San Francisco, where the unemployment rate is just 3.2 percent and the typical home sells for more than $1 million, is facing a budget shortfall that will reach $848 million in five years, Bloomberg News reported yesterday. Increases in pension payments and other payroll costs are driving the gap, according to a five-year financial plan, despite a measure voters approved in 2011 that aimed to cut employee-retirement bills. San Francisco officials, who will present an updated fiscal blueprint this week, say that they can adjust spending to balance their books, as well as gird for cuts the federal government may implement. Yet the predicament, even in a city known for wealth, underscores the financial challenge for states and cities around the country that have to make good on promises to police officers, teachers and other civil servants. "I do think there will be another conversation in the not too distant future about what is affordable for the city and our employees for pensions," said Controller Ben Rosenfield. "I don’t think where we are is where we need to end up."
