Published on January 19, 2024, 1:24 am

San Francisco’s budget deficit could escalate to $1.4 billion, as per official warnings due to the city grappling with an intensified homelessness and drug epidemic. A considerable number of businesses have left their urban office spaces and stores, leading to a booming open-air drug market that has restrained the tax revenue which the city once relied on.

During a recent budget presentation, Mayor London Breed’s Budget Director, Anna Duning mentioned the criticality of the current situation. According to her, “We’re in a tough spot”. It is predicted that by 2027, the city may be staring at an overwhelming deficit of close to $1.4 billion. The approaching fiscal year beginning in July already exhibits a shortfall of around $245 million, which is expected to exceed half a billion dollars next year.

Furthermore, San Francisco’s financial distress compounds due to varied reasons such as dropping tax revenue from sales, hotels, businesses parking and property transfers by approximately 20%. Additionally, as tourism never fully recovered after the pandemic blowout it only added fuel to the spark. “What we encountered during the pandemic was indeed a seismic shift in this city’s economic foundation”, commented Duning.

The soaring healthcare costs for employees contribute largely towards growing city expenses too. This expense reportedly surged almost 10% this year alone while about 25,000 city workers’ contracts are due for expiry by the end of June.

Initially Mayor Breed had proposed increased spending focusing especially on tackling homelessness and bolstering police department funds but was later seen instructing city departments in December regarding potential perimeter cuts on their budgets by close of 10%.

Amidst all this chaos Connie Chan supervisor confirmed that “the decisions we make today will have significant implications not just for this fiscal year but also for those following”.

Profound repercussions from rampant crime associated with rising homelessness and drug addiction marks San Francisco caught up within these turmoils already for years now. Despite efforts being made, the city faces an uphill battle to alleviate the unfolding humanitarian crisis on its streets.

The homelessness situation has deteriorally swelled further from the pre-pandemic time. Statistics reveal a shocking number of approximately 38,000 people homeless in Bay Area on any given night – a tally that’s risen 35% since 2019. Specifically within San Francisco itself, over 7,000 people are homeless.

Adding to these woes is a fatal drug crisis abjected by fentanyl with notable rise in fatal overdoses experienced last year. Tellingly, between January and November alone, a record number of drug overdose-related deaths were documented at 752 more than any other year as per preliminary data.

Lastly encompassing the overall crime rates for last year, there was dip, nevertheless specific categories of crime saw an upturn specifically car thefts as shown by San Francisco Police data. Comparatively even before the pandemic struck in 2019 multiple criminal activities have seen heightened activity including murders, robberies and arson among others.