San Francisco Measure C to fund homeless services still tied up in court

Nearly a year after 61% of San Francisco voters passed Proposition C, a ballot measure to help fund homeless services, the money is still tied up in court.  The measure put an average 0.5% tax gross receipts tax on companies with more than $50 million in annual revenue.  The estimated $300 million from about 400 eligible companies, would go towards homeless programs.

The contentious issue split political leaders and ignited a fierce debate between supporters like Salesforce CEO Marc Benioff and opponents like Twitter’s Jack Dorsey and the Chamber of Commerce. “Throwing more money at the homeless situation isn’t going to solve that,” said Rodney Fong, the president of the SF Chamber of Commerce. “ It takes strategy.  It takes long-term commitment and strategies to solve these problems.  They are not problems that go away quickly.” 

Fong echoed concerns from other critics of the proposition—saying it lacked proper safeguards and audits of how and where they money would be spent.  He said the focus should be on policy and strategy.  The city has been collecting the tax, but won’t spend it, yet. The Howard Jarvis Taxpayers Association sued the city over Proposition C, calling it “an illegal tax that violates decades of constitutionally protected taxpayer rights.” 

The focus of the suit argues the measure required two-thirds of the vote, not the simple majority the city said it did.  The San Francisco County Superior Court recently ruled in favor of the city, the matter will now go to the court of appeals.  City Attorney  Dennis Herrera sent us this statement: “This case has always been about upholding the will of San Francisco voters. We’re pleased the superior court has confirmed that when voters act through the initiative process, a simple majority vote is required. The initiative right is about direct democracy. It is one of the most precious rights of our democratic process.”

In an effort to free up some of the Prop C funds, the city passed an ordinance earlier this year, allowing companies to waive their right to a refund if the measure gets struck down by the court, in exchange for a tax break. The company would get a 10% tax credit on the money the city keeps. Two companies, Salesforce and Postmates have taken the city up on the offer, freeing up nearly $14 million.  This is how the city plans to begin spending the money next year: 

-$1.4 million on shelter beds
-$2 million on problem-solving interventions
-$3.4 million on residential treatment beds for homeless people with behavioral health issues
-$800,000 in rapid rehousing
$6 million in supportive permanent housing 

“Cutting money and cutting checks alone may not be sufficient but it certainly is a necessary first step for relative newcomers as a burrito-delivery business to get involved in a conversation that’s heavy and will take some time to address,” said Vikrum Aiyer, Postmates’ vice president of global public policy. 

He agrees it’s important to develop polities but says companies need to play a role in equitable outcomes for everyone.  He explained Postmates has developed programs to help with food security and job growth for their gig-economy employees. One thing both sides of the Prop C debate seem to agree on, is that a solution to the homeless issues will take a combined effort from many partners. 

“We have to make some changes and a policy level,” said Fong.  “ All step up to compassionately to solve this problem.” 

“I don’t care if that neighbor wears a tech hoodie or doesn’t have clothes on their back, we ought to be looking out for one another,” said Aiyer.