Pedestrians walk down a street in San Francisco, California.
Photographer: David Paul Morris / Bloomberg
Photographer: David Paul Morris / Bloomberg
San Francisco officials expect to see budget deficits reaching $ 503 million in five years and said it is unclear whether high-paid workers will return to the technology center after the coronavirus pandemic subsides.
On a report released Friday by city tax analysts, San Francisco projected a $ 411 million gap in the next fiscal year. By June 2026 to June 2021, expenses, driven by increases in wage and compensation costs, will increase 24%, with revenue growing only 15.5% in the same period. Meanwhile, city officials have largely exhausted single sources to close the previous two-year $ 1.5 billion budget deficit, 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 outlook for tourism, offices and small businesses. They noticed that sales tax revenues fell more than 70% in the second quarter of last year compared to the same period in 2019 in downtown retail, hotels and business districts. And the city has seen virtually no growth in online sales tax, unlike other communities, showing that San Franciscans have actually moved, at least temporarily, while working remotely.
“While we hope that the economic consequences of COVID-19 will become less severe as the vaccine launch continues and reopen again, we still need to make difficult choices now to ensure that we can provide the services that our residents depend 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 prolonged work at home – or total relocation – outweigh any lost productivity, then expensive offices and real estate markets like San Francisco face an uncertain future. “