Because of a flawed ballot measure, hopes have been dashed for a new tax that would fund universal basic income programs in San Francisco.
But proponents of guaranteed income programs are hoping it’s only a temporary setback. They are already mulling new ways to fund their efforts, which could include asking The City to dedicate a portion of its budget directly to the cause.
Proposition K was supposed to raise funds for a guaranteed income program by taxing large online retailers. But, the way the measure was written, Amazon might be able to avoid the tax, which instead would fall largely on smaller retailers already struggling through the pandemic.
After realizing they’d made a fatal error, proponents are withdrawing their support for their own proposal.
It’s a huge loss for those hoping the tax would be a boon to the burgeoning universal basic income programs in The City.
“I would want to make sure that any guaranteed income (program) was being funded in a responsible way,” said Jim Pugh, co-director of the Universal Income Project.
Guaranteed income programs — which provide unrestricted cash payments to those who qualify — have sprouted up across San Francisco and elsewhere in recent years. Proponents see them as a more effective and efficient way to help people in poverty. They point to early success in pilot programs like Miracle Money, which provided people experiencing homelessness with $500 monthly payments.
The tax measure in San Francisco, which is still slated to appear as Proposition K on the November ballot, would create a centralized fund that would support guaranteed income programs and also support for small businesses.
In its initial review of the proposal, the city Controller’s Office estimated that the tax would generate $48 to $72 million each year.
But the proposal’s flaws were highlighted in an Aug. 13 Twitter thread by Sharky Laguana, president of the San Francisco Small Business Commission.
The tax would apply to businesses that receive more than 80% of their revenue from shipping goods or services to customers in The City. But Laguana pointed out that Amazon’s business is diversified — for example, Amazon Web Services sells cloud computing services to San Francisco-based companies — and would likely argue that its revenues don’t meet the tax threshold.
Hundreds of businesses a fraction of Amazon’s size and based in San Francisco, however, would be subject to the new tax and would struggle to comply.
“Many small businesses are hanging on by a thread, and don’t have accounting systems that can easily accommodate this. To remain in compliance they will have to switch to new systems, or spend enormous amounts of time going through invoices manually,” Laguana tweeted.
The measure was developed by the Tenants and Owners Development Corporation, also known as TODCO, the nonprofit housing provider in SOMA. Its leader, John Eberling, told The San Francisco Standard that he will seek to have the measure removed from the ballot and plans to redraft it.
San Francisco Elections Director John Arntz told The Examiner there is no process in the local election elections code to allow an initial proponent to withdraw a measure from the ballot once it’s approved to appear on it.
The proponents could request that a judge find cause to strike it from the ballot, but “how they would go forward with that, I don’t know,” Arntz said.
The measure’s supporters had already raised nearly $1 million to support it, according to city campaign finance data.
Still, Pugh does not see it as a waste of money and effort.
Supporters hope that the fact that the measure garnered enough signatures to make it onto the ballot shows that there’s momentum behind the concept of guaranteed income in San Francisco.
After lying mostly dormant for decades, the concept of guaranteed income has received increasing attention in recent years, including in the failed presidential campaign of Andrew Yang.
The City of Stockton started a universal basic income program pilot in 2019, and the benefits were widely reported in news headlines around the country.
“It’s definitely not that this doesn’t work, it’s simply a delay,” Pugh said.