Supervisors Hand Tax Measures to the Voters

Hotel and transfer tax increases will be on the San Francisco ballot
By: Gerry Shih

Minutes after the San Francisco Board of Supervisors officially approved a $6.5 billion budget for the coming fiscal year, progressive supervisors advanced a tax measure to the November ballot, promising that it would generate tens of millions of dollars a year in future revenue for the city.

Voters this fall will decide whether to raise the tax on property sales from 1.5 percent to 2 percent on properties valued between $5 and $10 million. The tax rate would be 2.5 percent for properties above $10 million.

The measure’s sponsor, Supervisor John Avalos, told the board Tuesday that his plan would generate $25 million a year for the city, which has grappled with deficits in each of the past several years.

A separate tax proposal, which would raise the tax on hotel rooms by 2 percent, to 16 percent, has already been approved by the board and will go to voters in November.

The Avalos proposal and the hotel tax were part of a package of four tax measures that had been sharply opposed by the city’s business groups, who say they cannot afford the levies in a weak economic climate. Mayor Gavin Newsom, who is running for lieutenant governor, has also criticized the tax proposals as he seeks to portray his tenure in City Hall as a period of fiscally sound governance.

"The board approval of a balanced budget today was prima facie evidence that we don't need taxes," said Tony Winnicker, the mayor's spokesman. "They should be the last resort, especially amid a recession and jobless recovery."

The two remaining tax measures were abandoned. Board President David Chiu had proposed a 1.995 percent tax on commercial rent over two years and Supervisor Ross Mirkarimi had proposed a 10 percent increase in the parking tax.

Avalos, Chiu and Mirkarimi agreed in negotiations Tuesday to only advance the transfer tax, they told the board.

There was some question of “the practicality of an effective full-court press around those revenue measures,” said Mirkarimi.

Chris Daly of District 6 was the only supervisor who opposed tabling the measures, which he called “smart.” The tax measures were necessary to the city’s sustained financial health, he said.

Daly said he didn’t think political support for one measure could be strengthened by tabling the others.

“I just disagree with that political analysis,” said Daly.