Le­gal chal­lenge likely for San Fran­cisco tax

Porterville Recorder - - RECORD - By JANIE HAR

SAN FRAN­CISCO — San Fran­cisco vot­ers ap­proved a tax on the city's wealth­i­est com­pa­nies Tues­day in an at­tempt to al­le­vi­ate home­less­ness in a place where res­i­dents at risk of be­ing priced out rou­tinely en­counter peo­ple sleep­ing on the streets.

De­spite op­po­si­tion from the mayor and some busi­ness lead­ers, about 60 per­cent of vot­ers sup­ported Propo­si­tion C, but it was fall­ing short of a two-thirds ma­jor­ity that would ward off lit­i­ga­tion. Crit­ics say it's a "spe­cial tax" ded­i­cated to spe­cific needs and so un­der state law re­quires more than the sim­ple ma­jor­ity re­quired for a general tax.

Threat of le­gal ac­tion didn't dampen the joy of pro­po­nents, in­clud­ing bil­lion­aire Marc Be­nioff, whose fi­nan­cial sup­port up­ended the dy­nam­ics of the cam­paign and ticked off other prom­i­nent tech lead­ers.

Be­nioff, whose cloud­com­put­ing com­pany Sales­force is the largest pri­vate em­ployer in the city, do­nated at least $8 mil­lion to the cause. He went against Mayor Lon­don Breed, who said the mea­sure lacked ac­count­abil­ity and con­sen­sus. He got into Twit­ter fights with Twit­ter and Square chief ex­ec­u­tive Jack Dorsey and Zynga chair­man Mark Pin­cus over their re­spon­si­bil­i­ties to San Fran­cisco.

"Prop C's vic­tory means the home­less will have a home & the help they truly need! Let the city come to­gether in Love for those who need it most!" Be­nioff tweeted Tues­day night.

No on C spokesman Jess Mon­te­jano chas­tised pro­po­nents of the mea­sure for fail­ing "to earn the twothirds voter sup­port nec­es­sary for San Fran­cisco to ever see a penny that Propo­si­tion C promised."

San Fran­cisco's out­come was the op­po­site of what oc­curred ear­lier this year in Seat­tle, where city lead­ers re­pealed a pro­posal to tax busi­ness for home­less­ness ser­vices after push­back from Star­bucks and Ama­zon. The City Coun­cil of Cu­per­tino in Sil­i­con Val­ley scut­tled a sim­i­lar head tax pro­posal after op­po­si­tion from its largest em­ployer, Ap­ple Inc.

A mea­sure to raise $6 mil­lion a year from a per-em­ployee tax passed eas­ily Tues­day in Moun­tain View, an­other Sil­i­con Val­ley city. The tax, most of which will be paid by Google, will go largely to ease con­ges­tion.

Home­less­ness has be­come a driv­ing is­sue along the West Coast as grow­ing num­bers of well-pay­ing tech jobs and a his­tory of un­der-build­ing prices out mid­dle-class and lower-in­come peo­ple from the tight hous­ing mar­ket.

A fam­ily of four in San Fran­cisco earn­ing $117,000 is con­sid­ered low-in­come. Some streets are so filthy from used sy­ringes, en­camp­ment de­tri­tus and hu­man waste that of­fi­cials launched a spe­cial "poop pa­trol."

Propo­si­tion C would raise up to $300 mil­lion a year, nearly dou­bling the city's cur­rent annual $380 mil­lion spend­ing to com­bat home­less­ness, from a to­tal city bud­get of $10 bil­lion.

The mea­sure would levy the tax mostly by rev­enue rather than by num­ber of em­ploy­ees — an av­er­age half­per­cent tax in­crease on com­pa­nies' rev­enue above $50 mil­lion each year. Be­nioff says Sales­force would pay an ad­di­tional $10 mil­lion a year.

"I think that Be­nioff's en­dorse­ment and his money helped im­mensely to get the mes­sage out, but be­yond that, the home­less­ness is­sue is some­thing that San Fran­cis­cans see ev­ery day," said Jen­nifer Web­ber, a po­lit­i­cal con­sul­tant who was not in­volved in the con­test.

Even though Breed's po­si­tion lost, "she will be the ben­e­fi­ciary of the fund­ing that is com­ing from the mea­sure," Web­ber said.

As mayor, she also will be even more ac­count­able for ad­dress­ing home­less­ness in San Fran­cisco if hun­dreds of mil­lions of dol­lars in fund­ing comes her way.

Breed said in a state­ment Wed­nes­day that she would work with both sides to de­liver on the mea­sure's goals and ad­dress any le­gal un­cer­tain­ties.

"The vot­ers sent a clear mes­sage that they want an in­crease in fund­ing to help meet this ur­gent chal­lenge," she said.

Cal­i­for­nia's con­sti­tu­tion calls for "spe­cial taxes" put on the bal­lot by elected of­fi­cials to pass a twothirds thresh­old, but courts have not ruled on whether that re­quire­ment ap­plies to tax mea­sures backed by cit­i­zen ini­tia­tive.

City At­tor­ney Den­nis Her­rera said in a state­ment that his of­fice will de­fend Propo­si­tion C if it is chal­lenged in court since it was backed by a clear ma­jor­ity of vot­ers.

He is cur­rently ask­ing the Su­pe­rior Court to ver­ify that tax ini­tia­tives put on the bal­lot by vot­ers need only a sim­ple ma­jor­ity. The ques­tion is in ref­er­ence to a par­cel tax for teach­ers that San Fran­cisco vot­ers ap­proved in June.

A sep­a­rate June mea­sure that raised rev­enue taxes on com­mer­cial rents for child­care ser­vices is also pend­ing in court be­cause it did not meet the twothirds thresh­old.

San Fran­cisco's trea­surer plans to col­lect the new tax for the 2019 tax year, al­though the money will be held in a sep­a­rate ac­count un­til it can be spent, said city Con­troller Ben Rosen­field in a memo is­sued Wed­nes­day.

AP FILE PHOTO BY ERIC RIS­BERG

In this Oct. 2, photo, San Fran­cisco Mayor Lon­don Breed lis­tens dur­ing a news con­fer­ence in San Fran­cisco.

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