San Francisco Budget Crisis Worsens Overnight with Obama Budget Announcement
I saw on the teevee this morning that San Francisco's hospitality industry (the lifeblood of our overpriced tourist haven, in case you weren't aware) is hurting and bad. No shit, teevee, tell me something I don't know.
San Francisco's enormous budget deficit for the coming fiscal year has swelled even more in recent weeks due to poor performance by the city's retirement investment accounts and bleak budget news from Sacramento.
The projected deficit for the 2010-11 fiscal year had been $522 million, of which Mayor Gavin Newsom shaved off more than $20 million through his recent midyear cuts. But that small dent has already been negated by news the city must pay $20.7 million more into its retirement system next year than anticipated.
The city planned to contribute 12.1 percent of its total payroll to the retirement system, but the investments are performing so poorly it must instead pay 13.6 percent.
And that's the relatively good news. The same actuarial projections show the city must pay an even bigger percentage every year for the next several years, topping out at 27.3 percent of its total payroll in 2014-15. That's equal to a one-year contribution of $675 million - or more than it takes to run San Francisco General Hospital for a year, said Supervisor Sean Elsbernd.
Elsbernd, who is trying to get a package of major changes to the pension system on the June ballot, said the new numbers are "more evidence than ever that pension reform is needed.
"It's definitely a concern for next year, but we need to be even more mindful of five years from now and 10 years from now," he said.
Adding to the uncertainty over next year's budget is Gov. Arnold Schwarzenegger's threat that without a federal bailout of $6.9 billion, severe cuts to social services will be necessary. President Obama's new budget includes giving California $1.5 billion.
Hold on, I'm no CPA but let me crunch those numbers real quick...
The CA "budget" assumes a federal bailout of $6.9 billion while the federal "budget" includes a federal bailout of $1.5 billion. Busting out the trusty calculator, it appears as though the state is... uhh... $5.4 billion short. OH SNAP! Where oh where will that be coming from?
Dr CA budget Cr your ass?
I'm not 100% on that journal entry. As I said, I'm not a CPA.
Too bad, California, you really should try having your own printing press. It works out awesome for the federal government.
To hear the Fed Beige Book tell it, San Francisco (or more generally, the 12th District) is kicking ass:
San Francisco - Economic activity rose slightly. Holiday sales were up compared to 2008. Demand for commercial real estate continued to fall while the housing market appeared "largely stable." Financial institutions reported stable loan demand but further declines in credit quality. High unemployment and limited hiring plans kept wage pressures away. Most Fed contacts are expecting productivity gains to continue into 2010, holding down hiring even if demand for certain products rises.
But do you really want to listen to what Janet Yellen's people have to say? That's what I thought.
Hey, who cares? The economy is fixed, right? Place your bets on California tax refunds being hijacked again in 2010, kids. I give CA State Controller John Chiang until March. They love to put this crap off until the very last minute possible as we already know. Oh well. Smart California residents jacked up their exemptions LAST year when they kidnapped our tax refunds. Duh.