It’s a rare occurrence that more cities would undoubtedly like to experience. San Francisco has an excess of property tax revenue. Now officials are trying to figure out the best way to spend the money.
How Did it Happen?
Transfer prices were higher than anticipated with far fewer appeals under Prop. 13 in the current boom market. As a result, San Francisco ended up with a surplus of $415 million.
Much of the surplus ($230 million) is earmarked for set-asides and will fund libraries, buses, the city’s rainy day fund, etc. That leaves $185 million for other needs.
Education vs. Homelessness
Educators and parents have been counting on money from a voter-approved initiative to raise teacher salaries and expand services to pay for early education and childcare. Voters approved Prop. G, giving teachers a guaranteed 7% raise every year. However, the initiative is tied up in court. The school district and teachers union are now asking city hall for $60 million of the excess property taxes to make sure those promises are fulfilled.
Other advocates are asking for $170 million to help resolve homelessness and the city’s housing crisis. Prop C sought to raise $300 million a year for homelessness by taxing big companies. That initiative is also held up in court.
San Francisco Supervisors are expected to make decisions on where the tax surplus should go at meetings this month.