Updated: Nov 8, 2020
San Francisco voters approved all but one local ballot propositions
The propositions include several new taxes, one $487.5 million bond measure, an overhaul of the planning code to streamline business permits, and several others
The tax propositions could generate hundreds of millions annually, though analyses by the Controller's Office suggest a mixed economic impact
San Francisco voters approved nearly all local ballot propositions on this year's ballot.
Those propositions include five new taxes and one bond measure, Proposition A, which authorizes the city to issue $487.5 million in bonds for capital projects. But given economic damage tied to the pandemic, it's uncertain what the long-term effects of the new fundraising measures will be.
A business tax overhaul placed on the ballot by Mayor London Breed, Proposition F, passed handily. Breed called the overhaul, which repeals the City's payroll tax while increasing gross receipts tax rates by 40%, "key to helping us stabilize right now."
Proposition F carves out some exemptions to the gross receipts tax increase, such as for small business impacted by COVID-19, and also creates a tax "backstop" that unlocks revenue from two taxes passed in 2018. Most businesses in San Francisco pay both payroll and gross receipts taxes, but the City has sought to shift its business tax structure away from payroll taxes in recent years.
"Prop F will help us close our budget deficit and bring badly needed reforms to our business taxes, especially for small businesses," said Breed in a statement on Wednesday.
Other taxes leading by healthy margins as of Wednesday were Prop I, which doubles the property transfer tax rate on buildings valued at $10 million or more; Prop L, which levies an additional tax on companies with large pay disparities between the highest-paid executive and the median local workers; Prop J, which institutes a parcel tax rate of $288 per parcel for SFUSD; and Proposition RR, authorizing a one-eighth per cent sales tax to fund Caltrain operations.
The new taxes are expected to generate hundreds of millions annually, though analyses by the Controller's Office suggest a mixed impact on the economy.
In reports released over the past few months, Controller Ben Rosenfeld estimated that Prop F would generate $97 million in ongoing, annual revenue and 7,000 jobs over the next several years, slightly outweighing job losses in industries impacted by the tax. San Francisco's $13.6 billion budget for fiscal 2020-2021, which closed a budget deficit partly by dipping into the City's emergency reserve funds, was developed with the assumption that Prop F would pass.
Prop I could generate anywhere from $13 million to $346 million annually, according to Rosenfeld, though he noted that transfer taxes are the City's most volatile source of revenue and that the measure could lead to a "variety of tax avoidance behaviors." Rosenfeld also forecast that the higher tax would discourage new housing construction, leading to higher housing costs, downward pressure on wages alongside job losses in the construction and real estate industries.
Prop L, likewise, would amount to a highly volatile revenue source for San Francisco, according to the Controller's Office, though it may generate anywhere from $60 million to $140 million annually. The tax will likely impact a very small base of companies, and comes with a risk of job losses and reduced private sector investment in San Francisco.
The so-called "CEO Tax" would likely target companies like Gap Inc., Wells Fargo and Williams-Sonoma, and is set to increase the already-wide difference in the cost of doing business in San Francisco versus other cities. San Francisco chief economist Ted Egan estimated that the tax could trigger 615 of layoffs concentrated in the financial services and retail trade sectors, which tend to have low average salaries among rank-and-file workers.
Apart from the tax measures, San Francisco voters also approved Proposition H, which revises the City's planning code to streamline permits and allow for more flexible uses for small business.
The only local proposition that was rejected by voters was Proposition G, a proposal that would have allowed 16 and 17-year-olds to vote in local elections. That proposition was narrowly defeated.
A handful of incumbents on the Board of Supervisors, including District 3 Sup. Aaron Peskin, District 9 Sup. Hillary Ronen, and District 11 Sup. Ahsha Safai, were reelected. Myrna Melgar, a former planning commissioner, declared victory in District 7; and in District 1, Marjan Philhour was narrowly defeated by Connie Chan.
Read our the full results here.