November 2020: Vote Yes on Prop F, A Win for San Francisco’s Small Businesses, Children, and Families

Proposition F would change the way SF taxes business, by replacing the payroll expense tax with a more progressive gross receipts tax. A payroll tax sends the wrong signal to businesses, making it more expensive to hire additional employees, at a time when we need to do everything we can to encourage increased employment. 

Additionally, Prop F would have a tax rebalancing effect by decreasing gross receipts tax rates on sectors that have been most impacted by COVID-19 (i.e. retail, hotels, restaurants), while increasing rates for the tech sector to be on par with similar professional and financial services. 

Prop F is estimated to provide tax relief for about 3,000 small businesses, and according to the SF Controller, it would create over 7,000 jobs in 2021 and 2022. The SFLCV sees Prop F as an opportunity to relieve the tax burden on SF small businesses, provide support to sectors hit hardest by COVID, and ensure the tech industry pays its fair share. 

The SF Controller estimates that Prop F would raise approximately $97 million per year in additional revenue for the City. This money is desperately needed to address the City’s budget deficit and would help to fund Muni, youth programs, and the library system.

Prop F also includes an important contingency clause. In 2018, SF voters passed two propositions (June’s Prop C: Universal Childcare for San Francisco Families; and November’s Prop C: Our City, Our Home) that provided funding for early education, childcare, homelessness, and affordable housing. Since 2018, the $930 million that SF has collected has been tied up in litigation, and the City has not been able to use these funds for the antipoverty programs they were intended for. Prop F’s contingency clause would implement backstop taxes for the same amounts, to take effect only if the earlier measures are invalidated by the courts. (On Sept 9, 2020, Our City, Our Home was upheld by the California Supreme Court.) 

Today we are facing a global pandemic, significant economic downturn, and climate change -- and vulnerable children, families, and small businesses are feeling it now more than ever. Childcare centers are on the brink of collapse. The economic downturn is pushing more families into homelessness, and the effects of climate change are worsening health outcomes for low-income communities.

In order to provide support to those that need it most, SFLCV urges you to vote YES on Proposition F.