Universal Mental Health, With New Tax, May Go on San Fran Ballot

May 28, 2019, 11:40 PM

San Francisco companies that pay CEOs 100 times the companies’ median wage would be taxed to fund universal mental health and substance abuse programs under a proposal that could go before voters in November.

The proposal unveiled May 28 would impose a 0.1% gross receipts tax on affected companies. Two-thirds voter approval is required to approve the tax, which is expected to raise $80 million annually.

The Board of Supervisors also will consider a separate ballot measure that seeks to create a 1.12% tax on stock-based compensation. The combined proceeds would fund the mental health program.

The proposal, called Mental Health SF, would provide immediate mental health and substance abuse treatment for individuals in crisis. It would also cover the costs of psychiatric medication.

The plan builds on Healthy San Francisco, the nation’s first universal health program that provides health services to 14,000 uninsured San Francisco residents. San Francisco spends $370 million annually on mental health and substance abuse services to more than 30,000 patients.

“Mental Health SF will be the first overhaul of San Francisco’s disconnected, disjointed, and broken mental healthcare and substance use system in decades. It will make San Francisco the first city in the country guaranteeing the right to mental health care,” Supervisor Matt Haney said in a statement.

The proposed initiative to create the program and the companion funding initiative will be formally introduced at the Board of Supervisors’ June 4 meeting.

Risky Move?

One observer expressed skepticism about creating a program to be funded by fluctuating taxes.

There’s little question the region and state need to do “a far better job of providing mental health care services,” said Rufus Jeffris, Bay Area Council senior vice president. The council represents 300 of the region’s biggest employers, including Salesforce, Uber, and the University of California.

“A big danger in this proposal is relying on highly volatile jobs and wealth taxes to fund an ongoing expansion of services. And given criticism about a lack of coordination and coherence in a system that some have described as `devastatingly broken,’ voters will need to decide whether spending more money is the right approach,” Jeffris said.

The Excessive CEO Salary Tax initiative would impose a 0.1% surcharge on companies whose CEOs make more than 100 times more than their median workers. The surcharge will increase to 0.2% when a CEO earns 200 times more than the median employee, 0.3% at 300, and by 0.1% with each additional 100 times rates of difference.

To contact the reporter on this story: Joyce E. Cutler in San Francisco at jcutler@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloomberglaw.com; Peggy Aulino at maulino@bloomberglaw.com

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