"San Francisco in a ‘Tough Spot’ as $1.4B Budget Deficit Looms"

This, boys and girls, is the doom loop.

From The San Francisco Standard, January 17:

San Francisco’s annual budget deficit could climb to $1.4 billion by 2027 if costs continue to outstrip revenue flowing into city coffers, according to forecasts presented by city budget experts on Wednesday. 

The mounting gap comes as high office vacancy rates drive down key income sources for the city, including property transfer taxes and business taxes. Meanwhile, salary and benefit costs are set to skyrocket in coming years, according to city projections.

“This is not going to be a positive presentation today. We’re in a tough spot,” said Anna Duning, Mayor London Breed’s budget director, before laying out the soaring deficit forecast.

The fiscal year beginning this July will bring a $245 million deficit, with a $555 million shortage expected the following year. If the city doesn’t take corrective action, according to forecasts, that shortage will grow to a nearly $1.4 billion deficit by 2027.

The growing deficit has grim implications for city services. 

After proposing record spending in 2023, Mayor London Breed asked department heads in December to plan for budget cuts of 10%. Meanwhile, her office has told departments to press pause on hiring new full-time employees outside of key staffing areas related to public safety and essential operations, a move that may exacerbate already-severe staffing shortages across local government. 

Saving money on staffing may prove complex, however, as contracts for more than 25,000 public workers are set to expire June 30....

....MUCH MORE

Previously at the Standard, December 13, 2023:

Facing $800M Deficit, San Francisco Mayor Orders Steep Budget Cuts  

San Francisco Standard home.

This didn't happen overnight. The seeds were being planted when Diane Feinstein was mayor 1978 - 1988 during the boom times and by Gavin Newsom during his time 2004 - 2011. And Covid didn't cause the downturn, it was Newsom's reaction to it in his first year as Governor, with the ridiculous stay-at-home orders, and draconian rules on businesses.

 

And those executive orders and insta-regs were all political, there was no science saying "the thing to do is shut the economy." 

 

And all of a sudden the do-good, feel-good spending was exposed as a first-world conceit that only a city being sent money from around the planet could afford.

Previously (not counting the dozens of stories on San Francisco allowing homeless people to camp and crap on the sidewalks 2014 - 2023):

 

May 2023 "Spiraling in San Francisco’s Doom Loop"

We've been posting on the plight of the homeless in San Francisco for over a decade and on the false front of California's economy for longer than that and it is good to see the reality finally seeping into the nation's conscience/consciousnesses.

From Curbed (New York Magazine)...

June 2023:  "The sad state of office buildings could cause something called the “doom loop.” Yes, the doom loop."

 

August 2023: WaPo: "How the ‘urban doom loop’ could pose the next economic threat"

Took ya long enough.