JOHN SEEWER, Associated Press

2 months ago

FILE – Joe Wurzelbacher, also known as “Joe the Plumber,” laughs while talking outside of his home in Holland, Ohio, Oct. 16, 2008. Wurzelbacher, who was thrust into the political spotlight as “Joe the Plumber” after questioning Barack Obama about his economic policies during the 2008 presidential campaign, has died, his son said Monday, Aug. 28, 2023. He was 49. His oldest son, Joey Wurzelbacher, said his father died Sunday, Aug. 27, in Wisconsin after a long illness. (AP Photo/Madalyn Ruggiero, File)

TOLEDO, Ohio (AP) — Samuel “Joe” Wurzelbacher, who was thrust into the political spotlight as “Joe the Plumber” after questioning Barack Obama about his economic proposals during the 2008 presidential campaign, and who later forayed into politics himself, has died, his son said Monday. He was 49.

His oldest son, Joey Wurzelbacher, said his father died Sunday in Wisconsin after a long illness. His family announced this year on an online fundraising site that he had pancreatic cancer.

“The only thing I have to say is that he was a true patriot,” Joey Wurzelbacher — whose father had the middle name Joseph and went by Joe — said in a telephone interview. “His big thing is that everyone comes to God. That’s what he taught me, and that’s a message I hope is heard by a lot of people.”

He went from toiling as a plumber in suburban Toledo, Ohio, to life as a media sensation when he asked Obama about his tax plan during a campaign stop.

Their exchange and Obama’s response that he wanted to “spread the wealth around” aired often on cable news. Days later, Obama’s Republican opponent, U.S. Sen. John McCain, repeatedly cited “Joe the Plumber” in a presidential debate.

Wurzelbacher soon faced intense media scrutiny and acknowledged that he didn’t have a plumber’s license, saying at the time he didn’t need one because he worked for small plumbing company owned by someone else.

Wurzelbacher went on to campaign with McCain and his running mate, Alaska Gov. Sarah Palin. But he later criticized McCain in his book and said he did not want him as the GOP presidential nominee.

His sudden fame turned him into a sought-after voice for many anti-establishment conservatives, and he traveled the country speaking at tea party rallies and conservative gatherings.

He also wrote a book and worked with a veterans organization that provided outdoor programs for wounded soldiers.

In 2012, he made a bid for a U.S. House seat in Ohio. But he lost in a landslide to Democrat Marcy Kaptur in a district heavily tilted toward Democrats.

Republicans had recruited him to run and thought his fame would help bring in enough money to mount a serious challenge. But he drew criticism during the campaign for suggesting that the United States should build a fence at the Mexico border and “start shooting” at immigrants suspected of entering the country illegally.

Wurzelbacher returned to working as a plumber after he gave up on politics, his family said.

Funeral arrangements were pending. Survivors include his wife, Katie, and four children.

___

Associated Press writer Mark Scolforo in Harrisburg, Pennsylvania, contributed to this report.

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The U.S. Department of the Treasury awarded $60 million in tax credits to support San Francisco’s nonprofit organizations and projects in underserved neighborhoods, city officials said Monday.

The New Markets Tax Credits will be distributed to the San Francisco Community Investment Fund, a nonprofit tasked to help fund projects with community benefits in low-income San Francisco neighborhoods, Mayor London Breed’s office said in a news release.

“Our non-profits and small businesses are at the core of community and neighborhoods across our city,” Breed said in a statement. 

“This federal support comes at a time when so many of our businesses and community organizations are still recovering, but we know there is much more work ahead. I want to thank the U.S. Treasury for including San Francisco in this allocation and supporting our city’s recovery.”

The tax credits will help local businesses and nonprofits to use underutilized buildings in San Francisco’s low-income neighborhoods, create jobs and investment, and provide sustainable community services, the mayor’s office said.

The SFCIF has supported 15 projects across eight neighborhoods in the city, created over 1,000 construction jobs, and deployed $216.5 million in New Markets Tax Credit allocations, according to city officials.

Previous tax incentives have boosted the construction of projects such as the Meals on Wheels San Francisco food distribution center in the Bayview District, the Community Music Center and Hamilton Families buildings in the Mission District, the community and childcare center in the Sunnydale HOPE SF public housing development, the renovation of the Geneva Car Barn in the Excelsior district, and the 447 Minna cultural hub and the West Bay Pilipino Multi-Service Center in the South of Market neighborhood, the mayor’s office said.

Those interested in the San Francisco Community Investment Fund can visit www.SFCIF.org. Applications are received and reviewed on a rolling basis, according to city officials.

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Samuel “Joe” Wurzelbacher, who was thrust into the political spotlight as “Joe the Plumber” after questioning Barack Obama about his economic policies during the 2008 presidential campaign, and who later forayed into politics himself, has died, his son said Monday. He was 49.

His oldest son, Joey Wurzelbacher, said his father died Sunday in Wisconsin after a long illness. His family announced this year on an online fundraising site that he had pancreatic cancer.

