After failing to win support from the small business community for a measure that would have helped it and fearing a well-funded attack from large corporations, Board of Supervisors President David Chiu today made the motion to reject his business tax reform ballot measure.
Labor leaders have also raised concerns about not having enough resources to fight for several revenue measures on the November ballot, mostly because they are focused on approving a hotel tax increase, supporting progressive supervisorial candidates, and defeating Jeff Adachi’s measure to increase how much city employees pay for health care and into their pensions.
“There is still not consensus about whether this should move forward,” Chiu said of his measure, which also suffered from being complicated and not easy to explain in an election campaign. It would have created a more progressive payroll tax structure – increasing taxes on large corporations and lowering them on small businesses – and a commercial rent tax that also would have exempted small businesses, raising about $25 million for the city and creating hundreds of private sector jobs, according to the city’s Office of Economic Analysis.
But the fear among some progressives is that too many revenue proposals would hurt their individual chances, given that the ballot will now include a hotel tax increase, a real estate transfer tax on properties worth more than $5 million (which the board approved today on an 8-3 vote), a $10 local surcharge on vehicle license fees, and a parcel tax from the Community College District.
So Sup. Ross Mirkarimi today also abandoned his proposal to increase the city’s parking tax from 25 percent to 35 percent, which would have raised about $25 million per year. Both Chiu and Mirkarimi said their measures were good policy and would have raised desperately needed revenue, but they were bowing to political reality.
“We’re challenged by the practicality of mounting a fall campaign around these revenue measures,” Mirkarimi said at the meeting.
The board voted 10-1 to table both measures, with a dissenting vote by Sup. Chris Daly, who said, “I just disagree with that political analysis.” He said voters would consider the measures individually and “I don’t think disappearing a progressive payroll tax and progressive parking tax are going to help the real estate transfer tax.”
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