A significant confrontation is brewing in San Francisco as the San Francisco Chamber of Commerce announced it has secured nearly $1 million to support a campaign against a labor-backed tax measure. This development comes as city business interests seek to counteract an initiative aimed at increasing the city’s Overpaid Executive Tax, which is backed by a coalition of labor unions representing public employees.
On Monday, Chamber officials confirmed that they are preparing to place one of two business-supported measures on the ballot for the June 2024 elections. The funding will aid in gathering signatures to qualify their measure, which aims to mitigate the impact of the union’s proposal. According to David Harrison, the Chamber’s director of public policy, “We have full confidence that we have funding to gather signatures and move forward with the campaign.”
The labor coalition, under the banner of Stand Up for San Francisco, is collecting signatures for its initiative, which proponents claim could generate approximately $200 million annually for essential government services. The deadline for submitting petitions to the city’s Department of Elections is February 2, 2024.
In a letter to union leaders, Harrison indicated that businesses felt compelled to pursue a ballot measure due to the union’s actions. “We are fully prepared to qualify and pass our measure if the labor community’s measure is not withdrawn,” the letter stated, urging a resolution to avoid further conflict.
As tensions mount, the unions have responded. A spokesperson for the coalition, Sarah Perez, who is also a city employee and vice president of IFPTE Local 21, accused the Chamber of attempting to protect tax cuts initiated under former President Donald Trump. “The Overpaid CEO Act is gaining support every day, including endorsements from San Francisco firefighters and teachers,” Perez said, emphasizing the necessity for funding to support vital city services.
The Stand Up for San Francisco coalition has reportedly received over $1.34 million in initial funding from the Service Employees International Union Local 1021 and related political action committees. This coalition includes various unions, such as San Francisco Firefighters Local 798 and United Educators of San Francisco, both of which have endorsed the tax measure.
The proposed labor-backed initiative aims to revise the tax calculation for companies whose highest-paid executive earns more than 100 times the median employee salary in San Francisco. The measure would also include wages from outside the city, where pay scales can be higher, and would specifically target companies with more than $1 billion in revenue and over 1,000 employees.
Chamber officials have expressed concerns that the labor unions are abandoning a previous agreement that led to the successful passage of Proposition M in November 2024. This business tax reform, which passed with 69.5% of the vote, significantly reduced the Overpaid Executive Tax without opposition funding.
In response to the business sector’s plans, the Chamber, along with Advance SF, has proposed two potential measures to reduce business tax revenue by $300 million. These measures include canceling scheduled tax increases, increasing the small business tax exemption from $5 million to $10 million, and reducing the annual business registration fee for smaller companies.
The conflict comes at a time when San Francisco is facing a substantial budget deficit of nearly $1 billion over two years. Mayor Daniel Lurie has requested city departments to implement $400 million in ongoing general fund spending cuts. Lurie has expressed concern that the ongoing tax dispute between business and labor could further complicate the city’s financial situation.
The mayor’s office highlighted Lurie’s commitment to reforming the city charter and ensuring a responsible budget that prioritizes funding for public services. “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 read.
In light of these challenges, the Chamber’s letter to the unions called for collaboration rather than division, urging both sides to work together to support Bay Area transit systems and the thousands of union jobs they sustain. The letter proposed that both groups consider withdrawing their measures to honor the agreements made under Proposition M.
As the deadline for ballot initiatives approaches, the outcome of this dispute could significantly impact San Francisco’s economic landscape and the services it provides to its residents.
