Pedestrians walk down a street in San Francisco, California.
Photographer: David Paul Morris / Bloomberg
Photographer: David Paul Morris / Bloomberg
San Francisco officials expect budget shortfalls to reach $ 503 million in five years and say it is unclear whether high-wage workers will return to the technology center after the coronavirus pandemic disappears.
One report released Friday by city tax analysts, San Francisco projected a $ 411 million gap next fiscal year. Until June 2026, starting with June 2021, the expenses, determined by the increase of salaries and compensation costs, will increase by 24%, the revenues increasing only by 15.5% in the same period. Meanwhile, city officials have largely exhausted single sources to reduce the previous two-year budget gap by $ 1.5 billion, the report said.
In addition, while analysts expected most of San Francisco’s revenue streams to return to pre-pandemic levels in five years, they raised flags about the forecast for tourism, offices and small businesses. They noted that sales tax revenues fell by more than 70% in the second quarter of last year, compared to the same period in 2019 in the retail, hotel and business districts of the city center. And the city has seen virtually no increase in online sales tax, unlike other communities, showing that the San Franciscans did move away, at least temporarily, while working remotely.
“While we are hopeful, the economic consequences of COVID-19 will become less severe as vaccine launches continue and we reopen once again, we must still make tough choices now to ensure that we are able to deliver the services we depend on. our residents further, ”said Mayor London Breed in a statement.
If people return to their offices after the outbreak subsides, San Francisco will return to normal, the report said. “On the other hand, if office tenants and their employees decide that the benefits of extended home labor costs – or direct relocation – outweigh any loss of productivity, then expensive office and real estate markets like San Francisco face an uncertain future. . ”