Press Release

Mayor London Breed and Board President Norman Yee call for consensus business tax effort

Letter issued requests City Controller Ben Rosenfield convene collaborative, data-driven effort to develop a ballot measure for the November 2020 ballot.
July 03, 2019

Mayor London N. Breed and Board of Supervisors President Norman Yee sent a letter yesterday to City Controller Ben Rosenfield requesting his office convene a collaborative, data-driven process to develop a measure for the November 2020 ballot to comprehensively address the City’s business tax system. This effort would focus on the City’s current gross receipts tax structure, which was put in place by voters in the November 2012 election. That 2012 ballot measure, which was approved with over 70% of the vote, also came out of an effort led by the City Controller.

“We need a collaborative, data-driven approach to make sure our business taxes are working for everyone and generating the revenue we need to fund critical city services,” said Mayor London Breed. “By bringing together all stakeholders and leading a consensus process, the Controller can help guide a measure that will ensure we have a stable and progressive business tax that addresses some of the challenges of our current system, including impacts on small businesses. Working together, we can come up with solutions that work for our City, our residents, and our businesses.”

“The City has grown exponentially over the past few years. Our tax structure can help us manage the growth and ensure that we have sufficient resources to address the infrastructure and social service needs that come with a growing and changing population. We can and should examine all the options with a specific focus on the impacts and needs citywide, not just district by district,” stated Board of Supervisors President Norman Yee.

Mayor Breed and Board President Yee requested that the proposition for November create a more efficient tax system while also ensuring that the system is fair and equitable, including for small businesses. The effort would also identify ways to generate additional revenue to address the cost of housing and homelessness, support youth and families, improve behavioral health, and enhance the City’s public transportation system.

The letter can be read here.

“To be fair and reliable, our local business tax system needs to keep pace with our dynamic economy,” said Supervisor Vallie Brown. “It has to facilitate economic equality as much as job creation—it’s all about balance, and that’s what this broad stakeholder process will support. Our economy depends on it.”

“I commend Mayor Breed and President Yee for initiating this effort to develop a gross receipts tax reform measure for the 2020 ballot,” said Supervisor Rafael Mandelman. “With all stakeholders at the table, this is an opportunity to achieve a consensus approach to raising the revenue we need to meet our City’s most pressing needs. Given our chronic underinvestment in Muni infrastructure, I am particularly hopeful that we will be able to identify funding for the public transportation investments that will finally give our residents the world-class transit system they deserve.”

“Years after transitioning from taxing payroll to gross receipts for the majority of our business tax revenue, there’s much we’ve learned about its impacts, promise, and shortcomings,” said Supervisor Gordon Mar. “There were winners and losers through that transition, and it’s time we look at reform to balance our needs and the needs of our businesses—to give small businesses a fair shake, ensure wealthy corporations pay their fair share, and increase our investments in the most urgent needs facing our City, including homelessness, affordable housing, public transportation, and services for working people and families.”

“The City made a commitment to voters in 2014 that it would undertake a careful analysis of the impacts of our Gross Receipts Tax overhaul and level-up our tax structure in the most equitable way possible, particularly for our small business community,” said Supervisor Aaron Peskin. “We have been meeting regularly with our Controller to discuss next steps for a transparent and comprehensive process that we know must include a broad coalition of citywide stakeholders. It’s a massive and complicated undertaking that even more than number-crunching will require diplomacy and teamwork.”

“I am happy to collaborate with all stakeholders and help spearhead this revamping of our local tax structure to draft a ballot initiative that is equitable and centered on uplifting all San Franciscans,” said Supervisor Ahsha Safaí. “I join Mayor Breed, Board President Yee, and the Controller in the urgency and willingness to make our local tax system more balanced and fair.”

“I am excited the City is taking this important step to help make our tax structure work for all San Franciscans,” said Supervisor Catherine Stefani. “One-off tax measures make it challenging to do business here. We must ensure that we have a tax system in place that both funds the important City services we provide and allows for a thriving economy.”

In 2012, at the request of then-Mayor Ed Lee and then-Board President David Chiu, the Controller worked with a range of stakeholders to develop Proposition E, which began the City’s transition from a payroll tax to a gross receipts tax. Broad-based consensus was secured during the development of the measure, and Prop E passed with 70% of the vote.

Mayor Breed and Board President Yee requested that City Controller Rosenfield work with all necessary stakeholders to develop a measure for the November 2020 ballot. The process for developing this ballot measure will begin later this summer, and the Controller will submit his recommendations for the ballot measure to Mayor Breed by spring of 2020.

“I look forward to working with representatives from both inside and outside of City Hall to analyze our existing tax policies and present possible changes for consideration,” said Controller Ben Rosenfield.