Business-tax reform threatens Muni funding measure

Muni is as popular as ever. But an effort to boost its funding to prevent service cuts could fail if a simultaneous move to reform San Francisco’s business taxes proves to be even more popular.

Prop. M, meanwhile, represents an attempt to make The City more business friendly and reduce its revenue dependence on its biggest employers. “Prop. M is supposed to fix all the problems caused by those ballot measures,” said a member of the business community who took part in the negotiations around reforming The City’s business taxes. “And Prop. L is the first step in just doing the same thing again.”

Regardless of exactly how the provision got into Prop. M or at whose direction, it wasn’t intended to specifically thwart Prop. L, several Prop M. backers said. “I don’t think it was on anyone’s mind that someone might be working on what turned out to be Prop. L,” Mandelman said. The concern about another measure, he continued, “wasn’t about L. It was about an alternative business-tax reform.”

The conflict provisions such as the one in Prop. M are commonly found in ballot measures, especially if there’s concern about a competing measure, Peskin said. Propositions D and E, which will also be on the November ballot and offer competing ways to streamline the number of city commissions, each contain a similar provision.But at least one person in City Hall familiar with the development of business-tax reform said people involved in that effort were aware of Prop.

Using an additional gross-receipts tax to fund Muni was not Prop. L backers’ first choice, Hall said. Instead, they wanted to pursue a bigger funding measure that would fully close the agency’s deficit, he said. But after numerous discussions with supervisors, the mayor’s office, community organizations, and others, it became clear to them that such a large-scale measure wasn’t politically feasible this year, so they dropped the idea, Hall said.

As far as she knows, Siegal said transit activists weren’t involved in the business-tax reform effort. And no one from that effort reached out to the developers of Prop. L, she and Hall said.

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