Committee delays MCO living-wage amendments for one week after broad public support

The Budget & Finance Committee on Aug. 1 heard extensive public testimony and delayed formal action for one week on proposed amendments to the Minimum Compensation Ordinance (MCO), a measure that would raise minimum compensation rates for nonprofit and public-entity contractors and add annual CPI indexing.

Supervisor Tom Ammiano introduced the amendments and asked for a one-week continuance so committee members and the public could review language distributed the same day. Ammiano described key changes: raising nonprofit and public-entity contractor rates to parity with for-profit rates at $10.77 (effective Oct. 1) and adding a CPI-based annual increase (with a statutory waiver process that would allow the mayor and the Board to delay increases in the event of a demonstrated budget shortfall).

The committee heard more than 20 public speakers. Labor and nonprofit advocates said the changes would correct a longstanding two-tier wage structure and protect vital services. Tim Paulson of the San Francisco Labor Council said the uncovered workers "absolutely deserve that bump immediately." Connie Ford of Office Employees Local 3 urged inclusion of CPI indexing and cautioned that the mayor's opt-out should require explanation and Board review. San Francisco Human Services Network and home-care provider representatives urged passage with safeguards and funding to avoid service reductions. Several speakers representing Bay Area unions, students and community organizations asked the committee to send the amendments to the full Board for action.

Budget figures were discussed: Ammiano said the joint budget report projected a 0.7% shortfall ($25 million) for the year but that earlier add-backs had restored funds; however, the mayor's budget office had not included the October CPI increase in its cost estimates. Ammiano said the committee had identified a $1,045,000 add-back earlier but that depending on assumptions an additional $2.6 million (or a different figure) could be needed to fully fund the change for the current year. He asked the controller, the mayor's staff and the Budget Analyst to work together before the next hearing.

After public comment the committee voted to continue the MCO amendments for one week and to accept further cost analysis from the mayor's offices and the controller, so the committee can consider funding pathways before final committee approval.

What happens next: The item is continued for one week to allow agency budget offices to reconcile the cost estimates, allow the Board's budget analyst and the controller to explore revenue options, and permit the committee to adopt final ordinance language and any necessary implementing procedures.