SAN FRANCISCO (Map, News) - Newly released projections put The City’s shortfall for next fiscal year at $338.4 million — more than $100 million larger than predicted just five months ago.

The City will have nearly $160 million less available to balance next year’s budget, according to a report jointly released Friday by the Mayor’s Office, the Board of Supervisors Budget Analyst and the City Controller’s Office.

The budget deficit projected for the 2008-09 fiscal year — which begins July 1 — is a result of increased personnel costs and losses at the local and state level, according to the report.

The report said city officials will have just $7.6 million available at the end of this year to help balance next year’s budget.

The report also notes an outlay of $117.7 million for annual wage increases negotiated in current labor contracts and the loss of $41.1 million in funds The City had expected to receive from the state.

Additionally, spending increases — such as the opening of two new pods at the county jail after a court ruling determined the Sheriff’s Department could not allow prisoners to sleep on the floor — contributed to the budget deficit, according to Mayor Gavin Newsom’s budget director Nani Coloretti.

“That’s one our biggest problems,” Coloretti said. She said a “gagillion factors” contributed to the financial shortfall.

The deficit is expected to cost hundreds of city employees their jobs. Newsom directed his department heads Tuesday to cut salaries by an additional 8 percent.

Department leaders have until March 28 to resubmit budget proposals identifying salary cuts by eliminating filled or vacant positions. The City employs approximately 27,000 people.

Newsom had already placed a hiring freeze on city departments and asked heads to determine 13 percent in cuts in November 2007, when the anticipated budget deficit for the coming fiscal year was $229 million.

In February, when the Controller’s Office issued its six-month report on the city budget, Newsom announced $18.1 million in program and service cuts.

Departments with minimum staffing levels such as the police and fire departments would likely suffer less fallout from Newsom’s request to cut salary budgets, Coloretti said.

dsmith@examiner.com

Comments from Examiner Readers

9:52 PM MST on Thu., Mar. 27, 2008 re: "OT costing city millions"

Examiner Reader said:
Some people are forced to work overtime while other people can't find good work. Can't laws and policies be adjusted to make bringing in new people (full-time, part-time, job-sharing, temporary, etc.) cost less than mandating overtime?

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2:11 PM MST on Wed., Mar. 26, 2008 re: "City�s pruning may begin at the top"

Examiner Reader said:
Do the Stupervisors make over $150K? If not maybe they can lower the limit and get rid of themselves.

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9:09 AM MST on Wed., Mar. 26, 2008 re: "City�s pruning may begin at the top"

Examiner Reader said:
I believe this when its actually implemented. Between employee uninons and civil service status, it makes it difficult to terminate anyone at city hall.

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10:54 AM MST on Sat., Mar. 22, 2008 re: "Budget deficit balloons $100 million in latest projections"

Examiner Reader said:
Why doesnt the mayor ask his good friends the Gettys to help him close the deficit? Or better yet all of the wealthy eliteists in this city who help push the liberal programs that get us into this mess.Dont put measures on the ballot unless you can provide the funds to pay for them. Lets stop the madness and start running our govt more like a business and not a non profit org!

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