Sanders backs San Francisco tax hike on overpaid CEOs for budget shortfall

Bernie Sanders has thrown his support behind a San Francisco tax hike aimed at the city’s highest-paid CEOs, but the ballot fight is really about whether voters want to close a budget gap by taxing executive pay instead of cutting services.

Proposition D will go before San Francisco voters in the June 2 election under the official title, Increases to Business Tax Based on Comparison of Top Executive’s Pay to Employees’ Pay. The measure would amend the city’s Business and Tax Regulations Code and raise the existing Overpaid Executive Gross Receipts Tax, which already applies to some large businesses when their highest-paid managerial employee earns more than 100 times the median compensation paid to San Francisco employees.

Supporters say the proposal could bring in roughly $200 million to $300 million a year. That would come as the city’s finances remain under strain: San Francisco’s March fiscal update showed a projected FY 2026-27 general fund shortfall of $168.5 million and a structural deficit that grows to more than $1 billion during the forecast period. An earlier five-year plan projected a cumulative General Fund shortfall of about $1.47 billion by FY 2029-30.

The debate revives a fight over Proposition M, the November 2024 business tax overhaul that reduced taxes on many businesses and significantly lowered the overpaid executive tax rates. Supporters of Prop D say Prop M went too far in cutting taxes on large corporations. Opponents say the city should not reverse that reform just as downtown is still trying to recover.

That argument has sharpened into a labor-versus-tech showdown. The union-backed coalition Stand Up for SF says the measure is meant to protect city services as federal funding cuts and layoffs threaten programs. Tech leaders and business allies counter that the tax is punitive and could discourage investment or push firms out of the city. The city’s ballot materials include a paid no argument warning that Prop D could worsen the fragile downtown recovery and hurt businesses that provide jobs and tax revenue.

The measure lands in the middle of a broader City Hall budget struggle led by Mayor Daniel Lurie, who presented a $15.9 billion proposed budget and said it closed an historic $800 million deficit. But the latest numbers show the long-term fiscal problem has not gone away, and Prop D is now one of the clearest tests of whether San Francisco will try to balance its books by leaning harder on its largest employers.