Controller says six-month report narrows gap by about $62 million; shortfall now ~$200 million

The San Francisco Controller's Office told the Budget & Finance Committee that a six-month review shows an estimated $62,000,000 improvement in the city's current-year ending general fund balance, narrowing the mayor's projected shortfall to about $200,000,000.

Michelle Ehlersmith, presenting the controller's update, attributed most of the upside to stronger-than-expected property-tax receipts (driven by the Assessor's recent work to clear an enrollment backlog and to rapidly enroll changes in ownership and new construction) and improved business-tax collections. She also cited higher-than-projected revenue at the Department of Public Health, noting a larger patient census and additional Medi-Cal revenue.

Ehlersmith cautioned that several revenue streams are volatile nd difficult to forecast (transfer taxes were highlighted as one example). She said the city is not planning any reserve deposits now and expects budget-stabilization reserves to be about 9.3% at year end, short of a 10% target.

The Controller's Office listed recent supplemental appropriations: $1,300,000 approved for immigration legal services and a pending $2,500,000 supplemental for street cleaning and to reappropriate funds for overtime overspending. The office warned that federal tax reform and hospital revenue volatility could change projections and said it would issue a joint update with the Mayor's Office and the budget analyst soon, with another update planned around May 10.

With no substantive questions from the committee and no public comment, Chair Supervisor Malia Cohen moved to file the hearing; the motion was seconded and adopted without objection.

The Controller's report will be updated in the coming weeks and will feed into preparation for the mayor's two-year budget the committee will consider later in the cycle.