San Francisco’s budget will grow to $9.6 billion in fiscal year 2016-17, a $700 million increase from this year that will pay for more transportation funding, street cleaning and police officers.

The increase reflects the city’s sustained economic rebound; the budget has grown by 41 percent since 2011-12. It also assumes that voters will pass a three-quarter-cent sales tax increase in November to fund transportation and homeless services.

Under the budget proposal submitted by Mayor Ed Lee on Tuesday, there are no cuts to city services, and departments large and small, from the Police Department to the Ethics Commission, would see a fiscal boost.

The city’s workforce would grow by 4.1 percent, from just under 30,000 to 30,750. And the budget allocates money for one-time investments in deferred projects like road paving and new equipment for the Fire Department.

“It is vital that we make investments now that will pay off in the long run,” Lee said in a speech Tuesday in the Board of Supervisors’ chambers.

Mayor’s priorities

He said his budget reflected his three main priorities: addressing homelessness, violence prevention and police reform, and quality-of-life issues.

“Our city is facing challenges — we can’t deny that,” Lee said. “Neighborhood crime is up. Homelessness is a visible and pressing concern. The need for police reform is evident.”

Of the $700 million increase, 25 percent will go to the Municipal Transportation Agency, 31 percent to housing, public health and social services, 14 percent to the airport, port and Public Utilities Commission, and 13 percent to public safety departments like police and fire. The balance will pay for smaller changes across other departments.

Lee also proposed a $221 million budget for his newly formed Department on Homelessness and Supportive Housing. Of that money, $32 million is new funding, $12 million of it contingent on voters passing the proposed three-quarter-cent sales tax in November.

Should the tax muster the 50 percent support it needs to pass, one-third of the money would be allocated to homeless services and two-thirds would be allocated for transportation and transit services, including street repaving. The increase would partially be offset by a reduction in the state sales tax later this year.

Budget deficit remains

Despite the city benefiting from a particularly strong economy in recent years, it still has a budget deficit.

The city has projected an $86 million budget deficit for 2016-17 and $161 million in 2017-18. The city’s pension obligations account for a big portion of that. Lee’s proposed budget pays off that deficit and makes new investments.

Lee also projects the city’s reserves will contain $380 million by the end of the 2017-18 fiscal year, which would be roughly 8 percent of the General Fund budget. The city has a stated goal of having a reserve fund that equals 10 percent of the General Fund budget.

In new spending, the Fire Department would see a $14 million one-time boost over the span of the two-year budget, $7 million each year, to purchase new equipment.

“These are exactly the types of things we should be doing when we have money,” said Melissa Whitehouse, the mayor’s acting budget director.

Lee also proposed an additional $20 million in funding over the next two years for violence prevention programs and police reform efforts.

While Lee has previously announced that funding, one aspect is new: He proposed increasing this year the number of police academy classes to train new officers from five to seven. Lee said that with those additional classes, the police department would meet its official goal of having 1,971 officers by the end of 2017.

He said putting additional officers on the streets is key to addressing a jump in property crimes in the city, and making residents feel safe in their neighborhoods.

Contention among supes

But Supervisor John Avalos criticized increasing the number of police academy classes. Alluding to the fatal police shootings of suspects who weren’t carrying guns, he said the city should not pay for more classes until the Police Department shows that it has implemented reforms that emphasize de-escalation tactics and less reliance on lethal force.

“Having more academy classes when we haven’t figured out how to (implement reforms) doesn’t make good sense,” he said.

Avalos also suggested that the Board of Supervisors put $200 million in funding for the Police Department in reserves and allocate it only when the department shows progress in carrying out the reforms.

Supervisor Scott Wiener called that a “terrible idea.”

“We need police reform and we also need improved public safety in our neighborhoods. The idea that we would encourage police understaffing is irresponsible,” he said.

The budget will go to the Board of Supervisors to amend over the next month and ultimately approve.

A long-standing practice is for longtime Budget & Legislative Analyst Harvey Rose to scour the mayor’s proposal to recommend cuts that add up to roughly $10 million to $15 million, which the board then reallocates to specific projects.

Supervisor Mark Farrell, chairman of the Budget & Finance Committee, said Lee addressed his major concerns in the budget.

“I agree with the mayor’s priorities in terms of public safety, neighborhood quality of life and homelessness,” Farrell said. But, he added, “The devils are always in the details.”

Emily Green is a San Francisco Chronicle staff writer. Email: egreen@sfchronicle.com

Twitter: emilytgreen

Proposed San Francisco budget

Total department uses by major service area FY 2016-17 ($ millions) FY 2017-18 ($ millions) Public protection 1,467.4 1,492.6 Public works, transportation and commerce 3,706.5 3,810.6 Human welfare and neighborhood development 1,351.4 1,379.9 Community health 2,043.3 2,081.4 Culture and recreation 412.5 409.6 General administration and finance 1,084.6 1,012.5 General city responsibilities 1,881.4 2,051.4 Less transfer adjustments* (2,364.1) (2,532.3) Total budget 9,583.0 9,705.8

*Adjustments required to avoid double counting of expenditures and revenue moving between city agencies