Tech CEOs spar over S.F.’s Prop C
Measure would tax billion-dollar companies to help pay for homeless services
SAN FRANCISCO >> In a city where the massive influx of highly paid technology workers has been blamed for driving up housing prices and exacerbating homelessness, the question of who should pay for a solution has sparked a politically divisive ballot measure to tax big companies to generate $300 million a year for homeless services.
San Francisco’s Proposition C reflects a broader phenomenon, rooted in the belief that the Bay Area’s booming technology companies should pay more taxes to help cities battle everything from the growing homelessness crisis to terrible traffic.
In Mountain View, voters are being asked to approve a per-employee “head tax” on business to raise money for congestion-cutting trans-
portation projects. The biggest share of the tax would be paid by Mountain View’s largest employer, Google.
If San Francisco’s or Mountain View’s taxes on business win voter approval Tuesday, similar levies are likely to spread to other Bay Area cities, says Mountain View Mayor Lenny Siegel, a proponent of his city’s tax plan.
“This will be something that we expect cities with a lot of tech employment to look at,” Siegel said. “When we need more money, we always think of the little guy. Now we have an opportunity … to tax those entities that have more money than they know what to do with.”
Unlike Mountain View, where Google has not publicly opposed the tax plan, some of San Francisco’s tech CEOs are waging a high-profile fight — against each other.
On one side is Salesforce CEO Marc Benioff, who has donated $2 million in support of Prop. C. His company has poured nearly $6 million more into the campaign, finance records show.
“Unfortunately, some C.E.O.s still embrace a myopic view & believe that they have a fiduciary duty to shareholders alone, with little or no responsibility to the communities in which they do business,” Benioff sneered in a tweet Wednesday that he has retweeted — and retweeted.
On the other side is Twitter CEO Jack Dorsey, who has been fighting back on behalf of the other company he leads, mobile-payments firm Square. After Benioff publicly called on Dorsey to disclose how much he and his firms have spent supporting services for homeless people, Dorsey shot back on Twitter: “Marc: you’re distracting. This is about me supporting Mayor @LondonBreed for *the* reason she was elected. The Mayor doesn’t support Prop. C, and we should listen to her.”
Lyft, Stripe and Visa also have contributed thousands to defeat the measure.
Meanwhile, Chuck Robbins, CEO of San Jose-based Cisco, is among those listed as endorsing Prop. C. Cisco this year pledged $50 million over five years to help end homelessness in Santa Clara County.
Prop. C’s “gross receipts tax” would nearly double what the city spends on housing and homeless services by applying a complex formula to a company’s worldwide revenues, accounting for type of industry, office locations and size. Only companies with more than $50 million in gross receipts would be affected, and in general, larger businesses operating mostly in the city would pay more. Half the new revenue would be spent on permanent housing, a quarter would be used for mental health services for homeless people, and the remainder would fund homelessness prevention and short-term shelters.
That bothers Dorsey, who has spent $125,000 fighting the measure, with Square kicking in $50,000, according to campaign finance data.
Late last month, Dorsey tweeted that the tax was unfair to Square and other financial technology startups, such as Stripe, an online payments company that has donated $400,000 to oppose the measure, records show. He said it could force Square to pay more than $20 million next year, while Salesforce — a much larger company — could pay less than $10 million.
Mayor London Breed said in a statement that Prop. C would harm the local economy and lead to the “inevitable flight of headquarter companies — and jobs — from San Francisco to other cities in the Bay Area, or other states.”
Breed highlighted her administration’s work, citing increases in shelter and mental health care beds, spending on facilities for people on the brink of homelessness, and cooperation with state lawmakers and leaders of neighboring regions.
The Coalition on Homelessness, which created Prop. C, said the city’s priority should be on housing the thousands of people who are suffering on the streets.
“If it does pass, street homelessness would be dramatically reduced,” said Sam Lew, a policy director for the coalition.
But Breed and the San Francisco Chamber of Commerce worry that without effective action on homelessness across the region and state, Prop. C would have the opposite effect, turning the city into a magnet for struggling people.
“You’re going to spend this huge amount of resources and have a continuous cycle of homeless people … coming into San Francisco and lining up for those services,” said Jim Lazarus, senior vice president for public policy at the chamber, which opposes the initiative.
San Francisco’s homelessness crisis and its problems with piles of human waste and used syringes have shot into higher profile over the past few years, although the number of homeless people has hovered around 7,000. Development and cleanup crackdowns have forced homeless people out of hidden areas while a heroin epidemic has hit the downtrodden hard, Lazarus said.
U.S. Sen. Dianne Feinstein, D-San Francisco, said in a statement that she would back “virtually any homeless plan . ... We have to help. When you see someone lying — and I just did — on a hot sidewalk, sleeping with nothing, that’s not the United States of America. And particularly, if they happen to be an addict, an alcoholic, or medically ill.”
New federal corporate tax cuts have helped bolster the argument that companies should pay more into their communities, Mountain View’s Siegel said. “There’s a sense that the companies have the money and they even have more money … so they can afford to pay,” he said.
San Francisco resident and lawyer Dennis Vann hasn’t yet made a final decision on how he’ll vote but is “almost leaning against” Prop. C. “It’s just throwing more money at the problem,” said Vann, 64. “Put money into mental health.”
Anna Morrow, who blames tech firms for her displacement from an apartment to the streets and now to a public housing project, thinks Prop. C could help. The 58-yearold former massage therapist and counselor said today’s growing tech industry and rising rents make it impossible for people to get back up after they slide into homelessness.
“I’m going to be living in public housing for the rest of my life,” she said, standing on the sidewalk a few blocks from Twitter’s headquarters. “The tech industry should definitely have to shoulder some of that responsibility.”