“The only thing I have to say is that he was a true patriot,” Joey Wurzelbacher — whose father had the middle name Joseph and went by Joe — said in a telephone interview. “His big thing is that everyone come to God. That’s what he taught me, and that’s a message I hope is heard by a lot of people.”

He went from toiling as a plumber in suburban Toledo, Ohio, to life as a media sensation when he asked Obama about his tax plan during a campaign stop.

Their exchange and Obama’s response that he wanted to “spread the wealth around” aired often on cable news. Days later, Obama’s Republican opponent, U.S. Sen. John McCain, repeatedly cited “Joe the Plumber” in a presidential debate.

Wurzelbacher soon faced intense media scrutiny and acknowledged that he didn’t have a plumber’s license, saying at the time he didn’t need one because he worked for a small plumbing company owned by someone else.

Wurzelbacher went on to campaign with McCain and his running mate, Alaska Gov. Sarah Palin, but he later criticized McCain in his book and said he did not want him as the GOP presidential nominee.

His sudden fame turned him into a sought-after voice for many anti-establishment conservatives, and he traveled the country speaking at tea party rallies and conservative gatherings.

He also wrote a book and worked with a veterans organization that provided outdoor programs for wounded soldiers.

In 2012, he made a bid for a U.S. House seat in Ohio, but he lost in a landslide to Democrat Marcy Kaptur in a district heavily tilted toward Democrats.

Republicans had recruited him to run and thought his fame would help bring in enough money to mount a serious challenge. But he drew criticism during the campaign for suggesting that the United States should build a fence at the Mexico border and “start shooting” at immigrants suspected of entering the country illegally.

Wurzelbacher returned to working as a plumber after he gave up on politics, his family said.

Funeral arrangements were pending. Survivors include his wife, Katie, and four children.

Associated Press writer Mark Scolforo in Harrisburg, Pennsylvania, contributed to this report.

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California’s local sales tax rules, rooted in the 1950s, are resulting in significant losses for two-thirds of the state’s cities and bonanzas for fewer than 30 in the e-commerce era, according to a state report that quantifies the impact of the first-time rules .

The new report from the California Department of Taxes and Fees shows how California’s local sales tax rules are skewing the fortunes of cities depending on where retail giants like Apple, Best Buy or Amazon.com Inc. decide to establish warehouses or allocate their online sales .

With tensions rising between cities as online shopping exploded, the department examined what would happen if the rules changed. The list of winners and losers would be turned on its head, but not always in an obvious way.

According to the report, affluent Malibu and Palo Alto would win, but so would lower-income communities like Brawley in Imperial County and Sanger in Fresno County. Prosperous Cupertino, home of Apple Inc., would lose, as would rural and low-income Dinuba, where Best Buy Inc. has a warehouse. Most of the state’s largest cities — including San Francisco and Los Angeles — would win big.

One city not named in the report would see a 179% increase in sales tax revenue, while another would lose 82% of what it now receives. Two-thirds of the cities would gain or lose more than 25%.

Overall, 313 of California’s 482 cities would earn more revenue and 28 would lose if the state allocated local sales tax from online sales based on customer location — which is the case in almost every other state — rather than a warehouse’s location or office where the transaction takes place. There isn’t enough data available to show what would happen in 141 smaller cities.

The IRS prepared the report for the League of California Cities, a nonprofit organization trying to negotiate a compromise among its members to change the rules, which would require changing the state constitution.

“It is very difficult to know exactly what the impact of the dollar would be, but we believe this provides useful information to move the dialogue forward,” CDTFA director Nicolas Maduros said in an interview. The department makes no recommendations or takes a political position in the report, he said.

The league is considering the report, Legislative Representative Nick Romo said.

“This data will help inform Cal Cities’ policies regarding the Distance Selling Tax,” Romo said. “Our goal is to build a resilient consensus on reforms to ensure the sales tax can continue to support the critical public services that Californians depend on every day.”

At stake is each city’s share of approximately $9.6 billion in annual local sales taxes collected. The money comes from a 1 percentage point increment earmarked for local governments from the 7.25% statewide sales tax. The department collects the tax and distributes it to cities based primarily on where transactions take place, which for online sales is usually the location of the warehouse the item is shipped to or the office where the transaction is made, according to the company is processed.

Texas is the only other state with a similar sales tax regime, where the local portion of sales tax is attributed to the location of the transaction or origin of sale rather than the customer’s location or destination.

Evaluation of winners, losers

The CDTFA provided Bloomberg Tax with the report along with a list of cities and ranges of their potential gains or losses of up to 25%. The department declined to disclose city-specific gains or losses, saying disclosure could lead to determining which companies are involved based on the locations of their offices or warehouses. The disclosure would violate the Revenue and Taxation Code’s prohibition on releasing confidential taxpayer information, the agency said.

A broad mix of small, large, rural, suburban and urban cities would generate revenue if local sales tax was allocated based on the customer’s location, the department noted. Some of the largest cities would each receive at least 25% more annual revenue.

The losers are cities with warehouses or offices for retailers who handle online sales. In this group, the top 15 losers include a handful of cities that have deals with certain retailers to share profits from online sales.

