Pedestrians walk down a street in San Francisco, California.
Photographer: David Paul Morris / Bloomberg
Photographer: David Paul Morris / Bloomberg
San Francisco officials expect budget deficits to reach $ 503 million in five years and said it is unclear whether high-wage workers will return to the technology center after the coronavirus pandemic eases.
In a report released Friday by city tax analysts, San Francisco projected a $ 411 million gap next year. Until June 2026 from June 2021, expenses, driven by increases in salary and compensation costs, will increase by 24% and revenue will grow by only 15.5% over the same period. Meanwhile, city officials have largely exhausted one-off sources to close the previous two-year budget gap of $ 1.5 billion, according to the report.
In addition, while analysts expected most of San Francisco’s revenue streams to recover to pre-pandemic levels in five years, they raised flags about the tourism forecast, offices and small businesses. They pointed out that sales tax revenues fell more than 70% in the second quarter of last year compared to the same period in 2019 in the downtown shopping, hotel and business districts. And, unlike other communities, the city experienced virtually no growth in online sales tax, which showed that Franciscans moved away, at least temporarily, while working remotely.
“While we expect the economic consequences of COVID-19 to be less severe as vaccine deployment continues and we reopen once again, we still have to make difficult decisions now to make sure we are able to provide the services. that depend on our residents, ”Mayor London Breed said in a statement.
If people return to their offices after the outbreak subsides, San Francisco will return to normal and return to normal, according to the report. “On the other hand, if office tenants and their employees decide that the benefits of prolonged work from home (or direct relocation) outweigh any loss of productivity, costly real estate and office markets like San Francisco they face an uncertain future. “