Budget Issue ID Session I: Executive Wants Authorization for an Early Retirement Program that Doesn't Exist Yet

In addition to cuts and funding shifts to close the General Fund gap, the Executive wants permanent authority to issue early retirement offers.

Session I on Tuesday Oct. 13 began with an overview of the Mayor’s proposed budget. Central Staff Director Lish Whitson said it’s "generally balanced" through 2030 but "does rely on some one time adjustments," with a structural deficit still projected. As proposed, the budget nets $61 million in lower spending in 2027 and $78 million in 2028 primarily by shifting $47 million in Human Services Department homelessness programs from the General Fund to JumpStart in both years and by discontinuing one-time adds Council made in the 2026 adopted budget.

Most of the discussion focussed on the Executive’s proposed legislation authorizing the SDHR Director to offer eligible employees a voluntary early separation program subject to certain parameters. It would include the Director’s ability to develop substantive details and parameters, bargain relevant aspects with unions, and implement the program and Council’s role would be limited to considering department requests for additional appropriations if necessary for implementation. Select Budget Committee Vice-Chair Rivera opposed the delegation of Council’s appropriation authority, noting support for a voluntary separation program in principle but only if Council can review or amend it first (02:26). Sources: Session I captions; Central Staff Memo: Voluntary Early Separations Ordinance

KEY STATS

1. Starting gap: $175M (2027) and $164M (2028) after April cost updates, up from $149M and $129M projected at last year's adoption. Baseline changes, including a higher August revenue forecast, cut that by $90.9M and $67.2M. Central Staff memo, item 2
2. Mayor's operating proposals: net $61M (2027) and $78M (2028) in lower spending. The largest piece is a $47M-a-year switch of homelessness programs in the Human Services Department from General Fund to JumpStart funding in both 2027 and 2028, almost half of the ongoing reductions. $24.4M (2029) and $30M (2030) shift back to the General Fund. Central Staff memo, item 2, pp. 14, 17
3. One-time adds: last year's $149M projection already assumed Council's one-time adds would expire. Central Staff said they come out in the baseline, and anything the Mayor adds back shows up as a Mayor's proposal. Central Staff memo, item 2

1. Remaining gap: $23.2M (2027) and $18M (2028), covered by $56.5M of one-time fund balance, with a $14M draw in 2029 and a $9M surplus in 2030. $19M in cuts would be needed in 2029 on current assumptions. Central Staff memo, item 2, pp. 17, 22
2. Early separation cost: CBO floated about 8.8M for2027(6.5M in incentives plus $2.3M in leave payouts), no 2027 savings, and about $8M a year in General Fund savings from 2028. Central Staff Memo: Voluntary Early Separations Ordinance Draft summary and fiscal note
3. Eligibility: about 1,350 employees are eligible; 169 would retire anyway. CBO estimates 110 more would retire with an incentive whose terms are unknown. Presentation: Voluntary Early Separations Ordinance