A fierce fight is underway in San Francisco over competing ballot measures that could significantly impact business taxes. The San Francisco Chamber of Commerce announced on Monday that it has secured nearly $1 million in commitments to support a business-backed initiative aimed at countering a union-backed proposal that seeks to increase the city’s Overpaid Executive Tax.
David Harrison, the Chamber’s director of public policy, expressed confidence in the funding, stating, “We still have commitments coming in that will be available towards the end of the month or early January, but we have full confidence that we have funding to gather signatures and move forward with the campaign.” The deadline for submitting petitions for the June ballot is February 2, 2024.
The Chamber claims that businesses are being forced into this ballot battle due to the Stand Up for San Francisco coalition, which is currently gathering signatures for its initiative. This proposal aims to generate approximately $200 million annually for city services. Harrison emphasized that the business community would prefer to avoid a contentious ballot measure but feels compelled to act against the union’s initiative.
In a letter to labor union leaders, including Kim Evon of SEIU Local 2015 and Debra Grabelle of IFPTE Local 21, the Chamber and another business group, Advance SF, urged for a resolution to “an unnecessary and harmful fight” over the measures. The letter expressed a willingness to advance their initiative if the labor-backed measure remains on the table.
The labor coalition responded to the fundraising announcement with skepticism. Sarah Perez, a city employee and vice president for IFPTE Local 21, criticized the Chamber’s motives, stating, “The Chamber of Commerce is pouring huge amounts of money into trying to keep their Trump tax cuts.” She noted that the union-backed Overpaid CEO Act has gained traction, receiving endorsements from various local unions, including the San Francisco firefighters and teachers.
The Stand Up for San Francisco coalition has already raised more than $1.34 million from sources such as SEIU Local 1021 and related political action committees. The proposal seeks to modify the current tax structure imposed on companies whose highest-paid employee earns over 100 times the median salary of San Francisco workers. It would also consider employee wages from outside the city, where compensation is typically higher.
Proponents argue that the tax increase is essential to counteract federal budget cuts that threaten vital public services. They emphasize that the tax hike would only affect companies with over $1 billion in revenue and more than 1,000 employees.
Tensions further escalated as the Chamber accused labor unions of violating an earlier agreement that facilitated the passage of Proposition M in November 2024. This measure, which passed with 69.5% of the vote, significantly lowered the Overpaid Executive Tax.
As a response, the Chamber and Advance SF have submitted two potential tax-cut measures to San Francisco’s elections department. One proposal aims to reduce business tax revenue by $300 million by eliminating scheduled tax increases and increasing the small business tax exemption from $5 million to $10 million. The other measure seeks to adjust the Overpaid Executive Tax increase while providing tax relief for small businesses.
In their correspondence with the unions, the business groups described the union-backed measure as “bad policy,” warning that it could lead to higher consumer prices. They urged collaboration to maintain funding for essential services, especially in light of a projected $1 billion budget deficit over the next two years. Mayor Daniel Lurie has called for $400 million in ongoing spending cuts and expressed concern about the implications of the tax dispute on the city’s finances.
Lurie’s office underscored the importance of a responsible budget and the need for cooperation between business and labor. “San Franciscans came together to pass Prop M last year so our businesses big and small have the stability to thrive and drive our economic comeback,” the statement said.
As both sides gear up for what promises to be a contentious political battle, the outcome will significantly shape San Francisco’s financial landscape and the future of its public services.
