Lurie’s budget cuts could trigger 1,000 nonprofit layoffs in San Francisco

Domestic-violence survivors looking for housing, Bayview families depending on doula care, and residents who count on Tenderloin street fairs all stood to lose services as Mayor Daniel Lurie’s budget squeeze reached San Francisco’s nonprofit safety net. The cuts threatened millions in city contracts and could ripple quickly into layoffs, reduced hours, and closed programs in neighborhoods where public services are already thin.

Lurie’s first full budget, released May 30, 2025, was a $15.9 billion plan for fiscal years 2025-26 and 2026-27 built to close an historic $800 million deficit. His office said the proposal would eliminate about 1,400 city jobs and cut about $100 million in grants and other contracts. The San Francisco Board of Supervisors later approved the budget 10-1, and Lurie signed it on July 24, 2025.

The city’s own Community Budget Summary said the two-year budget reflected a significant reduction to grants and contracts across departments because of slow revenue growth. It said ongoing nonprofit contracts in the general fund still received a cost-of-doing-business increase of 1 percent in fiscal 2025-26 and 1.4 percent in fiscal 2026-27, but other areas were reduced or reshaped. Neighborhood ambassador funding was centralized for re-procurement, downtown public safety ambassador funding was left out of the proposed budget, and workforce reductions were tied in part to expiring state grants. Children-and-family grants were maintained across 255 programs.

The political backlash was immediate. More than 1,000 labor and community organizers flooded City Hall on June 4, 2025, in what KQED described as the biggest budget rally in about 20 years in San Francisco history. Jennifer Friedenbach of the Coalition on Homelessness called the proposal a “politics-first budget” that deprioritized the poorest and most vulnerable residents, while Anya Worley-Ziegmann of the People’s Budget Coalition said essential needs like food and housing were being ignored.

The pressure did not ease after the budget passed. San Francisco’s March 2026 financial update projected a two-year general fund shortfall of $642.8 million for fiscal 2026-27 and 2027-28, and the city announced 127 layoffs in April 2026 as the broader austerity drive continued. For nonprofits serving the Tenderloin, Bayview, and other neighborhoods that depend on city-funded providers, the result was not just an accounting gap. It was a direct threat to the staff, programs and access points that keep residents connected to housing help, health care, and basic support.