Severe budget deficit looms in San Francisco


In August, San Francisco supervisors and Mayor Gavin Newsom agreed on a $6.6 billion budget that closed a $575 million deficit. Despite steep cuts to many city departments and hundreds of layoffs, officials said core city services had been preserved.

"We were cut to the bone then," Chiu said. "At this point, we don't have anything to cut but bone. It's going to be the most challenging budget situation that anyone has ever seen (in San Francisco)."

Newsom's budget director is expected to announce the deficit projections for the next fiscal year later today.

Chiu declined to speculate on which city departments may be hit the hardest. The cuts could be announced by the mayor at the end of this year and would then have to be approved by the board.

"I think virtually everything is going to be on the table," he said.

Chiu said he would fight to protect "essential, core services" such as police, fire and health services to the city's most vulnerable, including seniors, the homeless and the mentally ill.

The city is also facing a revised budget deficit, of $53 million, for the current year that must be resolved in the coming weeks.

On Wednesday, the California Legislative Analyst's Office projected a $20.7 billion state budget deficit for fiscal year 2010-11.

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