San Francisco is facing a significant budget deficit projected to reach $1.4 billion by 2027, with a $245 million shortfall expected for the upcoming fiscal year.
The city’s revenue from various sources has dropped by roughly 20%, largely due to the economic impact of the pandemic and a decline in tourism.
Rising employee costs, particularly healthcare expenses, and tough negotiations for 25,000 city workers’ contracts add to the financial strain.
“This is not going to be a positive presentation today. We’re in a tough spot,” budget director Anna Duning said.
“What we saw during the pandemic was a seismic shift in the economic foundation of this city,” Duning said.
“The decisions we make today, in this fiscal year and in the next fiscal year, is actually really critical,” Supervisor Connie Chan said.
Mayor London Breed initially proposed increased spending on homelessness and the police department but later instructed city departments to prepare for 10% budget cuts.
The city is also grappling with a homelessness and drug crisis, with homelessness increasing by 35% since 2019 and a surge in fatal drug overdoses, despite an overall decrease in crime.
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