Lurie Demands Deep Budget Cuts
PLUS: Muni Parcel Tax Details
What You Need To Know
Here’s what happened around the city for the week of December 7, 2025:
- Lurie Demands Deep Budget Cuts
- Muni Parcel Tax Details
- Clipper 2.0 Brings Rider Savings
- SFUSD Nears Stable Budget
- Court forces Huntington Beach to follow housing law
- Nonprofit Spending Doubles, Oversight Lags
Lurie Demands Deep Budget Cuts
Published December 12, 2025
The Facts:
Mayor Daniel Lurie ordered departments to find $400 million in ongoing cuts by reducing services, eliminating vacancies, and limiting hiring to help close a $936 million two-year deficit. His first $15.9 billion budget already closed a $782 million gap largely through nonprofit grant reductions and limited layoffs, as detailed in his balanced budget proposal. Lurie partly blames new federal funding reductions under President Trump’s “One Big Beautiful Bill” Act, which City Hall estimates will cost San Francisco about $220 million.
The Context:
San Francisco’s deficit is structural: for years, spending has outpaced recurring revenue while one-time fixes and unfilled positions papered over the gap. A recent joint report on the city’s finances warns that lawsuits, slow downtown recovery, and rising costs will keep shortfalls high even as some revenues rebound. Labor unions and nonprofits, who mounted protests against earlier cuts, are likely to protest further reductions to services or jobs.
The GrowSF Take:
Facing the problem honestly is welcome, and City Hall should continue its smart targeting: eliminating vacant and duplicative roles, consolidating programs, and demanding measurable results from every dollar. City Hall should also face the reality of overgrown staffing: City Hall employment has grown almost 30% since 2005, while the population has been roughly flat. Nobody wants people to lose their jobs, but the role of government isn’t to provide life-long jobs, it’s to provide good services. And when there’s not enough money to go around, we should all ask ourselves: do we want to cut services, or City Hall jobs?
Muni Parcel Tax Details
Published December 11, 2025
The Facts
Mayor Daniel Lurie’s team has proposed a “progressive” Muni parcel tax for the November 2026 ballot to raise about $187 million a year and help close Muni’s $307 million operating deficit. Here, “progressive” means larger, higher‑square‑footage properties pay more per square foot than smaller ones.
Roughly 96% of single‑family homes under 3,000 square feet would pay a flat $129 per year, with an exemption option for eligible senior homeowners. Larger single‑family homes, multifamily buildings, and commercial parcels would pay higher, size‑based rates, with caps for big apartment and office properties. Most of the money would support Muni operations, with a portion for service improvements and administration.
The Context
Muni’s deficit could grow to $434 million within five years, and service cuts are on the table if new funding fails, according to Rachel Swan at The Chronicle. The agency has already “found hundreds of millions of dollars in savings” by cutting positions and improving efficiency, but still faces a structural gap.
Separately, Gov. Gavin Newsom signed SB 63, the Connect Bay Area Act, allowing a five‑county November 2026 transit sales tax expected to raise about $980 million annually. The parcel tax and regional measure are designed to work together; if either fails, Muni may cut roughly a third of its lines and double wait times, as outlined in a Chronicle analysis.
The GrowSF Take
San Francisco needs stable funding for a cleaner, more frequent Muni, and SFMTA deserves credit for cutting costs before asking voters for more revenue.
We can’t let public transit fail - it’s too important for our economy. Without reliable transit, our streets will be clogged with hundreds of thousands of new cars from people driving into the city for work. Those workers are vital to funding other valuable city services.
We think the progressive nature of the tax, where smaller properties and renters would pay less than owners of larger buildings. Parcel‑tax pass‑throughs should be structured carefully so they don’t unduly burden low‑income renters, but it is totally reasonable that some share of a property‑based tax ultimately shows up in rental costs.
If this passes alongside the regional funding measure, this could put Muni on a sustainable path instead of a slow‑motion death spiral.
Clipper 2.0 Brings Rider Savings
Published December 11, 2025
The Facts
The Metropolitan Transportation Commission’s “Next-generation Clipper” launched on December 10, adding discounted transfers of up to $2.85 within two hours, instant fund loads, tap‑to‑pay with credit/debit cards, family accounts, and online youth/senior applications, per Chloe Veltman at KQED. Existing cards—about 5 million—will be upgraded in batches over 8–12 weeks unless riders manually start the process via clippercard.com or customer service.
The Context
For years, riders effectively paid a new fare every time they switched agencies, a byproduct of the Bay Area’s 20+ separate operators. MTC’s fare‑integration program now treats one multi‑agency trip as a single journey with discounted transfers, as outlined in its Transit Fare Coordination & Integration plan. This rolls out while BART, Muni and other agencies face a projected $3.7 billion operating shortfall by 2031, according to Dan Brekke at KQED.
The GrowSF Take
Next-generation Clipper is a big, overdue win for riders. Discounted transfers, instant reloads, and simple tap‑to‑pay finally treat a multi‑agency commute as one coherent trip instead of a patchwork of separate fares.
