SAN FRANCISCO (CN) – Supporters of a ballot measure to raise taxes on San Francisco's biggest companies to fight homelessness say the city must take bold steps to address the crisis. But opponents say it will accomplish little more than harm to the city's booming job market.
"If you make the wrong tax policy decisions, you risk your economy," said Jim Lazarus, vice president of the San Francisco Chamber of Commerce.
Proposition C would add up to $300 million to city's current $380 million homelessness budget to fund new affordable housing units, shelter beds, mental health and substance use treatment, and other services.
Supporters say the new funding is necessary to help get the city's estimated 7,500 homeless people sheltered and into treatment. The city currently has a 1,200-person waiting list for shelter beds.
"We need new housing units for people to get off the streets, or we can choose not to do that and have a humanitarian crisis that we have today," said Jennifer Friedenbach, director of San Francisco's Coalition on Homelessness.
The money would come from a 0.5 percent gross receipts tax on corporate revenue above $50 million. It would impact 300 to 400 companies and cost about 725 to 875 jobs over the next 20 years, according to an analysis by San Francisco's chief economist Ted Egan. Egan also concluded the new revenue would likely reduce the city's homeless population.
But critics, including San Francisco Mayor London Breed, say Egan's analysis does not quantify the risk of headquartered companies fleeing San Francisco for cheaper cities. That could eliminate middle-class jobs that serve big tech companies and their high-paid employees, she said.
"We cannot afford to lose even more jobs for middle-class San Franciscans," Breed said in a statement in early October.
Breed also insists the problem requires a regional and statewide solution, since adding to San Francisco's budget could attract people from other communities and force the city to fund services for residents from neighboring counties.
Friedenbach rejects that reasoning. She said the "magnet theory," which predicts added funding and services will encourage unsheltered people to flock to the San Francisco, is a "ridiculous" and "debunked" concept.
According to the most recent homeless count and survey in 2017, 69 percent of the city's unsheltered population were living in San Francisco when they became homeless.
"Impoverished people don't move around because there are services offered somewhere else," Friedenbach said.
Breed also insists the city needs to audit the effectiveness of its current homeless spending before injecting another $300 million into the program.
San Francisco District 5 Supervisor Vallie Brown agrees that an audit should occur, but also thinks the city needs more money now to address the crisis. At every community meeting she attends, Brown hears complaints about tent encampments, open drug use, human feces, and the unpleasant sight of human misery on the street.
"We just don't have the kind of money and the kind of resources to address what's happening in the city," Brown said. "We need shelter beds, housing with supportive services, and psych beds."
The homeless tax proposal has also sparked debate among two of the city's most prominent tech titans: Salesforce CEO Marc Benioff and Jack Dorsey, CEO of Twitter and payment company Square.
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