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Committee hears federal tax‑reform risks and approves $9.6M supplemental to backfill IHSS and HIV funding
Summary
Supervisors received briefings on federal tax bills that could cap SALT deductions, eliminate private activity bond tax benefits and cut health funding; committee approved and forwarded a $9.6M supplemental (largely for IHSS backfill) and a corrective resolution authorizing accelerated draws on private activity bond proceeds to protect affordable housing projects.
The Committee held a combined Federal Select hearing and considered multiple related items focused on federal tax reform and immediate local consequences.
Controller’s and budget office staff described pending congressional proposals that would cap or eliminate the state and local tax (SALT) deduction and could repeal tax‑exempt private activity bonds (PABs). The presentation noted that San Francisco filers claimed roughly $2.1 billion in SALT income tax deductions in 2015 and warned that SALT changes would disproportionately affect higher‑income households and could raise costs for new homebuyers. Analysts also flagged risks to the Low‑Income Housing Tax Credit, historic rehabilitation credits and local government refinancing tools.
Department of Public Health staff described possible implications for health programs if the individual mandate or Medicaid funding were cut, including impacts on CHIP, disproportionate share hospital payments, community health centers and 340B drug discounts. DPH said an estimated 35,000 San Franciscans could be affected by reduced coverage scenarios.
City staff presented a corrective actions resolution authorizing MOHCD and the Mayor to accelerate construction draws, create holding accounts for drawn funds, negotiate with lenders and execute documents needed to preserve tax‑exempt financing and LIHTC equity for projects with undrawn proceeds (the presentation cited roughly $900 million in undrawn proceeds across about 34 city‑financed projects). Committee members acknowledged the urgency and agreed to forward the corrective resolution to the full Board with a positive recommendation.
Separately, Mayor’s budget staff requested a supplemental appropriation of about $9.6 million from a contingency reserve to address immediate fiscal risks: approximately $8.8 million to backfill increased city share for the In‑Home Supportive Services (IHSS) program driven by state policy changes, about $700,000 to cover half a year of reduced CDC HIV prevention surveillance funding, and roughly $72,000 for DACA fee waivers. The Budget Legislative Analyst recommended approval; the committee forwarded the supplemental to the full Board with a positive recommendation as a committee report.
The committee filed the federal hearing and moved the corrective actions and supplemental forward for full‑Board consideration.
