In a press conference Friday, the mayor said $120 million in funding would be redirected from law enforcement agencies to instead be spent on addressing disparities in the Black community.
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"With this budget, we are listening to the community and prioritizing investments in the African American community around housing, mental health and wellness, workforce development, economic justice, education, advocacy and accountability," said Mayor Breed.
"We are hopeful that this increased awareness and commitment will make a genuine difference and remove barriers to progress, especially for justice-involved people who seek successful reentry," said San Francisco Sheriff Paul Miyamoto in a statement.
The city is also focused on police accountability and bias, getting rid of military-grade equipment and shifting the burden of the city's mental health and homeless crisis off of law enforcement.
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"It's not fair to ask our officers to do the work of mental health professionals, and it's not effective for those in crisis," said Breed.
VIDEO: When protesters cry 'defund the police,' what does it mean?
When protesters cry 'defund the police,' what does it mean?
WARNING: The video above contains graphic imagery.
The mayor also highlighted other changes in 2020-21 and 2021-22 budgets, designed to deal with a $1.5 billion shortfall amid the ongoing coronavirus pandemic.
"We had a lot of plans. What we didn't have plans for was the coronavirus - but it certainly had plans for us," Breed quipped.
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Approximately $93 million over the next two years will fund the city's COVID-19 response.
"This is a significant investment, but honestly it's not really a choice," she said. "Without a strong and sustained COVID response, our students won't return to school, people won't go back to work and our economy won't recover."
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The budget also includes an additional 1,500 units of supportive housing, as the pandemic has only made it harder for the city to respond to its homelessness crisis.
"It will help us as a city to meet the needs of the unsheltered, and our residents who are frustrated by the conditions they see every day in our neighborhoods."
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San Francisco Police Chief William Scott said in a written statement: "While the cuts are significant, they are cuts we can absorb and that will not diminish our ability to provide essential services."
But the Police Officer's Association says response times could suffer if the department can't hire new officers.
"It could impact our ability to respond to emergencies if we don't have the necessary staffing," said SF Police Officer's Association President Tony Montoya.
To overcome the substantial budget shortfall, the city is tapping $339 million in reserve funding. The mayor is also counting on a business tax measure to pass on the November ballot, which her office says would raise another $300 million in funding.
To save another $270 million, San Francisco is also asking police and firefighter unions to delay raises for two years. Mayor Breed said delaying raises will help the city avoid cutting services and laying off employees, as 180,000 San Franciscans are already unemployed.