Controller Michelle Alersma updates city on $35M budget improvement for fiscal year 2023-2024

San Francisco County officials gathered on July 4, 2025, to discuss the six-month budget status report for the fiscal year 2023-2024, revealing a projected improvement in the county's financial outlook. Controller Michelle Alersma presented the report, highlighting an anticipated increase in the year-end balance by approximately $35 million, which would reduce the projected shortfall to about $65 million for the two budget years.

Despite this positive news, the report also indicated significant weaknesses in citywide tax revenues. Property tax projections have decreased by $36 million due to unanticipated assessment appeals, while business tax revenues are expected to fall by $48 million, largely attributed to ongoing litigation and prior year refunds. Additionally, sales and hotel tax revenues have plateaued, reflecting a broader trend seen across California.

On a more positive note, the Department of Public Health reported a substantial increase in revenues, contributing $67 million to the overall budget improvement. This uptick is linked to higher patient census rates and additional state reimbursements. Most departments within the county are operating with net surpluses, although the City Planning department is facing a notable revenue shortfall that may necessitate fee adjustments in future budget proposals.

The meeting underscored the ongoing challenges and opportunities within San Francisco's budget landscape, as officials prepare for upcoming proposals that may include fee increases to address shortfalls in specific departments. As the county navigates these financial complexities, the focus remains on ensuring that the community's needs are met while maintaining fiscal responsibility.