Children’s Council Celebrates the Passage of Prop C by CA Supreme Court

Nearly three years after SF voters passed the landmark proposition, “Baby Prop C” will direct $146 million to the SF child care community annually

On April 28, 2021, the California Supreme Court rejected the final appeal to Proposition C (aka “Baby Prop C”) by the Howard Jarvis Taxpayers Association, delivering a major victory for children, families and early educators in San Francisco and paving the way for $146 million to be directed annually to the local child care field.

This marks the end of a three-year battle against anti-tax business interests by a broad coalition of local child care champions including scores of child care educators and parent activists, Children’s Council of San Francisco, parent-led grassroots advocacy group Parent Voices of San Francisco, Child Care Law Center, Early Care Educators of San Francisco, and city leaders including former SF Board of Supervisors President Norman Yee and Supervisor Jane Kim.

Prop. C was authorized by the City & County of San Francisco after the June 2018 ballot measure was passed by San Francisco voters by 51%; the City Attorney’s Office has defended the measure’s legality through the court system.

“This moment is the culmination of decades of child care advocacy work and a historic turning point for our city’s children, families and early educators,” said Children’s Council CEO Gina M. Fromer. “San Francisco’s child care community has rallied and campaigned for three years to get these voter-approved dollars to families and early educators who so desperately need them, now more than ever.”

Prop. C establishes a long-term annual funding stream to address critical inequities that have faced San Francisco working families and child care educators for decades, including:

• Clearing the child care “waitlist” for vulnerable children to access subsidized child care
• Establishing living wages for early educators in the San Francisco public child care system
• Expanding child care financial aid to middle-income families  
• Meeting other critical system gaps with through early care & education supports
• Dedicating 15% of tax revenue to San Francisco’s General Fund

Although Parent Voices San Francisco and parent-organization Children’s Council, one of San Francisco’s two child care resource centers, were not the litigants in the case, the nonprofit organizations were key partners in the shaping and passage of “Baby Prop C,” and filed a “friend-of-the-court” aka amicus brief, telling the story of the decades of community activism that led to the measure.

Since the passage of Prop. C in June 2018, approximately $433 million in tax dollars from large commercial businesses ($1M+ in size) have already been collected and held in an escrow account. The funds will now be released and distributed through the San Francisco Office of Early Education, which works in close partnership with First 5 San Francisco.

More About “Baby Prop C” and the Three-Year Grassroots-Powered Legal Battle

On June 5, 2018, the voters of San Francisco passed Proposition C (Commercial Rent Tax for Child Care and Early Education), which imposes a gross receipts tax (Childcare Tax) of 3.5% on rentals of commercial space in San Francisco with a reduced 1% tax on rentals of warehouse space. The proposition, which only needed a simple majority vote (50% + one) to pass, was approved by SF voters by 51%. Nonprofits and other small businesses were excluded from the tax.

However, a lawsuit was filed by out-of-town business groups led by the Howard Jarvis Taxpayers Association, arguing that the measure required a two-thirds supermajority vote to pass. One year later, a superior court ruling sided with San Francisco’s child care community, stating that a simple majority was sufficient. It was appealed, and on January 27, 2021 the appeals court upheld the superior court’s ruling. Children’s Council and Parent Voices San Francisco worked with Keker Van Nest law firm whose pro bono work on the amicus brief to the state supreme court rejecting the Jarvis appeal played a key role in clearing the way for the final passage by the California state supreme court.

This ruling means that the aspects of San Francisco’s 2020 Prop F Gross Receipts Tax Reform that allowed the City to tap into already-raised Baby Prop C dollars will be nullified and all funds raised and to-be-raised will be dedicated to early childhood education as per the initial 2018 measure.

San Francisco Child Care Advocates Sound Off on Prop C

About the coalition of community advocates who worked so hard for this victory, Sara Hicks-Kilday, director of Early Care Educators of San Francisco said, “It takes many of us, but it takes everyone coming together. And I want to especially call out early educators for the work they did to help pass Prop C, then to stand for Proposition C as it was sued in the courts. And then to ensure we could access the funds that were being held in the coffers when we really needed by helping to pass prop F.” 

Norman Yee, retired San Francisco Board of Supervisors President and lifelong early education advocate said, “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. 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.”

According to Ingrid Mezquita, director of the San Francisco Office of Early Education, “The reality is that without child care, San Francisco’s economy would have a very hard time recovering. Working families need quality, affordable child care to get back to work. The fight for Prop C. has been a challenge and an opportunity to show how child care actually contributes to the economic impact of San Francisco. We’ve been able to get the wider community to understand and appreciate that the small investment that they make through Prop. C fees, at the end, are a huge return on investment for our children and for our overall economic vibrancy.

”Longtime Parent Voices activist April Leung says, “As a working mother of three, I know firsthand how vital Baby Prop C is for families. Seeing parents struggle without child care, I was motivated to do everything in my power to get Prop C on the ballot. I even won the Parent Voices signature collecting contest. I was inspired to educate my community via phone banking, and at visibility events at farmers markets, grocery store parking lots, parks and the beach. Getting positive feedback compelled me even more to dedicate a lot of time towards these efforts, with my children alongside me, all the way through election day in June 2018.”