San Francisco Budget Committee Approves $30 Million Prop C Fund Reallocation, Grants Mayor Lurie Flexibility with $19 Million Extra Revenue

San Francisco’s Budget and Appropriations Committee has reached a pivotal agreement concerning the reallocation of Proposition C homelessness funds, reducing Mayor Daniel Lurie’s initial request from approximately $90 million to $30 million. The committee also granted the mayor increased flexibility to spend up to $19 million in additional revenue from the tax, subject to a simple majority vote by the full Board of Supervisors. This decision, part of broader budget negotiations, has sparked mixed reactions, including strong public criticism.

The 2018 Proposition C, known as the "Our City, Our Home" fund, was established by voters through a gross receipts tax on businesses to finance a range of homelessness services, with specific allocations for permanent supportive housing, mental health services, and prevention programs. Mayor Lurie's administration sought to redirect a significant portion of these unspent funds, initially around $88.5 million over three years, towards expanding shelter capacity and immediate street-to-stability initiatives under his "Breaking the Cycle" plan.

The compromise reached by the Budget Committee scales back the proposed reallocation, but still allows for a substantial shift in funding priorities. The agreement also modifies the oversight mechanism for future excess revenue, moving from a supermajority requirement to a simple majority for the $19 million portion. This change prompted concerns from some supervisors, including Jackie Fielder, who questioned the erosion of the original voter-approved protections for Prop C funds.

The reallocation has drawn sharp criticism from homelessness advocates who argue it diverts crucial resources from long-term housing solutions and prevention programs. Jennifer Friedenbach, Executive Director of the Coalition on Homelessness, publicly decried the decision as a "mayoral power grab," stating that Prop C was "carefully constructed to ensure that data-driven, voter-approved mandates existed to build a responsive and efficient homeless system that was protected from wrongheaded political winds."

A recent tweet from Susan Dyer Reynolds, reacting to the committee's decision, expressed strong disapproval, stating,

"From $90 million to $30 million reallocation for Prop. C and if approved by a simple majority of the board the committee also agreed to let Lurie “more freely” spend up to $19 million in extra revenue. What a joke. @DanielLurie remove Friedenbach from controlling the money." This sentiment highlights the contentious nature of the budget discussions and the public's scrutiny of the city's approach to homelessness funding.

The city faces an estimated $800 million budget deficit, influencing the difficult financial decisions being made. The debate over Prop C funds reflects a broader tension between investing in permanent housing and expanding temporary shelter options, a challenge many California cities are navigating. The full Board of Supervisors is scheduled to vote on the comprehensive budget, including these Prop C adjustments, on July 15.