Pay-As-You-Go Program

Over the 10-year timeframe of this Capital Plan, the City will fund many of our ongoing annual needs with funds from the San Francisco General Fund, the primary source of the Pay-As-You-Go Program (“Pay-Go”). The General Fund is comprised of various taxes collected by the City, which include property, sales, business, and hotel taxes, and is the primary funding stream for many City programs and services. The General Fund is an appropriate funding mechanism for capital because San Francisco residents, businesses, and visitors alike benefit from investments in local infrastructure.

Improvements paid through the Pay-Go Program tend to be smaller in scale than programs that require debt financing over a multi-year period. By using the Pay-Go Program for short-term improvements, the City is less reliant on debt financing and ultimately spends less to deliver those projects.

San Francisco has long sought a permanent source to support Street Repaving, the largest line item in the Pay-Go Program. A 2016 sales tax measure that would have accomplished this goal failed at the ballot. Soon thereafter, the State of California passed Senate Bill 1 (SB1), the Road Repair and Accountability Act of 2017, discussed further below. Street Repaving is one of the eligible uses for SB1 funds, and this complementary source has enabled San Francisco to fund its Pay-Go Program at the Plan-recommended level in every budget since its passage. Going forward, SB1 Street Repaving dollars will be considered along with the General Fund as a source for the Pay-Go Program.

For more information on the Pay-Go Program, please see Chapter 2: Introduction.