Pedestrians walk down a street in San Francisco, California.
Photographer: David Paul Morris / Bloomberg
Photographer: David Paul Morris / Bloomberg
San Francisco officials expect a budget deficit of $ 503 million in five years and said it is unclear whether high-wage workers will return to the technology hub after the coronavirus pandemic subsides.
In a report released Friday by the city’s tax analysts, San Francisco predicted a $ 411 million gap in the next fiscal year. Through June 2026 from June 2021, expenses, driven by increases in salary and compensation costs, will increase by 24%, while revenues will only increase by 15.5% over the same period. Meanwhile, city officials have largely depleted one-time sources to close the previous two-year budget deficit of $ 1.5 billion, the report said.
Additionally, while the analysts expected most of San Francisco’s revenue streams to recover to pre-pandemic levels within five years, they have hoisted flags over the forecast for tourism, offices and small businesses. They noted sales tax revenues in the second quarter of last year fell by more than 70% compared to the same period in 2019 in downtown shops, hotels and business areas. And the city saw virtually no growth in online sales tax, unlike other communities, showing that San Franciscans have indeed moved, at least temporarily, while working remotely.
“While we hope that the economic impact of COVID-19 will lessen as vaccine introduction progresses and we reopen, we still have to make tough choices to ensure we can provide the services our residents depend on . on, ”Mayor London Breed said in a statement.
If people return to their offices after the outbreak subsides, San Francisco will recover and return to normal, the report said. “On the other hand, if office tenants and their employees decide that the cost benefits of extended telecommuting – or outright relocation – outweigh the loss of productivity, expensive office and real estate markets like San Francisco face an uncertain future.”