Federal cuts threaten to increase SF budget deficit to $2B, mayor warns

SAN FRANCISCO (KGO) -- San Francisco's projected budget deficit could double in the coming months, worsening an already dire financial outlook for the city.

The city's current budget estimate puts the deficit at $820 million, but in an interview with The San Francisco Standard, Mayor Daniel Lurie said the figure could rise to nearly $2 billion. The increase reflects uncertainty over potential federal funding cuts as the Trump administration threatens to strip funding for healthcare, transportation, education and more.

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A spokesperson for the mayor told ABC7 News these estimates are based on the assumption that the city will no longer be able to rely on one-time funds that helped supplement shortfalls in previous years, saying Lurie is rethinking potential risks involving all federal dollars San Francisco typically receives.

"This is more than just marginal fixes," said San Francisco Supervisor Matt Dorsey, who serves as vice chair of the city's Budget Committee. "There's going to have to be some structural changes to how government is working."

Dorsey emphasized that while no final decisions have been made, painful choices are likely ahead.

"It's going to be you're saying no to a lot of worthy programs," Dorsey said. "But unfortunately, that's the situation we're in, and unfortunately, it could get much worse."

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City departments have already been asked to identify 15% in potential cuts from their budgets. Public safety is one area Dorsey believes should be spared.

"I want to make sure that we're prioritizing public safety," he said. "Right now, I would say we can't afford to continue having that understaffed police department."

ABC7 News Insider Phil Matier noted that San Francisco's fiscal troubles aren't unique. Cities across California, along with the state itself, are facing budget uncertainty-compounded by unpredictable signals from former President Donald Trump's campaign and policy proposals.

"Everything is sort of up in the air, largely in part to Donald Trump and his on-again, off-again tariffs," Matier said. "Whether it's tariffs or cutting funding or threats, this one, that one back, it's impossible to figure out how much money you're going to spend if you don't know how much you're going to be getting in."

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And with fewer dollars available, Matier said elected leaders may face political fallout.

"People are going to be angry. The question is, are they going to be angry at the mayor, or are they going to be angry at Washington," he said.

Mayor Lurie is expected to present his full budget proposal in June.