Baby Prop C Fact Sheet – Legal Uses and Allocations
Legislation & Community Engagement
On June 5, 2018, 51% of the San Francisco electorate passed Proposition C (Baby Prop C), a Commercial Rent Tax for Child Care and Early Education by authorizing an additional tax on commercial property/leases with annual gross receipts over $1 million; excluded from this tax are nonprofits and other small businesses.
In December 2018, a City Ordinance passed amending the Administrative Code to establish the Early Care and Education for All Initiative, funded by appropriations from the Babies and Families First Fund. This ECE for All Initiative called for a nine-month planning process and charged the Office of Early Care and Education (OECE) to engage community to create a spending framework for the first five years of Prop C funding. The language in the ordinance provided guidance for uses of the funds to reflect the language included in the original ballot measure:
- Providing support for quality early care and education to all San Francisco children under the age of six from households whose incomes are at or below 85% of State Median Income, and who are listed as eligible, on that basis, to receive support for early care and education— but who, because of a lack of available resources, are not receiving the full amount of support to which they are entitled;
- Providing financial support for measures to increase the compensation of early care and education professionals and staff by not less than 10%, with an ultimate goal of achieving parity in compensation with K-12 educators who have commensurate experience, in a manner designed to improve the quality and availability of early care and education;
- Providing support for quality early care and education to all San Francisco children under the age of four whose families earn up to and including 200% of Area Median Income, in a manner proportionate to family income (such that families with lower incomes receive proportionately more support);
- Undertaking other measures designed to improve access to quality early care and education services that support the physical, emotional, and cognitive development of San Francisco children under the age of six.
The community planning process undertaken by OECE engaged over 3,000 San Francisco multi-stakeholders participating in various sessions – bringing together parents, families, teachers, early care and education administrators and community members. The result, a comprehensive BABY PROP C FRAMEWORK that outlines the community priorities for this fund.
The Howard Jarvis Taxpayers Association (aka Jarvis Group) threatened the ECE for All initiative by challenging the legality of Prop C in court, claiming that a two-thirds super majority was required to raise taxes. The California Supreme Court rejected the Jarvis Group final appeal to Proposition C in April 2021, affirming the legality of the tax and upholding the will of San Francisco voters, delivering a major victory for children, families and early educators in San Francisco.
OECE will administer Prop C funds with a commitment to the voters of San Francisco to implement the highest priorities of the ECE for All Initiative, to ensure children access high quality early care and education, and to increase compensation for the professionals working in this critical sector of our economy.
Nonetheless, recent questions raised for the approved uses of Prop C funds necessitates OECE to provide information to the public. The Baby Prop C ballot measure outlined uses for tax collection when passed. Fifteen percent of the revenue collected is for the city/county General Fund for any uses determined by the City. The remaining 85% of the tax collection is designated for child care and early education, and funds the following eligible programming:
- Support for quality early care and education for children under the age of six in San Francisco families at 85% or less of State Median Income (SMI);
- Support for quality early care and education for children under the age of four in San Francisco families earning up to 200% of the Area Median Income (AMI);
- Investment in comprehensive early care and education services that support the physical, emotional, and cognitive development of children under the age of six;
- Increasing compensation (including but not limited to wages, benefits, and training) of care professionals and staff in order to improve the quality and availability of early care and education for children under the age of six.
Moving forward, OECE is embarking on a period of community engagement and input to inform joint strategic planning with First 5 San Francisco. OECE and First 5 recognize the experiences and relationships of children in the first five years of life shape the architecture of their brain and build a foundation for future learning and success. Our planning process will center on the needs of quality early learning experiences during the earliest years to help set children on a path to thrive in school and life, while supporting their families. Accordingly, our joint strategic priorities will continue to mirror the Prop C language supported by San Francisco residents:
- Expand access to high quality, free/affordable early care and education, including greater support for low- to moderate income families
- Finance infrastructure and provide operating support to build out and sustain birth to 3 capacity (largest population on the waitlist)
- Improve educational qualifications and degree attainment for educators, and recruit and retain them through increased compensation
For more information on Prop C, Strategic Planning and the latest research on healthy child development, visit the OECE website www.sfoece.org.