Under the sharing agreements, cities typically agree to return half or more of local sales taxes paid on e-commerce sales in California directly to businesses for decades in the name of economic development. In the case of Apple, Bloomberg Tax found that its deal with Cupertino resulted in one of the world’s richest companies receiving $107.7 million in payments between 1998 and the end of 2022. The small, rural Central Valley town of Dinuba has paid Best Buy $41 million since 2016.

Continue reading: Apple’s local hometown tax deal comes under fire

Cupertino and Dinuba would see revenue drop more than 25% if the rules were changed. The same goes for Perris, which has sharing agreements with Home Depot and Ferguson Plumbing; San Bruno, which has an agreement with Walmart.com; Shafter, which has an agreement with Williams-Sonoma Inc.; and Tracy, who has agreements with Home Depot Inc. and Fisher Scientific, according to Bloomberg Tax Coverage.

Amazon doesn’t have sharing agreements with cities, but is creating a cash windfall for some cities with fulfillment centers by designating them as the location for customers’ online purchases statewide, Bloomberg Tax has found. Eastvale in Riverside County has a designated fulfillment center and would lose more than 25% of its revenue, the report said.

Maduros warned that the report, based on the department’s own data and the 2021 credit and debit card transaction data it acquired, is an estimate with several caveats. For example, the credit card information uses zip codes that don’t always line up exactly with city limits. The department used data from the top 200 retailers, which account for 61% of online sales but may not be representative of all retailers. Also, the department’s data is based on tax assignments reported by retailers, which are subject to change if the department determines they are incorrect.

Still, the credit card information fills in gaps in the department’s own data, as it breaks down online and in-person purchases and indicates the location of shoppers. In the absence of a report like this, city leaders have only a general feeling that revenue is increasingly being concentrated in a few cities with warehouses and tax-sharing businesses, and can only guess at the extent of the concentration.

The report is intended to help inform the City League’s Revenue and Taxation Committee and a task force of city managers tasked with recommending rule changes that would resolve discrepancies between cities.

For example, the group might recommend splitting the 1% local sales tax between the place of transaction and the customer. Whatever the outcome, it would require a two-thirds majority in the legislature and the consent of the electorate to amend the state constitution.

The tax department produced the report after Gov. Gavin Newsom (D) vetoed a bill in 2021 that would have required retailers with more than $50 million in annual online sales to report where their customers are located. Sen. Steve Glazer (D), who authored the failed measure, said the report should give cities losing revenue more leverage over the current winners, who have dominated discussions so far.

“I hope that this data will give cities a backbone,” he said. “The tail wags the dog in the League.”

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Wealth management firm Fisher Investments says it is moving its headquarters from Camas to Texas to protest a Supreme Court decision upholding Washington’s new capital gains tax.

“In honor of the wisdom and legal knowledge of the Washington State Supreme Court and what it may do next, Fisher Investments is immediately moving its headquarters from Washington State to Texas,” Fisher said in a brief announcement Friday. The company did not respond to follow-up requests on Sunday.

Fisher is a major employer in Clark County, but the company gave no indication that it will move jobs to Texas. Ken Fisher, the billionaire who founded the company, has said in the past that the head office designation is irrelevant. Fisher already lives in Dallas, according to his social media profiles.

Neither Texas nor Washington have an income tax, but in 2021 the Olympia legislature introduced a 7% capital gains tax on sales of stocks, bonds, and other assets — with an exemption for the first $250,000 per year. The tax excludes real estate, retirement accounts and the sale of some small businesses.

Because Washington relies heavily on sales taxes for state revenue, lower-income residents bear a higher share of the cost of public services than in most other states. The capital gains tax divided Washington’s wealthy, with some arguing it would drive investment out of the state and others saying the wealthy would have to pay a larger share.

Some wealthy Washington and farming organizations questioned the capital gains tax, claiming it was an unconstitutional income or wealth tax. The state Supreme Court dismissed their efforts on Friday, ruling 7-2 that the capital gains tax is an allowable consumption tax.

Fisher employed approximately 1,800 people at Camas in 2020 out of 3,700 across the company. It also has corporate offices in the San Francisco Bay Area; Plano, Texas; and Tampa, Fla.

Fisher Investments says it has nearly $200 billion under management for individual investors, institutions and retirement plans. Fisher, formerly headquartered near Silicon Valley, announced plans to open a large office in Clark County in 2008. Back then, founder Ken Fisher said they wanted to move from the expensive real estate in the Bay Area to a more business-friendly place in a state with no personal income taxes.

Corporate headquarters were once an indication of where a company had its main operations. That has been less the case in recent years with the advent of remote work and satellite offices – a trend that has accelerated in the wake of the pandemic.

Fisher did not respond Sunday to questions about whether jobs will be relocated away from Camas as a result of the Supreme Court ruling. But in 2015, Ken Fisher told The Columbian newspaper that the headquarters’ designation was “technologically outdated” and had no impact on the company’s actual operations.

“The government requires a mailing address for ‘headquarters,’ and ours has been changed to Camas,” Fisher said. “Otherwise it has no meaning at all.”

