Earlier this week, the Board of Supervisors approved a measure for the upcoming November ballot that would increase San Francisco's sales tax from 8.5 to nine percent, although the rate would still be half a point lower than the one the city had in place as recently as a few months ago.
The move is an effort to regain some of the revenue lost by the city due to legislative paralysis in Sacramento. The Chronicle reports:
The city's sales levy fell by 1 percentage point last month, after Republicans in the state Legislature stymied Governor Jerry Brown's plan to extend temporary tax increases and fees that expired June 30. When the statewide levy on retail purchases fell, it pushed the city's rate down from 9.5 percent.
In a press release issued on Wednesday morning, Mayor Ed Lee called the tax increase necessary to fill the gaping hole in the city's budget created by the state legislature earlier this year. "In these challenging economic times, we are seeking to restore the sales tax locally by one half of one cent to protect public safety programs and preserve the social safety net for our City’s most vulnerable," said Lee. "This is a balanced measure that will save City services while still allowing San Franciscans to experience a decline in the sales tax rate from the rate we’ve been paying for the past two years."
Supervisor Scott Weiner agreed, telling the Examiner, "We’re in desperate budget straits. Given that this would not raise the sales tax, I think it would be appropriate.”
While local officials applauded the move, which is expected to bring some $60 million into the city's coffers, some local business owners aren't so convinced the tax increase will end up being a net positive for the city. The Examiner reports:
Not everyone sees the wisdom in the mayor’s proposal. Stephen Cornell, owner of Brownies Hardware on Polk and Sacramento streets, said, “We’re in competition with our neighbors. [Our sales tax] shouldn’t be above anybody else.”
Nearby counties’ sales-tax rates would remain lower than San Francisco’s, unless they too go to the voters to enact a local increase. Starting Friday, San Mateo’s will be 8.25 percent, Marin’s 8 percent and Alameda’s 8.75 percent.
If approved by the two-thirds of San Francisco voters necessary to pass the measure, the tax hike will take effect next April and is scheduled to expire at the end of 2022. That is, unless legislators in Sacramento reinstate the state sales tax to its previous level, or impose a similar sales tax within the next year. In that case, this rate increase will automatically disappear.