Even before the Covid-19 pandemic hit city revenues and spending plans, the San Francisco city budget was several hundred million dollars short. But at the end of March, the city announced it was projecting a deficit for its two-year budget of at least $1.1 billion and possibly as much as $1.7 billion. The primary culprit was a drop in hotel and transfer taxes.
Calling the coronavirus pandemic an immediate threat to public health, Mayor London Breed said, “We’re doing everything we can to slow its spread and save lives, but we know that it is also having a major impact on our economy and our city’s revenue. … Over the coming weeks and months we will be focused on supporting our residents who have [lost] their jobs or their business, while continuing to advocate for more state and federal support. We all need to work together to make the hard choices to get through this and to get San Francisco back on the road to recovery.”
City leaders said that the estimated shortfall did not take into account additional expenditures related to San Francisco’s response to the pandemic, nor did it try to factor in new state or federal dollars that might offset these emergency costs.
A lack of federal help is a real possibility after U.S. Senate Majority Leader Mitch McConnell said he was in favor of letting states and local governments declare bankruptcy rather than receive a federal bailout.