Controller presents joint fiscal outlook warning of severe revenue losses from COVID‑19

City Controller Ben Rosenfield told the Board of Supervisors on March 21 that the city faces steep, rapidly evolving revenue losses tied to the COVID‑19 emergency and the statewide shelter‑in‑place order.

"We call this the joint report," Rosenfield said, describing a coordinated update produced by his office, the board's budget and legislative analyst, and the mayor's budget office. He said the offices are using two scenarios — a shorter, sharper shock with a quick recovery and a more extended downturn with a slower recovery — to frame likely impacts.

The report estimates the current fiscal year will suffer immediate, measurable losses in economically sensitive monthly taxes such as hotel, sales and parking taxes and in transfer taxes. Rosenfield said the joint projection shows a net shortfall in the current year of about $167 million to $287 million after offsets, and general‑fund losses of roughly $300 million to $600 million in fiscal 2020–21 under the two scenarios. "A recession is near certain at this point if we are not already in one," Rosenfield said.

Nut graf: The presentation lays out high and low scenarios, identifies where revenue losses will appear immediately versus later, and flags key unknowns: emergency response costs, retirement fund losses that raise employer contributions in later years, and the form and timing of federal and state relief. Rosenfield urged supervisors to plan for multi‑year shortfalls and noted that while city reserves are at historic highs, they are not sufficient to cover the full range of projected losses.

Rosenfield highlighted recent data showing heavily damaged economic activity statewide, including more than one million new unemployment claims in California between March 13 and March 25. He said Moody's and other forecasters have repeatedly revised GDP projections during the emergency, underlining the high uncertainty facing municipal revenue forecasting.

He identified two buckets of city revenue impact: immediate monthly receipts (hotels, sales, parking, transfers) and delayed impacts (property and business taxes) that mostly surface in the next fiscal year. He described preliminary enterprise‑fund impacts at the Airport and Municipal Transportation Agency as especially severe and said the Port and other funds also face losses.

Rosenfield said the report does not yet include the city's emergency response costs and that the three offices will update the projection in April with estimated response expenses and more department‑level detail. He also noted the joint outlook assumes no budget actions; mayoral or board actions to reduce spending or draw reserves would change outcomes.

Response from supervisors: Supervisors used the committee hearing to press for detail and for options. Supervisor Norman Yee, the board president, and supervisors including Aaron Peskin, Ahsha Safaíe, and Sandra Fewer asked specifically about cash‑flow and reserve use. Rosenfield said reserves (about $590 million across rainy‑day and stabilization funds) will soften but not eliminate multi‑year gaps, and that penalties and interest revenues also matter to cash flow. He said federal stimulus provisions include an allocation for state and local government relief but that allocation's formula and timing remained unclear.

Ending: The joint report will be updated monthly, the controller said, with a fuller April report to include emergency costs, department revenue and expenditure trends, and further refinement of scenarios. The Board's Budget and Finance Committee planned follow‑up work the next day to review the new timeline and next steps for the city budget process.