San Francisco’s Proposition C is a tax aimed at top-earning businesses in the city, similar to the one passed and then rescinded by Seattle earlier this year. The money raised by Prop. C would double the city’s budget to fight homelessness, already the highest for any city in the country at $300 million. So did it pass last week?
The answer is yes according to proponents of the measure and maybe not according to critics who are expected to file a lawsuit claiming it fell short of a required two-thirds majority. The San Francisco Chronicle explained the controversy last week:
San Francisco voters passed Proposition C by a wide margin Tuesday night, turning on a fountain of tax money to pay for expanded homelessness programs starting next year. But those programs are going to have to wait a while — possibly years.
On Wednesday, Controller Ben Rosenfield sent a letter to Mayor London Breed and the Board of Supervisors indicating that the city won’t spend the hundreds of millions of dollars Prop. C would bring in annually until a prickly legal dispute is resolved. The tax money will be collected, but it will sit in reserve…
For more than two decades, since voters approved Proposition 218, passing a new tax measure where the proceeds are used for specific purposes has required a two-thirds majority. But last year, a memo from the city attorney’s office interpreting a recent state Supreme Court ruling argued that proposed tax measures put on the ballot by citizens — and not government officials — required only a simple majority to pass. On Tuesday’s ballot, Prop. C required 50 percent plus one vote to pass.
The San Francisco Department of Elections had about 139,000 ballots left to count as of Wednesday morning. Prop. C, which was at 60 percent yes votes, would need to pick up nearly seven more percentage points to be insulated from a similar legal challenge. That appeared unlikely.
In sum, the proponents say that with 60% support Prop. C easily passed the simple majority threshold required for a proposition put on the ballot by a citizen. But opponents argue a two-thirds majority (67%) is needed to pass any measure that spends money on a specific issue like homelessness.
Confusingly, there is already a lawsuit over a similar proposition which was also named Prop. C. That case has been intertwined with another proposition, Prop G, which raises money for California teachers’ salaries. But courts have not reached a decision in either case.
So depending on what the courts decide to do with the other Prop. C and with Prop. G, it would either give the go-ahead for the new homeless spending authorized by the new Prop. C or kill it entirely. But in the meantime, the city can’t risk spending any of the money it raises through the new tax. Why not? Because if they spend $300 million and then the courts decide the measure actually required a two-thirds majority, the city would probably be required to pay that money back. So for the foreseeable future, this is on hold. And given that the lawsuits could drag out past next year, it could be on hold for a very long time.
Here’s what I wonder. What happens if, two years from now, the city has collected $600 million and then the courts decide the Prop actually failed to pass? It’s really hard to imagine the city paying that money back to the businesses that paid it out in the first place. There would be outrage in the streets.
Finally, the other issue here is whether this money, even if is eventually approved and spent, is going to help solve the homeless problem in the city. Mayor London Breed, who was elected on a promise to clean up the streets, was against it. She argued, in part, that the additional spending could wind up drawing homeless people from other areas up and down the coast. LA, Portland, and Seattle all have serious problems with homelessness. There’s a real chance that winning this battle could actually make things worse for San Francisco in the long run. If so, will the proponents admit they were wrong and rescind the tax? Or will they just argue it wasn’t high enough in the first place? I guess we’ll find out in a few years.