Greenberg: San Francisco’s Insanely High Per Capita Spending

It’s hard to believe but our new mayor, Daniel Lurie, who campaigned on accountability as a main talking point, is now proposing a tax, a parcel tax, to be put to the voters next year, to close the gap in funding our transportation system, SFMUNI. That deficit is projected to be $322 million.

Lurie states:

“We believe that a parcel tax is the best mechanism to generate the level of funding needed to support Muni service and that it can be structured in a way that is fair and affordable.”

This is appalling, as there is plenty of money to be had in San Francisco; city hall just needs to take a hard look introspectively.

San Francisco’s annual city hall budget stands out starkly when compared to other major California cities like Los Angeles, San Jose, San Diego, and Sacramento. For the fiscal year 2025-26, San Francisco’s proposed and then approved budget is $16 billion for on a population of an estimated 800,000. It’s hard to pin down actual resident counts, with current ranges between 768,000 to 827,000. This ultimately translates to a per capita spending of approximately $20,000.

In contrast, the per capita spending in Los Angeles ($3,700), San Jose ($5,600), San Diego ($4,300), and Sacramento ($3,400.00) averages around $4,250 for those four cities.

San Francisco’s per capita spending of over four times the average raises obvious questions about efficiency, necessity, and sustainability. Reducing San Francisco’s per capita spending to align more closely with the state’s urban average could yield significant fiscal benefits while maintaining essential services.

San Francisco’s excessive spending is partly attributable to its dual role as both a city and a county, a structure that consolidates responsibilities not typically tackled by other municipalities. Unlike Los Angeles, Sacramento, San Jose or San Diego, San Francisco manages county-level services such as public health, social services, and elections, which highly inflate its budget. For instance, the city’s Department of Public Health alone accounts for a significant portion of expenditures, with programs addressing mental health and substance abuse that are typically county-funded elsewhere.

However, these county-level factors do not adequately justify a per capita spending rate that dwarfs other cities with comparable urban fiscal challenges.

San Francisco’s budget has faced scrutiny for inefficiencies, particularly in addressing persistent issues like homelessness and drug addiction. Despite allocating over $1 billion annually to homelessness and supportive housing programs, the visible crisis on our streets is still here, making headlines. There is an obvious need for more effective and accountable allocation rather than big budget spending. Los Angeles, with a population nearly four times larger, spends significantly less per capita ($3,700) while addressing similar homelessness challenges, albeit imperfectly. San Francisco’s approach, which includes funding for extensive nonprofit contracts, lacks measurable outcomes. We should reduce per capita spending and force a reevaluation of these programs altogether. In other words, respect the hard working taxpayers who are paying for this.

San Francisco’s police and fire departments consume substantial funds, yet us residents frequently cite safety concerns as inadequate or unaddressed. Yet San Diego, with a per capita spending of $4,300 and a population of 1.4 million, maintains robust public safety services while balancing investments in infrastructure and community programs.

If San Francisco’s per capita spending were reduced to the average of the other four cities ($4,250), its annual budget would drop to approximately $3.50 billion, a reduction of $12.5 billion from the current $16 billion. This drastic cut, while extreme, would require careful implementation to avoid undermining essential city services. A phased approach could target administrative redundancies, renegotiate high-cost contracts, and eliminate underperforming programs. It would take courage and heroism, lacking in today’s city Hal leadership.

The city’s 2025-26 budget already includes cuts to nonprofit contracts and vacant positions to address an $800 million deficit, suggesting that further reductions are feasible without gutting core services. Redirecting savings to high-impact areas like infrastructure repair or public transportation, namely SFMUNI, enhances residents quality of life more effectively than current wasteful spending patterns.

Of course, some argue that reducing city hall spending risks neglecting San Francisco’s unique challenges, such as its role as a tech hub with high income inequality and a severe housing shortage. But comparing to other cities shows that high spending does not mean better outcomes. Sacramento, with a per capita spending of $3,400, manages to fund youth programs and homelessness initiatives while maintaining fiscal discipline. Again, San Francisco’s per capita spending is nearly $20,000. Insane.

Excessive spending contributes to a long term tax burden that deters new residents and businesses. San Francisco’s high property and business taxes, driven by its need to fund this bloated budget, risk exacerbating outmigration, as seen in recent population declines (down from 890,000 pre-Covid) just before 2020 to 800,000 today).

Comparing Denver and San Francisco

Denver, Colorado, and San Francisco, California, are prominent charter cities, each wielding significant autonomy to shape their governance and fiscal policy responsibility under self-drafted charters.  Both are urban hubs, they similarly share progressive values, vibrant economies, and challenges like housing and infrastructure, but their population sizes, operating budgets, and per capita spending reveal truly stark differences.

Denver’s estimated population in 2025 is approximately 716,000. San Francisco, with a slightly larger population of 800,00 is a global epicenter for technology, finance, and cultural diversity. Denver’s affordability, with median home prices around $600,000, attracts young professionals, while San Francisco’s median home price exceeds $1.4 million, making it one of the costliest cities in the U.S. Both cities leverage their charter status to address urban challenges, but San Francisco’s denser, high-cost urban core contrasts with Denver’s more accessible, growing ecosystem.

As charter cities, Denver and San Francisco have flexibility for their city hall officials to craft budgets reflecting local priorities. Denver’s 2025 general fund budget, covering operational costs like public safety and parks, is $1.76 billion, with a total budget of $4.4 billion including special “enterprise” funds like Denver International Airport. San Francisco’s general fund budget for 2024-2025 is significantly larger at $6.8 billion, with a total budget of $15.9 billion, driven by enterprise funds such as San Francisco International Airport and the Public Utilities Commission. (The general fund is the standard metric for operational spending, as it directly supports resident services, making it ideal for per capita comparisons here.)

Per capita spending clearly underscores a significant disparity here. Denver’s general fund translates to approximately $2,457 per resident ($1.76 billion ÷ 716,000), reflecting a lean approach to municipal services. San Francisco’s per capita general fund spending, however, is a staggering $8,500 ($6.8 billion ÷ 800,000), over three times higher. This gap highlights San Francisco’s extraordinarily high spending, driven by its high cost of living and ambitious yet unaccountable social programs, highlighting inefficiency and waste. San Francisco’s elevated spending partly stems from high salaries, with average city employee compensation over $100,000 and more than 770 employees making over $400,000 [https://www.sfchronicle.com/projects/2025/san-francisco-employee-pay/ ]. Social issues like homelessness, drug addiction and housing shortages demand substantial investment, with over $1.1 billion spent annually on homelessness programs alone. Denver, while investing in similar areas like its Regional Transportation District, faces much less intense pressures, allowing for a leaner budget.

Of course, San Francisco’s spending has drawn criticism for inefficiencies, with audits pointing to mismanagement and fraud. Consolidating contracts and prioritizing permanent housing over temporary solutions, as proposed by Mayor Daniel Lurie, could save funds while maintaining support for vulnerable residents.  Further streamlining non-essential positions could save millions without impacting frontline services like public safety or street cleaning and upgrades, preserving quality of life. San Francisco should also scrutinize vendor agreements for duplicity and accountability.

San Francisco’s $16 billion total budget is insane. Making taxpayers financially support this overspending is unsustainable and unfortunately, Mayor Lurie is failing at his primary campaign promise. For him to now suggest new taxes to fund MUNI rather than cut the bloat is unconscionable.