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Committee advances amended CEO‑surtax proposal aimed at funding frontline services
Summary
The Budget & Finance Committee on July 16 approved amendments to an overpaid‑executive (CEO) surtax initiative that would levy a rising surcharge based on the ratio of top executive pay to median local pay, and continued the item to the next regular meeting for further consideration.
The Budget & Finance Committee advanced an amended version of Supervisor Matt Haney’s overpaid‑executive surtax on July 16, approving sponsor‑proposed clarifications and moving the measure to the next regular committee meeting.
The proposal would impose a modest surcharge on businesses whose highest‑paid managerial employee earns a very large multiple of the firm’s median pay for workers based in San Francisco. The surcharge rate would start at 0.1% for a 100:1 ratio and scale up (0.2% at 200:1, 0.3% at 300:1), capped at 0.6% for the highest tiers; companies grossing under $1,170,000 annually and firms without high executive compensation would not be affected, sponsors said.
Sponsor’s rationale: "Our health system ... was already stretched and strained to its limits," Supervisor Haney said, arguing the surtax could raise up to $140,000,000 a year to hire nurses, doctors and other frontline workers and also incentivize companies to narrow pay gaps or raise wages.
Amendments approved: The committee approved two sponsor amendments: (1) adding the word "managerial" to clarify the definition of the highest‑paid employee and (2) capping the surcharge tiers at 0.6% (and applying a 2.4% cap for administrative‑office classification). Sponsors said the revenue range would remain between roughly $60 million and $140 million with the amendments.
Public testimony: The committee heard dozens of callers, with many frontline health and care workers, union representatives and community members supporting the surtax as a way to protect services during the pandemic. Business representatives, including the San Francisco Chamber of Commerce and other trade groups, urged caution about adding new taxes during a fragile economic recovery.
Committee action and next steps: The committee approved the amendments by roll call and continued the amended items to the next regular Budget & Finance Committee meeting on July 22 for further consideration and scheduling.