Wealth management firms pulled billions of dollars from Fisher investments in 2019 after Ken Fisher made sexist comments during a fireside chat at an investment conference in San Francisco. Attendees said he spoke about genitals and pedophile financier Jeffrey Epstein and likened winning a client’s trust to “trying to get in a girl’s pants”.

In previous tweets, Fisher had made sexual jokes, asking if African Americans would have been better off with three more decades of slavery. Fisher initially rebuked critics but later repented and apologized amid the exodus of client funds.

“Some of the words and phrases I used during a recent conference to emphasize certain points were clearly wrong and I shouldn’t have used them,” Fisher said. “I realize that this type of language has no place in our company or our industry. I sincerely apologize.”

– Mike Rogoway | mrogoway@oregonian.com |

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IPA 500 company based in San Francisco SD Mayer & Associates (FY 21 net income of $7 million) acquires San Francisco-based tax practice Seifer Murken Despina James & Teichman (SMDJT).

Founded in 1979, SMDJT initially focused on tax planning, preparation and representation. In more than 40 years, the firm has grown to provide a range of professional legal and tax advice and services to individuals and businesses throughout the Bay Area. As part of the deal, SMDJT founder Douglas Murken and partners Randy Teichman will join SD Mayer’s team to expand the firm’s reach in tax, probate, trust management and real estate transactions.

“This is a strategic move that furthers our reach and impact in the Bay Area,” said SD Mayer MP Stephen Mayer. “Doug and Randi share our culture and commitment to providing the best possible outcome for all clients.”

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South San Francisco voted for affordable public housing, with Measure AA leading by 4,371 votes, or 57.5%, while Measure DD passed a new tax on large corporations to fund child care for all children between the ages of 2 1/2 and 5 for residents and employees is 3,338 votes in favor, or 43.61%, behind semi-official results from the San Mateo County Electoral Bureau as of 11 p.m. Tuesday.

If election results pass, South San Francisco’s AA measure authorizes the city to acquire, develop or construct up to 1% of the total number of existing housing units annually for eight years. The city will be able to use its $120 million in a special housing fund from commercial connection fees to build 1% of the total number of existing housing units in the city. This corresponds to around 250 units per year, a total of around 2,000 units over the next eight years. The measure would overrule Article 34, a 70-year-old state law that says additional affordable housing units can only be built with public funds if passed by a voter initiative.

Councilor James Coleman believes the passage of Measure AA bodes well for an eventual repeal of Article 34 nationwide.

“The results are very clear that residents want to see affordable housing and affordable city-owned or mixed-income public housing, and now it’s up to our city leaders to deliver what residents want,” Coleman said, adding that If this is the case, the city has more tools on its tool belt when it comes to building affordable housing faster.

“Over $100 million in impact fees for city-owned affordable housing. I look forward to seeing ways in which that could happen,” he said.

South San Francisco’s DD measure attempted to provide universal early childhood care for families who live or work in the city by imposing an annual tax on large commercial offices that generates approximately $55.9 million annually.

In other elections, the cities of San Mateo, Burlingame and Millbrae appeared to pass a variety of tax measures, while Redwood City voters appeared to have agreed to amend the city’s bylaws to allow the mayor a one-year term to allow more council members to serve According to the semi-official results, San Bruno appeared to be limiting the tenure of its city council and separately elected mayor.

Belmont and Millbrae both proposed a temporary occupancy tax, both of which appear to be passed. Measure K at Belmont required only a majority to pass and has 3,205 votes or 78.98%. If passed, the measure will authorize a 14 percent hotel guest tax in the city that is estimated to bring in $600,000 a year, which will cover a budget deficit and be a continuous tax until voters end it. Measure N in Millbrae has a significant lead of 2,660 votes or 78.93% and will seek to increase hotel guest occupancy tax from 12% to 14%, generating approximately $1.5 million annually in locally controlled funds, to address the service, including funding for police and fire departments.

Burlingame appears to have passed a measure taxing marijuana delivery companies, raising business license fees by a vote of 3,620, or 75.42%, according to the semi-official results.

Measure X would tax 5% of gross marijuana sales and generate $2 to $4 million per year. Corporate royalties would increase from $100 for all Burlingame companies to $200-$750 based on a tiered annual income, with only 7% of Burlingame companies having to pay the higher amount if they bring in more than $1 million . It would generate about $2.5 million annually and relieve the city, which has lost $20 million in temporary occupancy taxes from its hotels during the pandemic.

Measures P and Z in Redwood City amend the charter for the city to reduce the mayor’s term from two years to one year, allowing more council members to serve as mayors, and bring the city charter in line with state law. Both appear to have a staggering lead of 6,292 votes, or 62.95%, and 8,450 votes, or 85.76%, respectively, according to semi-official results from the San Mateo County Electoral Bureau as of 11 p.m. Tuesday.

Action BB in San Bruno has a clear lead with 4,690 votes or 82.72%. It limits the tenure of the city council and separately elected mayor to no more than 12 consecutive years, according to the semi-official results.

