A large share of San Francisco’s municipal workforce is poised to receive 12% wage increases over the next four years, along with a pledge that no layoffs will occur — even as the city faces a projected $450 million shortfall in fiscal year 2029.
Mayor Daniel Lurie and 10 labor unions representing roughly 25,000 city employees struck the unexpected agreement Tuesday, just weeks before the unions’ current contract is set to expire on June 30. The deal comes three months after Lurie approved comparable raises for police officers and firefighters as part of a historic $17 billion city budget.
“We put forward a contract extension that honors their work, provides stability and recognizes the cost-of-living increases affecting so many San Franciscans,” Lurie said in a statement.
“We have worked closely with labor leaders in recent weeks to put forward this offer, and I am grateful for their partnership in supporting the workers and completing this process promptly so we can stay focused on providing excellent services and driving our city’s comeback.”
When combined with raises already included in existing contracts, the total compensation increase could reach 14.31% by 2031, according to the mayor’s office.
Under the agreement, city workers covered by the deal would be protected from layoffs through June 2029.
The higher payroll costs could complicate San Francisco’s efforts to stabilize its finances as officials continue grappling with a persistent budget crisis.
Lurie’s record-setting budget closed a near-term, two-year deficit of at least $642 million, but the city’s longer-term financial picture remains under pressure, with spending expected to grow faster than revenue in the years ahead.
San Francisco is projecting a budget shortfall of approximately $936 million with a $296 million deficit in fiscal year 2027 and $640 million in fiscal year 2028.
Still, labor leaders in statements claimed the raises are very much needed.
“City workers are stretched thin and the cost of living is shooting up like never before,” said Sarah Perez, vice president of IFPTE Local 21. “Whether you rely on transit, enjoy beautiful parks, or use our libraries, this represents stability for residents and city workers.”
Lurie will have to navigate how to close the city’s deficits in the upcoming years alongside the promised pay package.
It is unclear how the increased salaries will be funded in the coming years, the San Francisco Standard reported, but the mayor’s office said that will be addressed in next year’s budget.
Lurie may have avoided a political headache by avoiding the possibility of a widespread strike.
The labor agreement is not yet finalized. Rank-and-file union members must still ratify the deal.
