UPDATE: The San Francisco Chamber of Commerce has just announced a major offensive against labor unions, launching a campaign with nearly $1 million in funding to fight a proposed tax hike on high earners. This development intensifies the ongoing battle over business taxes in San Francisco as the deadline for submitting petitions for the June ballot looms on February 2, 2024.
The Chamber’s initiative is a direct response to the Stand Up for San Francisco coalition, which is backed by multiple labor unions, seeking to increase the city’s Overpaid Executive Tax. Chamber Director of Public Policy, David Harrison, expressed confidence in securing additional commitments that would support signature-gathering efforts for their countermeasure. “We have full confidence that we have funding to gather signatures and move forward with the campaign,” he stated.
The proposed union measure is projected to generate approximately $200 million annually, aimed at bolstering essential government services as San Francisco faces a nearly $1 billion budget deficit over the next two years. Harrison emphasized that businesses are reluctantly forced into this ballot measure battle, stating, “We do not want to pursue a ballot measure, but we are being compelled to do so.”
Tensions escalated when a letter was sent from the Chamber and another business group, Advance SF, urging labor leaders to resolve this conflict amicably. “We hope that it does not come to this,” the letter read, underscoring the desire for cooperation rather than division.
In stark contrast, spokesperson Sarah Perez from IFPTE Local 21 criticized the Chamber’s efforts, highlighting that they are backed by former President Donald Trump’s tax cuts. “The Overpaid CEO Act is gaining support every day… because we know that our city needs funding now more than ever,” Perez declared, alluding to endorsements by local firefighters and educators.
The Stand Up for San Francisco coalition is gaining momentum, having secured over $1.34 million in funding from organizations like SEIU Local 1021. Their measure aims to adjust the tax structure for companies whose highest-paid employees earn more than 100 times the median salary in San Francisco. This would also consider employee wages outside the city, where compensation tends to be significantly higher.
As the conflict deepens, the Chamber argues that the union’s measure contravenes a prior agreement related to Proposition M, a successful business tax reform passed in November 2024, which significantly lowered the Overpaid Executive Tax. Harrison asserted that both business groups submitted two tax-cut proposals to the city’s elections department, with plans to select one for advancement.
One proposal aims to cut business taxes by $300 million, while the alternative would introduce a less aggressive increase to the Overpaid Executive Tax. Chamber officials have labeled the union-backed measure as “bad policy” that would ultimately raise consumer prices.
Meanwhile, city officials, including Mayor Daniel Lurie, have expressed concern about the ongoing tax dispute’s potential effects on city finances. Lurie has called for $400 million in budget cuts and is focused on ensuring a responsible budget moving forward. “San Franciscans came together to pass Prop M last year so our businesses big and small have the stability to thrive,” Lurie stated, emphasizing the need for unity between business and labor to address shared priorities.
As both sides prepare for a contentious battle over the June ballot, the outcome could significantly impact the financial landscape of San Francisco. The urgency of the situation cannot be understated, with critical decisions on funding essential services hanging in the balance.
Stay tuned for further updates as this story develops.