This kind of rider‑first design makes transit more attractive for everyday trips—getting to work, running errands, going out at night—and moves the Bay Area closer to a truly seamless regional network. The more we align fares and simplify payment, the easier it becomes for people to leave the car at home and rely on fast, frequent, integrated transit.
SFUSD Nears Stable Budget
Published December 11, 2025
The Facts:
San Francisco Unified School District (SFUSD) has announced it will submit a “qualified” budget to the state in early December 2025, moving up from a “negative” certification and marking a key step toward exiting state fiscal oversight and restoring full local control by March 2026. This progress reflects a multi‑year Fiscal Stabilization Plan that cuts about $114 million from the 2025–26 budget, largely through central‑office reductions and early retirements instead of teacher layoffs, while still leaving projected unrestricted‑fund deficits of $51 million in 2025–26, $32 million in 2026–27, and $19 million in 2027–28 if no further adjustments are made.
The Context:
SFUSD has been under heightened state scrutiny since the California Department of Education (CDE) downgraded its budget to “negative” in May 2024 and empowered fiscal advisors to review major spending decisions, reflecting years of deficit spending and weak controls.
Since then, the district has been implementing a detailed fiscal stabilization plan, including hundreds of central‑office job cuts, early‑retirement incentives, and a switch from the failed EMPower payroll system to the Frontline platform. Together, these moves aim to stop the “credit card” budgeting that threatened insolvency and a full state takeover.
The GrowSF Take:
This milestone is real progress: Superintendent Maria Su and the Board of Education are finally making the tough calls needed to stabilize SFUSD while keeping teachers in classrooms. But a “qualified” budget still means some risk. To truly restore local control and trust, the Board must stay disciplined—prioritizing student outcomes over bureaucracy, negotiating sustainable labor agreements, and being transparent with families about what further cuts mean at school sites. San Francisco’s kids deserve a district that is both academically excellent and fiscally sound, not one financial crisis away from state control.
Court forces Huntington Beach to follow housing law
Published December 11, 2025
The Facts
The California Supreme Court has let stand a ruling ordering Huntington Beach to follow state housing law and adopt a plan that makes room for 13,368 low‑income homes. If the city does not adopt a compliant housing element within 120 days of further trial‑court proceedings, the state can block new building permits. The case began with a 2023 lawsuit in which Gov. Gavin Newsom and Attorney General Rob Bonta sued the city for refusing to adopt a state‑compliant housing element and for trying to block SB 9 lot splits and ADUs, according to the governor’s press release.
The Context
State officials have made clear through their housing enforcement unit and lawsuits that the Housing Element Law is not optional: every city must plan and zone for its fair share of homes or face sanctions, including frozen permits and the “builder’s remedy,” as described in a Newsom administration overview of housing element enforcement. Huntington Beach argued that its charter‑city status let it opt out; courts rejected that argument and treated the housing crisis as a statewide concern.
San Francisco is a charter city under the same rules. To keep its own Housing Element in good standing and avoid a Sacramento takeover, the city had to pass an aggressive upzoning package—often called the “family zoning” plan—that legalizes more homes in high‑resource neighborhoods and around transit, as outlined in the Planning Department’s implementing programs.
The GrowSF Take
This ruling is a warning and a roadmap for San Francisco. Courts are backing the state’s power to force reluctant charter cities to plan for housing. That confirms that our new family zoning and broader upzoning weren’t optional experiments—they were necessary to keep control of our own planning and avoid builder’s‑remedy chaos and state sanctions.
Going forward, SF leaders should treat state compliance as the floor, not the ceiling: stay on schedule with zoning changes, don’t water down the Housing Element, and approve projects quickly. If we stall, Sacramento has shown it is willing—and now clearly empowered—to step in.
Nonprofit Spending Doubles, Oversight Lags
Published December 12, 2025
The Facts:
San Francisco now spends $1.63 billion a year on contracts with nonprofits, up from $809 million in 2019 and from 6.6% to 10.2% of the city budget, according to a Chronicle analysis. Most new spending runs through the homelessness and public health departments, powered by Prop. C business taxes and pandemic‑era funding.
The Context:
This surge sits inside a roughly $16 billion budget that has grown about two‑thirds (inflation‑adjusted) since 2011 even as structural deficits loom, per a separate Chronicle budget review. The Controller’s Office says more than 600 nonprofits now deliver around $1.5–$1.7 billion in safety‑net services each year through its citywide monitoring program. A 2022 Controller audit of nonprofit oversight found departments using inconsistent performance metrics and recommended stronger evaluation standards, which led to updated citywide monitoring policies.
The GrowSF Take:
San Francisco has leaned on nonprofits for so long that City Hall has stopped building its own capacity to run shelters, treatment, and housing at scale. That’s a problem. When government doesn’t know how to operate these systems directly, it also struggles to set smart standards, compare providers, or replace underperformers.
Nonprofits will always have a role, but they should be the exception for specialized services—not the default operator of core safety‑net functions. Without clear performance metrics and public reporting, the quiet incentive is to seek bigger contracts while cutting corners on service quality.
We want a city that can do hard things itself: staff and manage high‑quality programs, learn from what works, and only outsource when it clearly adds value. That means growing in‑house expertise, tightening accountability for every major contract, and being willing to end relationships that don’t deliver real results on our streets.