Proposition H

Parcel Tax to Fund Public Muni Operations

Proposition H would fund Muni service through a new annual parcel tax on real estate at rates ranging from $129 per parcel up to a maximum of $400,000 per parcel, depending on the type of property and its size and adjusted annually for inflation, for estimated revenue of $177 million a year for 15 years.

This measure requires approval by a majority of voters voting on the measure to pass.

Fiscal Impact: Proposition H would generate approximately $177 million annually for Muni transit service starting in Fiscal Year (FY) 2027-2028, and would increase over time as the per parcel taxes are adjusted for inflation each year. The cost to administer this parcel tax could range from approximately $2 million to $3 million in one-time startup costs, and from approximately $4 million to $6 million annually in ongoing costs.

See Endorsements for Proposition H

Pro:

Supporters argue that Muni is a lifeline for our workers, seniors, and students. They say that 40% of San Franciscans who work downtown take Muni. Public transit is one of the smartest investments we can make in our local economy. Without Measure H Muni service will be severely reduced, killing the engine of our economic recovery and causing future cuts to emergency response, parks, and other city services.

Muni eliminated 500 vacant positions, trimmed management and doubled fare inspectors. Muni customer satisfaction recently hit a 25 year high due to safer and more reliable service. For years, one-time federal and state Covid relief kept Muni running. That money is gone. Despite strong actions to save $137 million dollars annually, without Prop H, service could be cut by 30%, at least 20 bus routes eliminated, and far worse traffic in our neighborhoods.

A YES vote on this measure means: you support adopting a new real estate parcel tax to fund Muni services.

Con:

Opponents argue that San Franciscans are being asked to fund Muni's $300 million deficit for 15 years with no strings attached. They say that while nobody wants longer wait times or service cuts, a new tax isn't the only option. Nothing in this proposition requires SMTA to cut costs, hit efficiency targets, or act on a spending review as a condition of receiving this money. The tax runs through 2042 regardless of whether ridership, fares, or costs ever normalize.

The measure calls for an "efficiency review," but not until April 2028, nine months after the tax kicks in. They say that the tax is based on square footage, not property value and argue that a modest home and a far more valuable one of similar size nearby will pay nearly the same amount. Renters aren't spared either, since landlords can pass through the tax increase to tenants.

A NO vote on this measure means: you are against adopting a new real estate parcel tax to fund Muni services.

Background

The San Francisco Municipal Transportation Agency (SFMTA) is a City department that manages Muni buses, light rail vehicles, streetcars, and cable cars. These services are funded by transit fares, and local, state and federal sources, but not through a parcel tax. Owners of rent-controlled residential property in the City are generally limited in what costs they can pass onto their tenants. State law limits the total revenue, including tax revenue, the City may spend each year. The voters may approve increases to this limit for up to four years.

Proposal

The measure would impose an annual tax on parcels of real property in San Francisco beginning on July 1, 2027, and continuing until June 30, 2042. The tax would be adjusted annually for inflation. The proposed 2027 tax rates would be:

Single-Family Residential Parcels: Base tax of $129 for the first 3,000 square feet of building area, plus marginal rates of: $0.42 per square foot of building area between 3,001 and 5,000 square feet, and $1.99 per square foot of building area over 5,000 square feet.
Multifamily Residential Parcels: Base tax of $249 for the first 5,000 square feet of building area, plus a marginal rate of $0.195 per square foot of building area over 5,000 square feet, capped at $50,000 per parcel.
Non-Residential Parcels: Base tax of $799 for the first 5,000 square feet of building area, plus marginal rates of: $0.76 per square foot of building area between 5,001 and 50,000 square feet, $0.84 per square foot of building area between 50,001 and 250,000 square feet, and $0.99 per square foot of building area over 250,000 square feet, capped at $400,000 per parcel.
Mixed-Use Parcels: Base tax of $799, plus a combination of the marginal rates for residential and non-residential parcels above if the mixed-use parcel has more than 5,000 square feet of building area, capped at $400,000 per parcel.
Parcels with No Buildings: No tax if the land area is up to 2,000 square feet, or $392 if the land area is over 2,000 square feet.

The tax would not apply to:

Properties or portions of properties not required to pay property taxes based on value.
The building area of any single-room-occupancy unit and any shared facilities.
Most properties owned and occupied as a primary residence by a person who is at least 65 years old would either be exempt from the tax or entitled to a tax reduction.

Owners of rent-controlled residential units could pass through up to 50% of the tax to their tenants, capped at $65 per unit, if the initial base rent was set before June 1, 2027. Revenues from the tax would be used exclusively for the costs of administering the tax and for SFMTA transit operations. This measure would increase the City’s spending limit for four years.

Source: Proposition H: Title and Summary

City and County of San Francisco Office of Elections

Pro:

Con:

Background

Proposal

2026 Propositions

2026 Local Ballot Measures

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