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Housing tax measure failing, while competing childcare measure remains too close to call

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Supervisor Norman Yee speaks at a campaign event for Prop. C. (Kevin N. Hume/S.F. Examiner)

A measure that would have taxed the gross receipts on commercial rents to pay for housing and homeless services failed to win approval Tuesday night, while a competing measure that would subsidize childcare using the same revenue source remained too close to call.

Proposition D, placed on the ballot by Supervisor Ahsha Safai, sought a 1.7 percent gross receipts tax hike on office space rents to pay for housing and homeless services. It required a two-thirds majority to pass, but in the night’s first returns, it was rejected by 55 percent of voters.

Proposition C, which was placed on the June 5 ballot by Supervisors Norman Yee and Jane Kim to address a growing waitlist for childcare spaces and increase the quality of care in childcare institutions, would raise an estimated $150 million annually by hiking The City’s commercial gross receipts tax by 3.5 percent.

As of 11 p.m., Prop. C was just barely passing with 50.3 percent of the vote, and remained too close to call for certain. Unlike Prop. D, Prop. C requires only a simple majority to win approval.

Because the two measures targeted the same source of funding, they could not both take effect. Prop. D contained language requiring that if both measures pass, only the one with the most votes would take effect, meaning voters were effectively forced to choose between childcare and housing services.

Opposition to Prop. C included the San Francisco Libertarian Party and the San Francisco Chamber of Commerce, who cited mounting tax burdens on San Francisco’s businesses.

The early care and education measure would expand eligibility for affordable early care services to more families. Some 2,500 children are on waitlists for childcare services, the vast majority of them under the age of three.

Yee said that revenue from the tax will not only be used to clear those lists, but also increase wages for the early childcare workforce, which are currently low enough to force many in the field to rely on public benefits.

San Francisco’s commercial rents gross receipts tax is currently the lowest in the country, according to measure proponents.

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