With two ballot measures in this week's election amounting to a regional referendum on how much tech corporations should contribute to the common good, voters in San Francisco and in Google's hometown of Mountain View decided that some wealth redistribution was in order.
"These companies have more money than God, and it's fair for them to pay their share above the existing taxes and donations they already make," said Mountain View Mayor Lenny Siegel, who spearheaded the successful effort to pass a "head tax" aimed squarely at Google.
The more contentious referendum was San Francisco's Proposition C, which adds a new bracket to the city's tax on gross receipts for companies bringing in more than $50 million a year. It requires that proceeds from the new tax go solely to providing permanent housing, rent support and services for homeless San Franciscans.
The San Francisco office of the controller estimated that 300 to 400 businesses will be affected by the tax, which will add as much as $300 million a year to the $380 million the city currently spends on services and housing related to homelessness, including rent subsidies and shelters.
The proposition gained prominent opponents early on.
Democrats including recently elected Mayor London Breed and state Sen. Scott Wiener joined the San Francisco Chamber of Commerce in arguing that Proposition C failed to create a system of oversight for the new funds. The influx of funding "could make our homelessness problem worse" by attracting more people in need to the city, and the additional tax would harm the local economy, Breed said in a statement.
Executives at tech firms that process payments, including Twitter's Jack Dorsey, also chief executive of Square, and Patrick Collison, chief executive of Stripe, said the tax unfairly targeted financial services businesses like their own, which had already been taxed at a higher rate than other sectors.
Salesforce CEO Marc Benioff emerged as a champion of the proposition, pouring almost $8 million into campaign coffers by Election Day. He publicly argued with proposition opponents, such as Dorsey and Zynga founder Mark Pincus, chiding on Twitter that "the homeless have been left behind by You & the other 70 SF billionaires."
The proposition passed with 60 percent of the vote. The city controller's office said Wednesday that collection will begin in 2019, but noted that funds won't be allocated until the resolution of a lawsuit filed by the Howard Jarvis Taxpayers Association over a June ballot measure, which calls into question whether new taxes need a two-thirds majority to go into effect.
In Mountain View, voters opted to alter the city's business license fee, which had stayed flat at $30 per company for decades, to one that changes based on the size of the company's workforce. A business with fewer than 50 employees will now pay a flat fee between $100 and $450 for registration and licensing. The bill for a company with 5,000 employees would climb to $584,070. And Google, whose estimated Mountain View workforce of 23,000 dwarfs its neighbors, is slated to pay more than $3 million a year under the new regime.
The new tax passed with more than 69 percent of the vote and is set to go into full effect in 2022.
Though technology companies have faced some public backlash in the Bay Area, including high-profile protests over employees' shuttle buses, these twin ballot measures are a rare instance when voters have pushed back against the industry.
Cupertino, the hometown of Apple, considered giving voters a chance to put a head tax on its main employer before shelving the idea this year. The Seattle City Council passed a head tax to fund affordable housing and homelessness services on its resident behemoth, Amazon, in May, only to overturn the tax in June in response to pressure from the company.
Distributed by Tribune News Service.