Measure CC has a significant lead with 9,655 votes, or 71.84%, in San Mateo and intends to increase the San Mateo real estate transfer tax from 0.5% to 1.5% on sales over $10 million. The transfer tax is expected to raise about $4.8 million, and the city said the funds would be used for road repairs, parking improvements, emergency services and reducing traffic congestion. It would affect less than 1% of all properties sold or transferred in the city.

All results correspond to the semi-official results for Tuesday, November 8th, which included votes received in the mail through Friday, November 4th and all ballots received at polling centers. Subsequent results will include votes received after Saturday, November 5th. Wednesday 16th November, Thursday 17th November, Friday 18th November, Monday 21st November and Wednesday 23rd November. The results will be confirmed on December 8th.

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There’s at least one place in California where even households making six figures can get help paying for child care: San Francisco, the state’s most expensive county when it comes to child care.

As providers across the state await reforms for their financially fraught industry, voters in San Francisco have gone ahead and created their own solution: a commercial tax that now generates $180 million in revenue a year for local child care.

“Why did we go after a revenue source? Because that’s the only way we’re going to get ourselves out of this problem,” said Mary Ignatius, an organizer with Parent Voices, a group that advocates for affordable child care and campaigned for the commercial tax.

Child care — crucial for children’s well-being and necessary for many families to work — has long been a market failure in America.

The real cost of child care

California’s child care aid reaches only a small fraction of the families who need it, and it’s stretching providers to the limit. Education reporter Kristen Taketa examines how the system is falling short, and who pays the price.

The inherently high cost of quality care causes a chain reaction of challenges for both consumers and providers: Parents can’t access child care because it’s too expensive, especially for infants and toddlers. And because quality care costs more than what parents can pay, providers are in constant financial stress and unable to pay their staff much — which in turn limits how many children they can serve.

The San Francisco tax, narrowly approved by voters in 2018, is that rare example in California of a dedicated, permanent funding source intended to solve those problems.

In the first year of its rollout, the measure has paid for 1,000 more children to enroll in subsidized care, increased wages for 2,500 early education teachers and made 10,000 more children eligible for subsidized care on top of the 15,000 who were before.

“I’m hoping that if people see San Francisco can do it, then why not somewhere else?” said retired San Francisco Board of Supervisors President Norman Yee, the main architect of the tax measure.

In 2018, after months of organizing from local officials, parents and child care workers, San Francisco voters passed the commercial tax with a measure dubbed “Baby Prop C” by a margin of less than one percentage point. A failed legal challenge by taxpayer and business groups delayed its implementation, but last year, funds collected under it began reaching the child care field in July.

As a result, families making up to 110 percent of San Francisco’s area median income — or up to $152,400 a year for a family of four — can now qualify for subsidized child care for their kids under age 4.

A child eats lunch on Pizza Friday at Baby Steps on Friday, Nov. 18, 2022, in San Francisco.

(Paul Kuroda / For The San Diego Union-Tribune)

Those income eligibility rules provide access to far more families than the state’s rules, which only allow subsidized care for families who make up to 85 percent of the state median income — or up to $95,289 annually for a similar family. Because it’s far more expensive to live in San Francisco than in California overall, some families who make even less than what it takes to get by there have not been able to qualify for state-subsidized care.

And unlike the state, which has required many families to chip in an income-based monthly fee toward their subsidized child care, San Francisco plans to charge no fees for city-funded care thanks to Proposition C funding, said Wei-min Wang, a director in the city’s early education department. That’s true even for moderate-income families who are newly eligible, he said.

“Now that we have Baby Prop C money, we don’t have to treat it like a scarce good we have to allocate and ration,” Wang said. “We don’t want high-quality early care and education to be so much a privilege as the right of every child, regardless of your background.”

Eventually, the city’s child care leaders expect to use Prop C to fund subsidized care for families making up to 200 percent of the area median income — as much as $277,100 for a family of four, according to current salary data. But the priority now is serving lower-income families, city officials said.

About half of Prop C revenue goes to expanding access to subsidized child care. But crucially, in an industry where low pay has often thwarted expansion of child care slots, the other half goes to pay raises for child care teachers, who in California are paid on average just $17 an hour. Many in San Francisco were making as little as $18 an hour — far shy of the $31 an hour it takes for a single person to get by there, according to the MIT Living Wage Calculator.

Prop C was designed not only to pay early educators a living wage, but to build a salary structure to put them on par with their counterparts in K-12 education, where starting pay is generally significantly higher and teachers are paid better the more higher education they have.

Prop C is working toward a new minimum wage of $28 an hour for early educators serving at least half low-income children by providing them semi-annual stipends or raising their hourly rates. Advocates expect that will not only improve current teachers’ quality of life but also help draw more quality applicants to the field and thus enable providers to serve more children.

Teacher Matthew Sullivan drapes a blanket over a child during nap time at Baby Steps on Friday, Nov. 18, 2022, in San Francisco, Calif.

(Paul Kuroda / For The San Diego Union-Tribune)

It may be too early to judge Prop C’s success.

