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OCO fund receipts $22 million above budget, staff tell oversight committee
Summary
Staff reported the OCO fund brought in $296 million for FY24‑25, $22 million more than the $274 million budgeted; the committee was told the variance is primarily driven by larger‑business gross receipts tax filings and that the extra funds must be appropriated before departments can spend them.
Staff reported to the San Francisco Oversight Committee on Homelessness that actual receipts for the OCO fund in fiscal year 2024–25 totaled $296,000,000, $22,000,000 higher than the $274,000,000 the budget had assumed. The increase was attributed mainly to higher‑than‑expected 2024 homeless gross receipts tax filings by large businesses, staff said.
The presenter said the $22 million will be held in reserve until it is appropriated through the city's upcoming budget cycle and is not immediately available for departmental spending. "This money is not ready for it can't be used yet. It needs to be appropriated before departments can spend this money," the presenter said.
Staff emphasized that the variance does not necessarily indicate a broad local economic recovery but is largely driven by how multinational business sales are apportioned to San Francisco for tax purposes. The presenter also reminded the committee that Proposition M, which passed about a year earlier, would not take effect until tax year 2025 and therefore did not drive the current numbers.
Committee members were told that the extra revenue modestly reduces the structural shortfall in the OCO fund but does not eliminate it; staff said an updated revenue projection will be released in January to better inform next year's budget decisions. The presenter noted the information was prepared by the Budget and Analysis Division and the Controller's Office and offered to follow up on detailed questions with departmental analysts.
Next steps: the committee will receive the formal revenue update in the regular January cycle and any appropriation of the $22 million will occur through the city's budget process.
