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Controller warns San Francisco budget relies on $1 billion in one‑time sources; flags reserve drawdown and downtown tax risks
Summary
City Controller Ben Rosenfeld told the Budget & Appropriations Committee the mayor—s two‑year plan depends on roughly $1 billion of one‑time revenue and would draw down reserves by about 40% versus pre‑pandemic levels if adopted as proposed. He highlighted risks from uncertain business taxes tied to downtown return‑to‑office and volatile transfer taxes.
Ben Rosenfeld, San Francisco—s controller, told the Budget & Appropriations Committee on June 15 that the mayor—s proposed two‑year budget relies heavily on one‑time revenue and carries elevated risks as the city moves beyond the pandemic. "The budget is heavily reliant on one‑time sources," Rosenfeld said, noting roughly $1,000,000,000 of one‑time federal reimbursements, disaster funds, reserves and fund balance underpin the plan.
Rosenfeld and Carol Lou, the controller—s revenue manager, said reserves would be drawn down substantially under the proposal. "If the proposed budget is adopted as proposed, we will have drawn about 40% of our reserves versus our pre‑pandemic level," Rosenfeld said, describing the strategy as a bridge through a still‑uncertain recovery.
The controller—s letter also flagged two structural revenue concerns. First, transfer taxes remain extremely volatile; a small share of high‑value transactions produced unusually large revenues in 2021 and similar windfalls should not be treated as recurring. Second, business tax forecasts hinge on assumptions about how many office workers return — controller staff use a working assumption of a 33% telecommute rate, which lowers business tax receipts versus pre‑pandemic baselines and reduces daytime population‑sensitive revenues like sales and parking taxes.
Supervisors pressed the controller—s office for the evidentiary basis of the telecommute assumption and whether the budget—s reliance on one‑time funds is an acceptable plan. Rosenfeld repeated the office—s view that assumptions are reasonable but stressed the need for active management by both the mayor and the board during the fiscal year.
The committee took the controller—s report under formal action and voted to "hear and file" the hearing record by roll call vote; the motion passed unanimously.
What happens next: Rosenfeld urged supervisors to treat the two‑year spending plan as a managed approach rather than a permanent expansion, and recommended continued monitoring of revenues and additional contingency planning when the board considers adoption later this summer.
