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Committee advances ordinance to use Prop M funds to waive $10 million in regulatory license fees for small businesses
Summary
The Budget & Finance Committee forwarded to the full Board an ordinance that would eliminate roughly $10 million in regulatory license fees under Proposition M, raise the shared-space gross receipts threshold to $5 million and make related billing changes effective in 2026. The Treasurer's Office said restaurants and nightlife businesses would see the largest savings.
The Budget & Finance Committee on Nov. 20 voted to send an ordinance to the full Board that would use Proposition M revenues to eliminate up to $10,000,000 in city regulatory license fees and raise the gross-receipts threshold for certain fee reductions.
A representative from the Office of the Treasurer and Tax Collector told the committee the ordinance would identify about 49 license fees to waive and that the change would be effective in 2026 to align with Prop M revenue timing. "This ordinance will primarily reduce the fee burden for restaurants and nightlife," the representative said, adding that 91% of San Francisco restaurants would not receive a bill for the affected regulatory license fees and that a typical mid-size restaurant would save at least $1,400 per year.
Vice Chair Rafael Mendelmann praised the move as long-sought relief for small businesses and said eliminating many of the fees was a bright spot after a difficult election. The Budget and Legislative Analyst summarized the impact in the committee report and recommended approval.
The ordinance also increases the shared-space small-business exemption threshold from $2,500,000 to $5,000,000 for parklets and similar programs and indefinitely waives certain device and business-location fees for taxi and transportation-network drivers. The Treasurer's Office representative said the administration intends to dedicate future business tax revenue to backfill revenue losses over time, while acknowledging the $10 million offset under Prop M is expected to be phased in, with the full backfill modeled by year three.
The committee forwarded the ordinance to the full Board with a positive recommendation (3-0). The Board will consider final action at a subsequent meeting.
