SF’s $ 650 million deficit shall be worn out by the federal stimulus. What about subsequent 12 months?




© Paul Chinn / The Chronicle

Metropolis Comptroller Ben Rosenfield works in his metropolis corridor workplace in San Francisco, Calif. On Friday, November 9, 2018.


The federal stimulus bundle prone to be signed by President Biden this week will wipe out nearly all of San Francisco’s projected $ 650 million price range deficit over the subsequent two years, saving Metropolis Corridor from having to make cuts. painful providers and layoffs – but.

Whereas the federal stimulus is a boon to the economic system within the brief time period, it is not going to resolve the entire metropolis’s monetary woes. The last word restoration of San Francisco relies upon closely on how rapidly components of the native economic system rebound, from vacationers visiting the town to staff returning to downtown places of work.

And not using a substantial return from lodge, gross sales and enterprise taxes, metropolis comptroller Ben Rosenfield stated the Mayor of London Breed and the Supervisory Board would seemingly be grappling with a shaky price range over the subsequent few years. years.

“That would be the large uncertainty over the subsequent couple of years,” Rosenfield stated in an interview final week. “How rapidly will the economic system get well? And, within the brief time period, a lot of it will depend on how rapidly well being situations will enhance. “

State and native help is a part of a $ 1.9 trillion federal stimulus bundle that may also present cash for public transportation, vaccine distribution, prolonged unemployment advantages and 1,400 stimulus checks for these incomes $ 75,000 or much less.

The stimulus bundle – which the Home may vote on as early as Tuesday – will put about $ 600 million into San Francisco’s coffers over the subsequent two years, Rosenfield stated. This leaves Mayor London Breed and the Supervisory Board with a $ 50 million gap to fill, a fraction of what they had been getting ready for.

“We nonetheless have an issue,” stated Jeff Cretan, spokesperson for the mayor. “We simply do not have an issue proper now.”

San Francisco’s economic system has slowly recovered in current months, as actions corresponding to indoor and out of doors eating have resumed. However downtown San Francisco stays desolate and devoid of workplace staff, exhibiting how badly the town’s native economic system has been battered by the pandemic.

Rosenfield stated enterprise taxes would seemingly undergo lots this 12 months as downtown workplace staff will proceed to work remotely. Tourism is unlikely to return to pre-pandemic ranges for a couple of years, he stated. He additionally expects some downtown places of work, inns and companies to enchantment their property assessments this 12 months, which might affect the quantity of tax income the town has to spend.

“It is essential,” Rosenfield stated. “Property taxes are our major supply of tax.”

No matter challenges lie forward, the stimulus is sweet information for metropolis leaders who had been getting ready to make substantial price range cuts this 12 months.

Metropolis corridor realized in December that it may face one other deficit of $ 653.2 million over the subsequent two years, having already closed a deficit of $ 1.5 billion within the fall. This was as a result of weaker-than-expected earnings progress within the enterprise and tourism sectors, will increase for metropolis staff, and elevated spending wanted to reply to COVID-19.

The town realized in December that it had a surplus of $ 125 million for the present 12 months as a result of increased than anticipated property tax revenues, elevated federal rebates and decrease spending. However that was just for the present 12 months.

Breed has ordered each division within the metropolis to provide you with cuts to chop budgets by 10% over the subsequent two years. These cuts may have had notable impacts, starting from fewer 911 operators to fewer trial attorneys within the public defender’s workplace.

If he needed to reduce his price range by 10%, the Emergency Administration Division stated it ought to have reduce its time beyond regulation price range. The ministry stated it will affect its means to reply 911 calls in lower than 10 seconds, and a few folks must wait longer than a minute for a dispatcher to reply their name.

The Public Defender’s Workplace stated in its proposal that it must fireplace round 23 attorneys, which might lead to “a major discount within the illustration and provision of authorized providers to indigent folks of shade.”

Now, these cuts most likely will not should occur on such a dramatic scale. However Supervisor Matt Haney, chairman of the price range and finance committee, stated he would nonetheless evaluate among the departments’ price range proposals to see the place the town can get monetary savings.

“I anticipate a lot of the stimulus, assuming versatile, shall be used to fill our deficit, which can completely scale back the extent of cuts wanted,” Haney stated. “However some reductions are nonetheless wanted and will occur.”

The price range course of, which can unfold over the subsequent few months, is prone to be fraught with tensions between the mayor and the board, which frequently conflict with politics, priorities and funding selections.

The mayor and council have already argued over how this 12 months’s $ 125 million surplus needs to be spent.

Whereas they agreed on how most of it was to be spent – corresponding to a small enterprise grant and mortgage program, and commerce charges and license deferral – they disagreed on an enormous piece.

The mayor wished to spend $ 50 million to make up for price range cuts deliberate by the Division of Public Well being, which is probably not as pressing as a result of stimulus. In the meantime, the council wished to spend the cash on different tasks like a free summer season camp for all public elementary faculty youngsters and a reform bundle to cope with the opioid disaster within the metropolis.

Haney stated the proposals mirrored the town’s pressing wants. However Breed was not thrilled about them, as among the proposals would require continued funding.

“We can’t proceed to introduce dietary supplements with pet tasks and no matter is on everybody’s incredible Christmas checklist that isn’t essentially used to maintain the folks of this city,” stated Breed. final week.

She stated her precedence was to ensure San Franciscans do not feel the affect of the town’s price range issues. With the relaunch imminent, she stated the town would seemingly be in a “good place” to keep away from any painful cuts.

“If the board cooperates,” she stated, earlier than transferring on to a different query.

Trisha Thadani is a author for the San Francisco Chronicle. E-mail: [email protected] Twitter: @TrishaThadani




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