(Bloomberg) -- San Francisco's projected budget gap for the next two years will shrivel to $23 million from the $653 million shortfall expected in January, thanks to the massive federal stimulus plan passed this month, the city's fiscal analysts said in a report Wednesday.
The city of roughly 880,000 people will receive $636 million of one-time federal aid from the package, to be drawn evenly over the next two years, officials said.
The plans show the impact of President Joe Biden's rescue that delivered at least $513 billion to states, local governments, territories, tribal governments, school districts and public transit systems to offset the financial toll of the pandemic. Cities around the country are using funds to bring back workers and close deficits.
“Like other cities and states, our economy and our budgets have taken a huge hit that could have resulted in layoffs and massive service cuts,” Mayor London Breed said in a statement. “Thanks to the American Rescue Plan, we're now able to avoid those terrible choices.”
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The technology hub still faces budget shortfalls over the next five years due to increasing costs from employees and voter-mandated spending on services such as libraries. Deficits add up to $499 million through fiscal 2026, the report said.
The city will adopt a balanced budget for the next two years by August.
“If we're not responsible in this budget cycle, we could find ourselves right back here again in the coming years facing the same terrible choices we have been lucky to avoid this time around,” Breed said.
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