Still, San Francisco is further along than most of the state in advancing child care reforms. In 1991, San Francisco became what was believed to be the first city in the U.S. to establish a municipal fund exclusively for children’s services, including child care. Since 2004, it has worked toward establishing universal preschool, and since 2013 it has had a city office dedicated to early care and education.

And for more than a decade, the city has paid child care providers who serve low-income kids higher rates than what the state pays its subsidized care providers, knowing that the true cost of providing quality care has typically exceeded what the state pays.

“We now have this dedicated source of early childhood funding that is the first municipal source, where we can really draw from forever,” said Ingrid Mezquita, director of the city’s Department of Early Childhood, of Prop C. “It gives a level of stability that this sector hasn’t had in a very long time, or ever.”

The push for Prop C

Families shell out more for child care in San Francisco than in any other California county.

The vast majority of San Francisco families must pay as much as $2,700 a month — more than $32,000 a year — for full-time infant care, according to a 2021 statewide survey. That’s compared to a statewide average of about $1,600 a month.

Yet California’s income eligibility levels for subsidized care are set so low that many families can’t qualify for help paying for child care, and many families who make enough to get by in California are automatically disqualified from subsidized care because they make too much. In San Francisco, a family of four with two working parents needs to make $167,920 to get by, according to MIT’s Living Wage Calculator, which is more than $72,000 above the state’s income limit for subsidized child care.

Meanwhile, there has not been enough public funding or child care providers in California to accommodate all the children who already do qualify for subsidized care. In San Francisco, more than 2,400 children were on the city’s waiting list for subsidized child care at the time Prop C was being proposed to voters.

There were other reasons to go after a child care tax measure, advocates said. For one thing, child care teachers in city-funded programs were seeing staff turnover rates of 75 percent, according to the early education department, which didn’t bode well for the quality of children’s education.

A child leaps during an outdoor activity next to San Francisco’s Stern Grove at Baby Steps on Friday, Nov. 18, 2022.

(Paul Kuroda / For The San Diego Union-Tribune)

Prop C was meant to be San Francisco’s answer to those problems.

The measure is largely the brainchild of Yee, the former board of supervisors president and a longtime child care and education advocate who had led one of San Francisco’s two child care referral agencies for 18 years before entering politics. He and fellow Supervisor Jane Kim led the effort to collect more than 9,400 voter signatures to put the initiative on the 2018 ballot.

Before, Yee and other advocates had to keep asking city leaders every year for one or two million or so dollars in the budget for child care. But those incremental, one-time amounts weren’t going to build a better child care system, which would require several reforms, he said.

Those reforms would need to address four areas, he said: giving more families access to subsidized care, expanding facilities to accommodate them, raising teachers’ pay and investing in their professional development to improve quality.

“Prop C is really a game-changer, because it provides the resources to do so many of the things that we wanted to do for our early education system,” Yee said in 2021, after Prop C survived the court challenge. “It gets us to close to universal child care access for everybody, including middle-income families, and it provides living wages for our early care educators.”

The real cost of child care

In this series, education reporter Kristen Taketa examines how California’s system of subsidized child care falls short — and who pays the price.

Before Prop C, commercial landlords in San Francisco generally paid a commercial rent tax rate of 0.3 percent.

Prop C now collects 3.5 percent from the rents of most commercial spaces and 1 percent from rents of warehouse spaces in San Francisco. Landlords paid less than $1 million annually in rental income and rents paid by government, nonprofit, arts and other tenants are exempt. Fifteen percent of the funds collected by Prop C goes to the city’s general fund, and the rest goes to child care.

It makes sense for large businesses to pay a tax for child care, advocates said, considering they possess some of the city’s greatest wealth and benefit from the availability of such care, since their employees need it to do their jobs. “Business is going to invest and support children in San Francisco so workers can go to work,” said Gina Fromer, CEO of the Children’s Council of San Francisco.

That was a key point supporters made during the 2018 campaign, volunteers said. Parents and providers held rallies, distributed flyers and did phone banking daily, targeting the people who would benefit most, said Maria Luz Torre, a Parent Voices organizer: women and low-income families.

“We even rallied at 555 California (Street). Trump is a co-owner of that building,” she said. “We rallied there to show these are the people who are paying for this, and not you.”

Isabel Daniels (left) and Pat Sullivan (right) run through activities with children at Baby Steps on Friday, Nov. 18, 2022, in San Francisco.

(Paul Kuroda / For The San Diego Union-Tribune)

Two months after Prop C passed, a coalition of landlord, business and taxpayer groups that had opposed the measure sued in an attempt to invalidate it. Those groups — the Howard Jarvis Taxpayers Association, Building Owners and Managers Association of California, California Business Properties Association and California Business Roundtable — argued that Prop C actually needed a two-thirds majority to pass because a government official, Yee, had been heavily involved.

“Our issue had nothing to do with where the money was going, but rather that it was an illegal tax,” said Brooke Armour, vice president of the California Business Roundtable, in an email.

But in 2021, a state appeals judge sided with the city, saying that because the measure had been placed on the ballot as a voter initiative — and because Yee’s involvement did not change that — it needed only a simple majority to pass. Later that year, the state supreme court denied the plaintiffs’ request to review their appeal.

