San Francisco’s Deficit Swells to $780M in Newest Signal of Funds Misery

San Francisco’s finances deficit is predicted to worsen amid uncertainty about federal reimbursements and the tempo of town’s financial restoration.

In new projections issued by the Controller’s Workplace late Friday, finances analysts pegged the finances deficit for the upcoming fiscal yr at $290.9 million, $90.1 million greater than town’s final projection in January.

For the upcoming two fiscal years, the Controller’s Workplace expects a shortfall of $779.8 million, $51.5 million greater than was projected in its January report.

Within the coming weeks, the Mayor’s Workplace, metropolis departments and the Board of Supervisors will start hammering out the small print of town’s upcoming two-year finances cycle in what is predicted to be a contentious session marked by critical belt-tightening.

In December, Mayor London Breed ordered metropolis departments to chop 5% from their budgets within the subsequent fiscal yr and put together for the opportunity of additional cuts as town’s longer-term financial prospects come into focus.

The Controller’s Workplace cited uncertainty about reimbursements from the Federal Emergency Administration Company (FEMA) as one issue within the worsening fiscal outlook. Different elements included diminished actual property switch taxes, given the affect of upper rates of interest on property gross sales.

The workplace’s enterprise tax projections stay largely unchanged versus its January report, although analysts adjusted their expectations for workplace vacancies—a significant factor within the metropolis’s fiscal image with potential ramifications for property, enterprise and gross sales tax income over time.

The analysts now assume workplace emptiness to peak at 33% in fiscal years 2025-2026, versus the prior report’s peak of 28.8% within the prior fiscal yr.

Annie Gaus may be reached at [email protected]