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What Sales Tax Data Tells Us About the Uneven State of San Francisco’s Economic Recovery

Written by Kevin TruongPublished Apr. 13, 2022 • 3:10pm
Sales tax data is a major indicator of economic activity, as shown by its dramatic drop nationwide in 2020 due to the pandemic.

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Sales tax data is a major indicator of economic activity, as shown by its dramatic drop nationwide in 2020 due to the pandemic.

Case in point: San Francisco’s total sales tax revenue dropped by more than 46% between 2019 and 2020, from $165 million to $88 million.  

However, while sales tax data has rebounded in many areas across the state last year, San Francisco’s lagging numbers have proven to be an outlier. 

In 2021, the city saw $119.7 million in sales tax revenue–an increase from 2020, but still 27.4% below pre-pandemic numbers. 

While each supervisorial district in San Francisco showed a general drop in sales tax revenue in 2021 compared to 2019, breaking the data further sharpens the picture of how the pandemic affected sales activity in neighborhoods versus downtown, and activity has bounced back more quickly. 

Anecdotal evidence has described a general shift in economic activity away from the city’s downtown core as office workers transition to remote or hybrid schedules. 

Drilling into the data bears some of that assumption out: The biggest decline in sales tax revenue was seen in the zip code 94111, which encompasses parts of the Embarcadero and the Financial District. The area showed a precipitous 58% drop between 2019 and 2021, falling from $8.3 million to $3.4 million. 

The surrounding zip codes have also seen drops in similar scale. Neighboring zip codes like 94105, which includes part of SoMa, and 94014, which is in the heart of the city’s downtown, have seen a 46.5% and 51.2% decline respectively.

So where are things looking up? Only two zip codes, according to the data, generated more sales tax revenue in 2021 compared to 2019.

The largest jump was seen in 94130, which includes Treasure Island. That area saw sales tax revenue increase by 34% from $182,000 to $244,000. The other zip code that saw an increase was 94134, which includes Visitacion Valley, Portola and most of John McLaren Park, which saw its sales tax rise by 3.4% from $714,000 to $738,000.

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Areas only seeing minor single-digit decreases include 94131, which includes Glen Park, 94127, which includes St. Francis Wood and West Portal and 94118, which includes the Inner Richmond.

Ted Egan, the city’s chief economist, said the staggered recovery is due in part to the outmigration that has occurred during the pandemic.

According to data released last month by the U.S. Census Bureau, San Francisco lost around 6.3% of its population, equivalent to some 54,800 people, between July 1, 2020, and July 1, 2021.

“There’s your sales tax base,” Egan said. “San Francisco and New York City were real outliers in terms of how much rents have dropped. When the data comes out a few months  later, it’s showing that the population drop was behind that decline in rents.”

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