San Francisco is lucky, Luz Torre said, in that it has a wealthy tax base to draw from to fund child care. Other counties may have to get more creative, she said.

At least one other California county has also passed a tax to fund child care. In 2020, just across the San Francisco Bay, voters approved a half-percent sales tax in Alameda County to raise child care workers’ wages and offer more subsidized care slots, as well as fund pediatric health care.

That measure, Measure C, has been held up for more than two years by a similar lawsuit. Last July, a trial court judge ruled in the county’s favor. The decision is now being appealed.

Raising wages to raise quality

Prop C is not just about raising pay for teachers, child care leaders said. It’s about professionalizing and improving the quality of a field that has long been underpaid, has often been degraded as babysitting and has lacked greater access to higher education and training.

Teacher Sophia Lam (center) supervises an animal card game with children at Baby Steps on Friday, Nov. 18, 2022, in San Francisco.

(Paul Kuroda / For The San Diego Union-Tribune)

Many child care providers have faced obstacles to gaining higher education and professional development, such as language barriers and a lack of money and time. Thirteen percent of family child care providers in California speak only a language other than English, according to the UC Berkeley Center for the Study of Child Care Employment. About half of family child care providers and 20 percent of child care center teachers lack a college degree, according to the UC Berkeley center.

To address this, San Francisco officials have long made their child care funding contingent on providers meeting the city’s quality standards. They plan to use Prop C funds to improve early educators’ access to higher education and training. Some have suggested funding apprenticeships, tuition reimbursement and other programs to build a pipeline of workers that child care, unlike other education fields, has lacked.

The wage increases and stipends that come with Prop C are only available to teachers working for the 416 child care providers and agencies who have met the city’s quality standards and who are willing to serve low-income, subsidized children.

“That’s a foundational requirement for us, because part of the reason why we justify this investment in early childhood education is based on research that shows that high-quality care makes a big difference,” Wang said. “The goal of our department is to get all children to school readiness standards and to make sure that their families are able to have the resources necessary to raise their kids.”

Among those city-required quality standards: Providers must have low adult-to-student ratios, have a certain number of early childhood education college units, and use a developmentally, culturally and linguistically appropriate curriculum approved by the city early childhood department.

To be approved for city child care funding, providers must be visited by independent observers who look for quality interactions between teachers, note areas for improvement and decide whether the program passes a quality test.

Isabel Daniels (bottom) runs through activities with children at Baby Steps on Friday, Nov. 18, 2022, in San Francisco.

(Paul Kuroda / For The San Diego Union-Tribune)

The city department created a new standardized salary structure for early educators, similar to the kind that school districts make for K-12 teachers. The model rewards higher compensation to teachers who serve more subsidized children and who have more higher education or an early childhood teaching permit.

Stipends range from $8,000 annually for full-time assistant teachers who have few or no early childhood education units and serve fewer than 20 percent subsidized children to as high as $39,100 for family child care owners who serve at least 50 percent subsidized children.

By making the funding available only to providers willing to serve subsidized children and boosting pay for those who serve more of those children, the city means to focus Prop C funding on the highest-need programs first, Wang said.

That could also help incentivize more providers to serve low-income, subsidized children. Historically, providers say they have not had much financial incentive to do so, because the state’s subsidized payment rates have been low.

But as providers and advocates statewide have warned, just adding funding for more children to receive subsidized care doesn’t automatically mean more kids will be served. Child care providers have to expand their staffing and facility capacity to take in those additional kids, too.

So San Francisco is budgeting for $35 million of Prop C to be used for child care facilities projects next fiscal year, Wang said.

And the city department continues to encourage child care programs that are not enlisted in the city’s quality network to join. The department offers onsite coaching and funding to new members to improve their facilities and take professional development, Wang said.

There have been challenges in rolling out the Prop C funds.

For one thing, child care programs are still seeing under-enrollment, Wang said. That could be due to parents’ anxiety about spreading sickness, be it flu, RSV or COVID-19. Some families choose to stay with their kids at home or have relatives, friends or neighbors watch them, while others take them to private programs. And child care programs are facing growing competition from public schools, as more children enroll in free transitional kindergarten.

Some programs are also still struggling to hire enough staff. But Wang has heard anecdotally for the first time that they are seeing higher interest and better-qualified applicants for jobs after Prop C. “Staffing is always an issue, but with the wage improvements, it’ll hopefully be less of an issue,” he said.

Owner Pat Sullivan (middle) supervises a card game with children at Baby Steps on Friday, Nov. 18, 2022, in San Francisco.

(Paul Kuroda / For The San Diego Union-Tribune)

The pay increases have already helped Pat Sullivan, a family child care provider of 30 years who owns the Baby Steps Nature School.

Like many family providers who run small child cares out of their own homes, Sullivan had not been able to pay herself from her business. And since providers can’t charge families more than they can afford to pay — which is far less than the true cost of providing quality care — she was barely breaking even.

