An unexpected windfall of $50 million in property taxes is a boon for city coffers, though it just offsets other revenue shortfalls and will not be able to save city jobs.
With less than a month left to balance The City’s budget, San Francisco officials on Thursday announced a $50 million windfall in property tax revenue. City Assessor Phil Ting said that, initially, The City expected to generate $125 million in increased property tax revenue this fiscal year. Yet, Ting’s department worked in overdrive to chip away at a backlog of property taxes owed to The City, resulting in the additional money.
Half the $50 million will go toward the general fund, Ting said Thursday at City Hall. The general fund pays for such things as police and fire and salaries for city workers.
The remaining money will go toward other services, including BART and Muni, officials said.
Last week, Ting announced that the transfer-tax revenue had increased by more than 24 percent compared to last year, a signal of an upward trend in the real estate market.
However, the increase in property tax revenue is directly tied to the boost in housing and commercial development in the Mission Bay and South of Market neighborhoods, Ting said.
But with the good budget news comes the bad: Today, City Controller Ben Rosenfield is expected to release a nine-month report on city revenue, showing a decline in both hotel and payroll taxes.
As of Monday, payroll taxes were off by 12.5 percent compared to last year and hotel tax dropped 6 percent from last year, he said.
“It’s significantly worse than expected,” Rosenfield said, adding that he projects better fiscal news early next year.
But the increased property taxes will only offset other declining revenue, said Tony Winnicker, Mayor Gavin Newsom’s spokesman. In other words, this windfall won’t save jobs next year, Winnicker said. Newsom is in the process of closing The City’s $483 million gap with furloughs for city workers, service cuts and as many as 425 layoffs.
“Any extra revenue is great. At the same time, we have news on other fronts that aren’t nearly as bright,” Winnicker said. “We still face difficult choices in the next few weeks.”