San Francisco Closed a $642 Million Deficit by Deleting Jobs Nobody Was Filling

San Francisco is not unusual.▸ The Pew Charitable Trusts counted at least 20 of the nation's 25 most populous cities reporting budget gaps for fiscal year 2026, driven by the same forces everywhere: pandemic aid gone, costs still rising, and now federal cuts landing on top. What makes San Francisco worth reading closely is that it shows its work — a mayor's budget office, an independently elected controller, and the Board of Supervisors' own fiscal analyst publish a joint deficit forecast twice a year, in the same document, with the same numbers. That makes it unusually hard to hide how a deficit actually gets "closed."

Every March and December, the Controller's Office, the Mayor's Budget Director, and the Board of Supervisors' Budget & Legislative Analyst jointly sign a forecast of the General Fund's shortfall, required under a 2009 city charter amendment.▸ The December 2025 edition of that Joint Report put the two-year shortfall the coming budget would have to close at $936.6 million, and projected it would keep growing to $1,168.5 million by FY2029-30. The March 2026 update — stronger tax receipts, slower hiring, lower retirement contributions — cut that estimate by $293.8 million, to $642.8 million for the two years the City is legally required to balance.

The first two bars — $168.5 million and $474.3 million — are the two years this budget had to balance; together they are the $642.8 million headline.▸ The last two are the same three offices telling Congress, the Board, and each other what happens if nothing else changes: the annual gap keeps widening to $741.7 million, then $1,088.6 million, by the end of the decade. Closing this year's two-year window did not touch that trajectory much — the Mayor's Proposed Budget Book itself says the reductions in this budget cut the five-year structural gap by "approximately $300 million," out of a shortfall that was $1 billion and is still $1.09 billion.

The $16.9 billion FY2026-27 and $17.2 billion FY2027-28 budget closed most of the $642.8 million gap without the mass layoffs other big cities are making — the budget book states the two-year plan "eliminated more than 550 vacant positions," on top of $100 million in personnel spending trimmed through "position deletion, labor contract negotiations, reassignments, and some reductions in workforce."▸ Deleting a line that was never filled costs no one their job, and it reads, on a spreadsheet, exactly like deleting a line that was.

Here is the number that shows what "550 vacant positions eliminated" was actually worth: net funded positions citywide fell from 32,788 to 32,507 over the same two years — a drop of about 281, roughly half of one percent.▸ The other 270 or so vanished-on-paper vacancies were offset by new funded positions departments opened elsewhere in the same budget. The 550-plus figure is real, and it is the number the Mayor's Office put in its own budget book. It is also not, by itself, evidence that the city government got smaller by 550 jobs — mostly it means the city stopped budgeting for work it wasn't doing anyway, while some other line grew back.

Figures cover City and County of San Francisco General Fund operations only; position counts are net funded FTEs citywide across the General Fund and enterprise departments, as reported in the Mayor's Proposed Budget Book's grand recap tables, and may shift modestly between the proposed and final adopted budget.