San Francisco Controller Benjamin Rosenfield this week said that the city faces a general fund deficit of $53 million in fiscal 2009-10.

The biggest reason for the shortfall in the $3 billion general fund is continued weakness in tax collections.

Property taxes revenues are expected to be $35 million less than expected due to over 4,000 appeals from property owners who say their property’s value has declined due to the recession. The appeals affect about $29 billion of property.

The city’s payroll tax is also underperforming, the controller said. Payroll taxes are forecast to fall to $24.8 million less than the budgeted amount. Payroll employment in San Francisco was down 9.5% in the first quarter.

The city has $25 million in reserves, but will have to find new revenues or expenditure cuts to offset the remaining $28 million budget shortfall. Mayor Gavin Newsom has told city departments to come up with spending cuts by Dec. 4.

The city expects the budget deficit to get worse next year. Budget director Greg Wagner this week told the Board of Supervisors that he expects a budget deficit “well north of $400 million” for fiscal 2010-11. Lawmakers will have to close that gap because they are required to pass a balanced budget.

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