Controller reports $41.6M projected year-end balance; property transfer tax weakness highlighted

Ben Rosenfield, San Franciscos controller, briefed the Budget & Finance Committee on the offices nine-month budget status report, saying the city currently projects a roughly $41.6 million general-fund balance at fiscal year end — about $34 million better than earlier estimates.

Rosenfield said the city is seeing above-budget growth in property taxes, hotel tax (roughly 12.6% growth), business registration and sales tax, but that property transfer tax collections have softened markedly. "We're projecting at this point only about $91.6 million in property transfer tax," Rosenfield said, and noted the volatility of high-dollar commercial transactions that had inflated prior-year totals.

On the spending side, Rosenfield highlighted ongoing shortfalls in several departments (including the Sheriff and Elections) and improvements at Public Health relative to prior projections because of increased revenue recognition. He also reviewed key reserve figures: the rainy-day fund balance is projected at about $117.6 million at year-end, and departments have generated a citywide savings incentive reserve of roughly $7.94 million.

Rosenfield summarized the budget implications for next year: the extra one-time positive balance and reserves reduce next year's shortfall by roughly $34 million, but revenue weakness in property transfer tax and other ongoing pressures still leave a sizable multi‑hundred-million-dollar gap in the FY2008-09 outlook. He also described the rules governing rainy-day withdrawals for the school district under the voter initiative and provided an initial estimate ($18–19.7M) of eligibility should the city decide to act.

Next steps: Controller's office will issue revised revenue letters accompanying the mayor's budget in early June; the committee asked for additional detail on convention facilities rent waivers and other fund-specific items.