to address a projected budget shortfall of $817 million for fiscal years 2025–2026 and a nearly $1 billion deficit for fiscal years 2027–2028, they must grapple with voter-approved spending mandates and a budget process that limits their options.

On May 1, Oakland’s interim mayor will roll out the city’s proposed 2025–2027 budget, which will look to address a $280 million projected deficit over the next two years. As Oakland navigates this moment of leadership transition, policymakers, administrators, employee unions, and community must work together to find creative ways to reduce spending and grow revenues. Although the structural budget deficit cannot be closed in this budget cycle, the city can pass a balanced budget that commits to sound financial practices, lays the foundation for reforms to Oakland’s governance structure, and builds the city’s capacity to grow economic prosperity for all Oaklanders.