Supervisors approve Mayor Breed’s bill for funding Prop C to house the unhoused now

Mayor Breed’s legislation will allow companies to voluntarily agree to waive their rights to a refund should Prop C be found invalid by the courts, in return for a 10 percent deduction on their tax liability

by Evan Ward

San Francisco – The Board of Supervisors voted at its April 9 meeting to pass Mayor London N. Breed’s legislation that will allow companies subject to November 2018’s Proposition C gross receipts tax to voluntarily agree to waive their right to a refund should that legislation be found invalid by the courts. In return for this agreement, the company would receive a 10 percent deduction on its tax liability and the funding would be available for the City to spend immediately instead of waiting for any legal uncertainty to be resolved. Supervisor Vallie Brown co-sponsored the legislation.

Proposition C, a tax to support homelessness and housing services, passed with roughly 61 percent of the vote and is currently held up due to legal uncertainty. The funding from the legislation is being collected, but the controller is not authorizing the City to spend the funding due to the litigation risk. Should the courts rule that Prop C was required to meet a two-thirds vote threshold, the money being held by the controller will have to be refunded.

Proposition C, a tax to support homelessness and housing services, passed with roughly 61 percent of the vote … With Mayor Breed’s legislation, companies can choose to waive their right to have a portion or the total of their taxes refunded if the courts ultimately require the two-thirds threshold to be met.

With Mayor Breed’s legislation, companies can choose to waive their right to have a portion or the total of their taxes refunded if the courts ultimately require the two-thirds threshold to be met. In return for waiving these recovery rights, the companies would receive a 10 percent tax liability deduction. This would potentially free up funding that the City would otherwise be unable to spend until the matter is settled in court.

“While we expected that this funding would likely be tied up in litigation due to the legal uncertainty, this is one way to make some of the funding available sooner rather than later,” said Mayor Breed. “In the meantime, we are moving forward with my shelter crisis legislation and my plan to open 1,000 new shelter beds by the end of next year, in addition to increasing resources for behavioral health and substance use treatment and more permanent supportive housing for our homeless.”

“San Franciscans are in dire need on our streets right now. We need San Francisco businesses to step up, make use of the waiver, and help us meet the need,” said Supervisor Vallie Brown.

In October 2018, Mayor Breed announced a plan to add 1,000 new shelter beds by 2020, with 500 of them being built by this summer. In order to achieve this goal, she today signed into law her legislation to streamline the creation of new shelters and Navigation Centers. Since taking office, Mayor Breed has opened a total of 338 new Navigation Center beds.

“San Franciscans are in dire need on our streets right now. We need San Francisco businesses to step up, make use of the waiver, and help us meet the need,” said Supervisor Vallie Brown. “The courts can be slow, and this legislation frees up funds to move more quickly. We’re in crisis – let’s act like it.”

The legislation passed today on the first reading. The second reading is scheduled for Tuesday, April 16.

Evan Ward, a journalist in the Mayor’s Office of Communications, can be reached at [email protected].