To get by, many family providers depend on a spouse’s income. Without one, Sullivan has worked two other jobs on nights and weekends, too, teaching at local colleges. She had been working as much as 80 hours a week between all three.

Prop C changed that.

She was recently able to hire one new full-time teacher and two part-time teachers. She can now pay her teachers $28 an hour, she said, when she previously struggled to pay them $20 an hour.

Now Sullivan has some more time to run her business, rather than just teach children. She still works a lot — but “not the same way, not with the desperation I used to work with,” she said. She’s down to 60-hour weeks.

And finally, Sullivan earns an income from her business.

This story was produced as part of the USC Annenberg Center for Health Journalism’s 2022 National Fellowship.

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South San Francisco voted in favor of affordable public housing with Measure AA leading with 4,371 votes, or 57.5%, while Measure DD, a new tax on large businesses to fund child care for all children between 2 1/2 and 5 for residents and employees is falling short with 3,338 votes in favor, or 43.61%, according to semiofficial results as of 11 pm Tuesday by the San Mateo County Elections Office.

If the election results hold, Measure AA in South San Francisco authorizes the city to acquire, develop or construct low-rent housing, up to 1% of the total number of existing units, annually for eight years. The city will be able to use its $120 million in a special housing fund from commercial linkage fees to build 1% of the total number of existing housing units in the city. That equates to approximately 250 units per year, totaling around 2,000 units in the next eight years. The measure would override Article 34, a 70-year-old state law that states additional affordable housing units can only be built with public funds if passed through a voter initiative.

Councilmember James Coleman believes Measure AA passing is a good sign for an eventual statewide repeat of Article 34.

“The results are very clear that the residents want to see affordable housing and city-owned affordable housing or mixed-income social housing and now it’s up to our city leaders to deliver what the residents want,” Coleman said, adding that it gives the city ​​more tools on the tool belt when it comes to building more affordable housing faster.

“Over $100 million in impact fees for city-owned affordable housing. I’m looking forward to seeing ways in which that could happen,” he said.

South San Francisco’s Measure DD sought to provide universal early child care for families who live or work in the city by imposing an annual tax on large commercial offices generating approximately $55.9 million annually.

In other elections, the cities of San Mateo, Burlingame and Millbrae appeared to pass a series of tax measures, while Redwood City voters appeared to agree to tweak the city’s charter to allow the mayor to serve one-year terms so more councilmembers could serve while San Bruno seemed to limit terms of its City Council and separately elected mayor, according to the semiofficial results.

Belmont and Millbrae both proposed a transient occupancy tax, both of which are appearing to pass. Measure K in Belmont needed only a majority to pass and has 3,205 votes, or 78.98%. If it holds up, the measure approves a 14% tax to hotel guests in the city that is estimated to raise $600,000 annually, that will cover a budget shortfall, and will be a continuous tax until ended by voters. Measure N in Millbrae has a commanding lead of 2,660 votes, or 78.93% and will look to raise the occupancy tax for hotel guests from 12% to 14%, generating approximately $1.5 million annually to locally controlled funds to address service including funding for police and fire departments.

Burlingame appears to have passed a measure taxing marijuana delivery companies and are raising business license fees with 3,620 votes, or 75.42%, according to the semiofficial results.

Measure X would tax 5% of gross marijuana sales, generating $2 million to $4 million a year. Business license fees would increase from $100 for all Burlingame businesses to $200 to $750, based on a tiered annual income, with only 7% of Burlingame businesses having to pay the higher amount if they gross more than 1$ million or more. It would generate about $2.5 million annually and would provide revenue relief for the city that lost $20 million in transient occupancy taxes from its hotels during the pandemic.

Measures P and Z in Redwood City amends the charter for the city to shorten the term of mayor from two years to one allowing more councilmembers to serve as mayor, and aligns the city charter with the state law. Both appear to have overwhelming leads of 6,292 votes, or 62.95%, and 8,450 votes, or 85.76%, respectively, according to the semiofficial results as of 11 pm on Tuesday by the San Mateo County Elections Office.

Measure BB in San Bruno has a commanding lead with 4,690 votes, or 82.72%. It limits the terms of the City Council and separately elected mayor to no more than 12 consecutive years, according to the semiofficial results.

Measure CC holds a commanding lead with 9,655 votes, or 71.84%, in San Mateo and looks to increase the property transfer tax in San Mateo from .5% to 1.5% for sales more than $10 million. The transfer tax is expected to generate about $4.8 million, and the city said the funds would be used for street repairs, park improvements, emergency services and reducing traffic congestion. It would affect less than 1% of all properties sold or transferred in the city.

All results are according to semiofficial results from Tuesday, Nov. 8, which included votes by mail received by Friday, Nov. 4, and all ballots received at voting centers. Later results will include votes received after Saturday, Nov. 5. Post-election results will be released before 4:30 pm on Thursday, Nov. 10, Friday, Nov. 11, Monday, Nov. 14, Tuesday, Nov. 15, Wednesday, Nov. 16, Thursday, Nov. 17, Friday, Nov. 18, Monday, Nov. 21 and Wednesday, Nov. 23. Results will be certified Dec. 8th.

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