Mayor London Breed Releases Update To Five-Year Financial Plan For The City And County Of San Francisco

San Francisco Mayor London Breed
San Francisco Mayor London Breed

January 03, 2020, San Francisco, CA — Mayor London N. Breed today announced the release of San Francisco’s Joint Report Update to the Five-Year Financial Plan for Fiscal Years (FYs) 2020-21 through 2023-24. The Joint Report, released by the offices of the Mayor, the Controller, and the Board of Supervisors’ Budget and Legislative Analyst, projects that while the City will experience continued growth in tax revenues over the next four years, the cost of City services will outpace growth in tax revenues, resulting in ongoing structural deficits.

The projected deficit for the upcoming FY 2020-21 and FY 2021-22 budget represents a meaningfully higher deficit than the City has faced in the last two budget cycles. If the City does not take corrective action, the projected gap between revenues and expenditures will increase from a deficit of $195 million in FY 2020-21 to approximately $630 million by FY 2023-24. The City’s budget deficit for the upcoming two fiscal years, FY 2020-21 and FY 2021-22, is projected to be approximately $420 million.

The Joint Report Update projects that revenues will grow each year, but that they are not growing fast enough to keep pace with the projected increase in expenditures. As a result, a gap between revenue and expenditures will remain despite continued, but slowing economic growth. Slowing growth is consistent with recent financial results, regional housing, and infrastructure constraints, and the risk posed by the length of the current economic expansion. At 125 months, the 2008-2019 economic expansion is the longest in modern US history. Although the projections do not assume nor predict a recession, the persistent gap between revenue and expenditures would only be exacerbated in the event of the next economic slowdown or recession.

The Five-Year Financial Plan projects that available General Fund revenue sources will increase by $424 million, or 6.9%, over the next four years. In comparison, total expenditures are projected to grow by $1.1 billion, or 17.1%, over the same time period, including $408 million in employee salary, pension, and benefit-cost growth; $315 million in citywide operating cost increases; $163 million in baseline and reserve growth; and $169 million in other departmental operating cost increases.

The Mayor must submit a balanced two-year budget to the Board of Supervisors by June 1, 2020. Over the course of the next six months, the Mayor will work with City departments, the Board of Supervisors, and other partners to bring costs and revenues into alignment in order to balance the projected deficit for FY 2020-21 and FY 2021-22.

San Francisco Administrative Code Section 3.6(b) requires that by March 1 of each even-numbered year, the Mayor, Controller’s Office, and the Board of Supervisors’ Budget and Legislative Analyst submit an updated estimated summary budget for the remaining four years of the City’s Five-Year Financial Plan. The next full update of the City’s Five-Year Financial Plan will be submitted in December 2020.

Content retrieved from: https://sfmayor.org/article/mayor-london-breed-releases-update-five-year-financial-plan-city-and-county-san-francisco

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