San Francisco Sees Budget Gaps as Highly-Paid Workers Flee City
(Bloomberg) - San Francisco officials expect budget constraints of $ 503 million to hit in five years, and said it was unclear whether high-wage workers will return to the tech center after the coronavirus pandemic subsides.
In a report released Friday by the city's financial analysts, San Francisco projected a $ 411 million gap for the next fiscal year. By June 2026 from June 2021, expenses will increase 24% due to salary increases and compensation costs, with revenues only increasing 15.5% over the same period. Meanwhile, city officials have largely exhausted the one-off sources to fill the previous two-year budget gap of $ 1.5 billion, the report said.
While analysts expected most San Francisco revenue streams to return to pre-pandemic levels in five years, they hoisted flags over the tourism, office and small business forecast. They found that sales tax revenues in the second quarter of last year were down more than 70% compared to the same period in 2019 in downtown retail, hotel and business districts. And, unlike other parishes, the city saw virtually no growth in online sales tax, which shows that the Franciscans have indeed moved away, at least temporarily, while working remotely.
“While we are confident that the economic impact of COVID-19 will become less severe as the vaccine continues to roll out and reopen, we now have tough decisions to make to ensure we can deliver the services our residents depend on on, “said Mayor London Breed in a statement.
If people return to their offices after the outbreak ends, San Francisco will recover and return to normal, the report said. "On the other hand, when office tenants and their employees decide that the cost benefits of working longer at home - or moving completely - outweigh the loss of productivity, expensive office and real estate markets like San Francisco face an uncertain future."
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