Advocates rallied Tuesday against a lawsuit threatening to slow down — and potentially invalidate — an initiative that will subsidize early childcare and raise the wages of workers in the field.
Proposition C, or the Universal Child Care for all Act, which would raise taxes on commercial real estate rents by 3.5 percent, passed in June with 50.87 percent of the vote. It was challenged in a lawsuit filed last month by pro-business organizations.
“The very people who have benefited from 40 years of corporate property tax loopholes under Proposition 13, who benefit the most from …. Bush and Trump tax cuts and who [face] the lowest commercial property rent taxes in the nation are denying our youngest children the same quality of life to meet their full potential that their children would benefit from,” said Mary Ignatius of San Francisco Parent Voices.
An attorney representing the groups in the lawsuit could not be reached for comment by press time. The lawsuit describes the tax as a “punitive” measure that threatens to reduce commercial property values by an estimated 12 percent in San Francisco.
Those at the rally also called upon the City, which is is named in the lawsuit, to move ahead with implementing the initiative. The tax increase is mandated to go into effect on January 1 and the Board of Supervisors Rules Committee is expected to take the first steps toward implementation on Wednesday.
The tax is expected to raise more than $140 million annually. On Tuesday, workers in the early childcare field described a dire need for pay hikes in the industry and for services to be made more accessible to San Francisco’s low income families.
“We are struggling to survive economically every day. Wages for our workforce have not kept up with the increasing costs of this city,” said Gretchen Ames, an early childcare advocate and educator. “Most of us struggle to make half of what K-12 education teachers make, and they don’t even make enough. Prop. C is designed to help us increase our economic ability to stay here.”
The lawsuit is challenging the threshold by which Prop. C passed. While The City maintains that the measure was placed on the ballot through a petition signed by voters, it only requires a simple majority to pass, the business groups maintain it is a “special tax” and therefore subject to a constitutionally mandated two-thirds majority requirement.
Sara Hicks-Kilday, director of the San Francisco Child Care Providers’ Association, said on Tuesday that if successful, the lawsuit could make “raising revenue harder to do.”
“We have been recognizing the increasing wealth divide and know that we need to do that. It’s low income workers that are really feeling it,” she said.
It is unclear if the lawsuit could impact other tax measures — past and future — that rely on a simple majority threshold for passage.
Proposition G, a $298 parcel tax that also passed in June, will raise San Francisco Unified School District educator wages with a fixed, 7 percent add-on annually.
“It’s not clear to me that it would affect us..it would require the law change not only moving forward but go retroactive back in time…there is some question if that can be done legally,” said Hicks-Kilday.
Susan Solomon, executive vice-president of United Educators of San Francisco, adding that the salary increase provided by Prop. G “has been a positive factor in attracting new educators and retaining current educators” in the school district.
Solomon called the lawsuit over Prop. C “a shame.”
“This is really is one of the quintessential battles of our time — fair taxation,” she said. “We are asking corporations and individuals who make a lot of money to contribute to the public good by paying their fair share of taxes.”
The Our City Our Home initiative (also known as Proposition C) on the November ballot, which proposes a .5 percent tax on San Francisco business making more than $50 million annually, also requires only a simple majority to pass.
Jennifer Friedenbach, director of the Coalition on Homelessness and one of the measure’s main proponents, said that she is hopeful that the voters’ will — and The City’s legal defense — will prevail.
“I think it’s really important to remember that San Francisco has a well-resourced city attorney. When we are doing things in pursuit of justice, we have been sued before and won,” said Friedenbach. “We got sued around health care for San Francisco, and over gay marriage — this is yet another example of San Francisco just taking a leap and doing the right thing.”
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