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Prop. C approved by voters, but opponents say city will never get funds for homeless services

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Kelly Cutler, right, with the Coalition on Homelessness and other Prop C advocates arrive at the traditional Election Day lunch at John’s Grill on Tuesday, Nov. 6, 2018. (Kevin N. Hume/S.F. Examiner)

By far the most controversial measure on the local ballot, San Francisco’s Proposition C was passing Tuesday night with early 60 percent of the vote, but opponents vowed the city would never get the funds the measure promised to generate for homeless services because it failed to reach a two-thirds majority.

The business tax measure, which prompted a battle of words between tech titans Marc Benioff and Jack Dorsey, would generate $250 to $300 million a year for homeless and mental health services through a tax ranging from 0.175 to 1.5 percent on businesses with more than $50 million in gross annual receipts. At least half of that amount would be dedicated to permanent housing, another 25 percent to mental health services, 15 percent to homelessness prevention and up to 10 percent to short-term shelters.

Placed on the ballot through a signature drive by the Coalition on Homelessness and affiliated groups, the measure, dubbed “Our City, Our Home,” required only a simple majority to pass.

However, without a higher two-thirds majority, it could face legal hurdles. Other tax measures placed on the ballot through the initiative process have been challenged in court, including the Universal Childcare for All measure on San Francisco’s June ballot, on the grounds that they should require the higher threshold to pass.

No on C campaign spokesman Jess Montejano said San Francisco was unlikely to “ever see a penny that Proposition C promised” because the measure failed to reach the two-thirds threshold.

“It is abundantly clear that voters want a consensus approach and solutions to San Francisco’s homelessness crisis,” Montejano said. “The Yes on C campaign’s lack of an inclusive process came to be its ultimate downfall. Proposition C was full of empty promises from the start.”

Supervisor Rafael Mandelman, a supporter of Prop. C, said it probably failed to reach a two-thirds majority due to the lack of political consensus around it, but remained optimistic about the ultimate outcome of any legal battle.

“I think it would’ve been nice if there were greater unity from the elected city family,” Mandelman said. “I’m hopeful we’ll get through whatever legal challenges we’ll have to face.”

The Chamber of Commerce and some businesses aggressively opposed Prop. C, arguing that it does not include a clear plan or accountability and that it could lead to the loss of jobs or even prompt companies to leave the city. Mayor London Breed also opposed the measure, and criticized current city spending on homelessness, arguing that the city should conduct an audit before it seeks more funding.

Salesforce CEO Marc Benioff, a frequent philanthropic benefactor of city programs, dismissed such claims, throwing his considerable financial and personal support behind the measure. He clashed publicly with Twitter and Square CEO Jack Dorsey over the measure, lending an element of celebrity drama to the debate.

Benioff tweeted a victory statement Tuesday night, saying the measure’s passage “means the homeless will have the home & help they truly need!”

“Let the city come together in Love for those who need it most! There is no finish line when it come to helping the homeless. Thank you amazing supporters of Prop C!” Benioff tweeted.

The controller’s report did find the measure would cause a net loss of up to 875 jobs over the next 20 years, but called the impact small in comparison to the overall economy and noted that many of the companies affected are already benefiting from recent tax cuts made by the Trump administration.

Other Measures

Proposition A appeared to be passing overwhelmingly with 81.9 percent of the vote. The least debated measure on the ballot, it authorizes the city to issue $425 million in bonds to finance repairs and upgrades to the Embarcadero Seawall and other infrastructure and utilities in the area in preparation for earthquakes, floods and rising sea levels. The measure requires a two-thirds majority to win approval.

Proposition B appeared to be passing with 56.7 percent of the vote as of 10:30 p.m. The measure, known as the “Privacy First Policy,” would amend the city charter to add guidelines for personal information protection policies that would govern city entities and contractors, among others.

Proposition D, a local marijuana business tax, appeared to be passing with 65.98 percent. The measure would tax marijuana businesses with gross receipts over $500,000 at a rate of between 1 and 5 percent, including those not making online sales physically located in San Francisco, but would exempt retail sales of medical marijuana. Officials estimate the tax could generate between $2 and $4 million for the city’s general fund in 2019 and between $7 and $16 million annually from 2021 onward.

Proposition E appeared to be passing with 74.2 percent of the vote. The measure, placed on the ballot by the Board of Supervisors, would reallocate 1.5 percent of the funds generated by an existing hotel tax toward arts and cultural services.

Nuala Sawyer, Joe Fitzgerald Rodriguez and Joshua Sabatini contributed to this report.

For more Examiner election coverage go to:
http://www.sfexaminer.com/sf-votes-november-2018-election-coverage/

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