While the revenue from a voter-approved tax on big companies in San Francisco to fund homeless services is held up by ongoing litigation, The City is poised to ask businesses to voluntarily pay now in exchange for a 10 percent discount.
The Board of Supervisors Budget and Finance Committee approved legislation Wednesday that would create a discount program for the voter approved Proposition C, the “Our City, Our Home” measure, which taxes businesses’ gross receipts in excess of $50 million.
The tax would generate $300 million annually for homeless services and housing.
Litigation, however, has cast it and two other taxesinto jeopardy, with opponents suing over the question of whether a tax measure can pass with anything short of two-thirds of the vote. Prop. C was approved by 61 percent of the voters in November.
The legal decision on the measure may take three years to resolve, according to Mayor London Breed’s policy director Andres Power, and in the meantime the mayor wants to encourage businesses impacted by the tax to voluntarily pay now.
The tax break would last until the legal issue is resolved or Jan. 1, 2024, whichever comes first.
Power said that while they have had conversations with companies about the proposal, no one has committed to it.
Budget analyst Severin Campbell said the cost impact is dependent on knowing how many participate, but if everyone did, it would mean a $30 million tax break annually, 10 percent of the estimated total tax revenue the measure is expected to generate.
Jennifer Friedenbach, executive director of the Coalition on Homelessness, which drafted the tax measure and led the campaign, said those behind Prop. C are meeting Monday to discuss an official position on the legislation, which was introduced by Breed and Supervisor Vallie Brown, but she suspects there will be support.
Power noted that the tax is being collected from businesses “but the controller is not authorizing the use of those funds given the litigation risks. So funds are sitting in a bank account while people in our streets suffer.”
He added, “The individuals experiencing homelessness today need our help today and they cannot wait for three years.”
The full board will vote on the proposal next week.