Tensions are escalating in San Francisco as the Chamber of Commerce prepares to combat a union-backed tax initiative that aims to increase the city’s Overpaid Executive Tax. On Monday, the Chamber announced it has secured nearly $1 million to support a countermeasure for the upcoming June ballot. This financial backing is part of a broader effort to challenge the Stand Up for San Francisco coalition, which seeks to fund essential public services through increased taxation.
The San Francisco Chamber of Commerce expressed its determination to advance a business-friendly proposal, positioning it as a necessary response to a labor-backed initiative projected to generate approximately $200 million annually. “We still have commitments coming in, and we are confident in our capacity to gather signatures and proceed with our campaign,” stated David Harrison, the Chamber’s director of public policy.
The deadline for submitting petitions for the June ballot is February 2, 2024. Harrison emphasized that the business community is reluctant to pursue a ballot initiative but feels compelled to act against the union’s measures. He noted that the Stand Up for San Francisco coalition is actively gathering signatures to support its tax hike proposal.
In a recent communication, the Chamber and Advance SF, another business group, urged union leaders to resolve the dispute amicably. They highlighted the potential consequences of a tax increase on local businesses and the broader economy. The letter stated, “We are fully prepared to qualify and pass our measure if the sponsors of the labor community’s measure do not remove theirs. We hope that it does not come to this.”
In response, Sarah Perez, a city employee and vice president of IFPTE Local 21, criticized the Chamber’s actions, suggesting they aim to preserve tax cuts benefiting large corporations. “The Chamber of Commerce is pouring huge amounts of money into trying to keep their Trump tax cuts,” she said. The union’s initiative has garnered support from various local organizations, including firefighters and educators, who argue that funding is essential for public services like hospitals and first responders.
The Stand Up for San Francisco coalition, which has raised over $1.34 million from unions such as SEIU Local 1021, is advocating for a tax framework that would adjust the current levy on companies with executives earning more than 100 times the median salary of San Francisco workers. This measure would also factor in employee wages outside the city, reflecting a broader compensation landscape.
Chamber officials argue that the union’s proposal contradicts an earlier agreement among business and labor leaders that led to the successful passage of Proposition M in November 2024. This measure, which received 69.5% support, significantly reduced the Overpaid Executive Tax and aimed to stabilize the business environment.
As the conflict intensifies, the Chamber and Advance SF have submitted two alternative tax-cut proposals to the city’s elections department. One proposal aims to reduce business tax revenue by $300 million, while the other intends to adjust the Overpaid Executive Tax increase, providing tax relief to small businesses.
The Chamber’s correspondence labeled the union-backed initiative as “bad policy,” warning that it could lead to higher consumer prices. They are advocating for collaboration to protect funding for crucial services, including public transit systems in the Bay Area, which may face funding challenges if tax disputes persist.
The ongoing debate over tax measures occurs against the backdrop of a looming $1 billion budget deficit affecting San Francisco. Mayor Daniel Lurie has requested city departments to implement $400 million in ongoing spending cuts. He expressed concern about the implications of the tax dispute on the city’s finances, emphasizing the need for unity among business and labor sectors.
In a statement, Lurie highlighted the importance of the collaborative spirit demonstrated in the passage of Proposition M. “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,” he stated. The mayor’s office has indicated that securing a responsible budget and improving municipal services remains a top priority, alongside a potential parcel tax measure for the November ballot aimed at supporting the San Francisco Municipal Transportation Agency.
The outcome of this tax battle could significantly shape the financial landscape of San Francisco, impacting both local businesses and essential public services as stakeholders navigate the complex interplay of fiscal policy and community needs.
