Good afternoon sf.citi members,
I am writing to you with a few important updates on the Stock-Based Compensation Tax and the Traffic Congestion Mitigation Tax following today’s Budget and Finance Subcommittee meeting.
Supervisor Mar’s Stock-Based Compensation Tax (IPO Tax)
sf.citi is pleased to share that Supervisor Mar has decided to pull the Stock-Based Compensation (IPO) Tax from the November 2019 ballot. He intends to place a similar measure on the November 2020 ballot. The proposed new measure will be announced next week and has been reported as a general tax, which, unlike the anticipated November 2019 tax, does not need 2/3 approval for passage.
As San Francisco’s City Controller’s Office’s Economic Impact Report highlights, Supervisor Mar’s original proposed IPO Tax would have “largely focused on the city’s technology sector, which has grown rapidly over the past decade”. Compared to other potential taxes directed at the City’s tech sector, “the proposed tax can be faulted on efficiency, administrability, and stability grounds. It has a higher economic cost than comparable alternatives; it would have a higher administrative burden, and would be a more unstable source of revenue”.
We look forward to working with Supervisor Mar and his office to develop a comprehensive plan that aligns with the city’s goals and Mayor Breed and President Yee’s recent ‘GRT’ announcement
As mentioned in a previous memo, sf.citi polled public response to the IPO and CEO Tax – both of which have been removed from the November 2019 ballot – and their ability to pass in 2020. Our EMC Research-conducted poll found that both the IPO and CEO Tax would not meet the minimum 2/3 threshold for passage. Ultimately, Supervisor Mar’s IPO Tax polled at 60% approval while Supervisor Ronen and Haney’s CEO Tax polled at 56% approval
In terms of next steps, Supervisor Mar intends to introduce his new measure next week. According to the Chronicle, he will continue to “meet with the group of labor and community groups who back the Stock Compensation Tax, known as the ‘Shared Prosperity Coalition,'” to “look comprehensively at strategies for addressing economic inequality, including reviewing and recommending further tax reforms.”
Supervisor Peskin’s Traffic Congestion Mitigation Tax (TNC Tax)
At today’s Budget and Finance Subcommittee meeting, Supervisor Peskin’s TNC Tax was approved to be heard at an upcoming Board of Supervisors meeting with a recommendation to pass.
San Francisco City Controller’s Office’s Economic Impact Report on the TNC Tax was also released this morning. The report concluded that the “REMI results indicate an average negative economic impact over 20 years, of 190 jobs, and a $25 million reduction to the City’s GDP” but noted this analysis did not include benefits associated with reduced traffic congestion. City Controller Ben Rosenfield stated, “In my opinion, it would result in an annual tax revenue increase to the City of approximately $30 to $35 million”. On the subject of autonomous vehicles, the report concluded it was premature to include AV’s in the TNC Tax as the “future impact of AV’s on congestion is unclear.” The report further noted that “this future technology will generate no revenue in the near term” based on the fact that there are currently no mobility services that offer paid rides via AV’s in San Francisco.
While Jen is out on vacation, feel free to reach out to me with any questions. Thank you for your continued membership and support.
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