PROPOSITION K – GENERAL SALES TAX
Placed on the ballot by the Board of Supervisors
Requires a simple majority for passage
Should the City impose a sales and use tax at a rate of 0.75% for 25 years, increasing the combined state and local sales tax to 9.25%?
The sales tax rate in San Francisco is 8.75%. with 0.25% of the state component of the tax will expire on December 31, 2016 per the California Constitution, reducing the combined rate to 8.5%.
- 5% of this is State taxes, of which the City receives 1.25%.
- 25% is local taxes used to fund Bay Area Rapid Transit, San Francisco County Transportation Authority, and the San Francisco Public Finance Authority.
This ordinance would increase sales tax in San Francisco to 9.25% with the added tax going into the General Fund. If approved, the increase would take effect on April 1, 2017. The increase would expire after 25 years.
If approved, this ordinance would also adjust the spending limits imposed on the City by State law. Following voter approval, it would increase the limit by the amount of additional revenue generated from this tax, for four years.
What a “YES” vote means: You support increasing the City’s sales to 9.25%
What a “NO” vote means: You do not support increasing the City’s sales tax to 9.25%.
ARGUMENTS IN FAVOR OF PROP K:
- Proposition K is progressive and fair because wealthy, big corporations and visitors to San Francisco who spend more will always pay more.
- San Francisco’s sales tax rate would still be lower than many other Bay Area cities and counties.
- Proposition K will generate $150 million for San Francisco’s General Fund to invest in housing and transportation
ARGUMENTS AGAINST PROP K:
- Low and middle-income residents will be disproportionately impacted and spending in San Francisco could drop by $150 – $150 million a year.
- San Francisco’s sales tax already has an existing fixed transportation allocation
- Proposition K is bundled with Proposition J, and it is an effort to avoid the 2/3 approval requirement for a dedicated tax
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