Oct 26, 2022 - News

Opposition to states ban mounts in San Francisco

Illustration of San Francisco City Hall with lines radiating from it.

Illustration: Brendan Lynch/Axios

Momentum is building within City Hall to revise — or completely get rid of — a San Francisco ban on doing business with companies headquartered in states with laws deemed discriminatory.

Why it matters: Limiting businesses that can bid on a city contract can, theoretically, increase the overall cost of a project, which is especially problematic in San Francisco, where even a single, public toilet can cost well over $1 million to build.

By the numbers: In an analysis released last week, the Board of Supervisors budget and legislative analyst wrote that "while it is difficult to measure how the City's contracting costs have been affected" by the ban, "researchers have found that full and open competition for contracts can result in savings up to 20 percent."

  • Assuming a 10-20% cost savings, the city could have paid an estimated $23.5 million to $47 million more on just 13 contracts from 2016 had they been subject to the ban.

Catch up quick: The San Francisco Board of Supervisors first passed "Chapter 12X" in 2016, to ban city-funded travel to, and doing business with, companies headquartered in states with certain anti-LGBTQ laws that were enacted after the Supreme Court decision to legalize same sex marriage nationwide.

  • In 2019, the board widened the ban to include states with anti-abortion laws, and in 2021, they expanded it again to include those with voter suppression laws.
  • Today, San Francisco does not pay for employee travel to or do business with companies in 30 states.
  • And while California and other states have enacted similar travel restrictions, city administrator Carmen Chu told Mission Local earlier this year that "no city has reached out to say they want to mirror our rules" when it comes to boycotting businesses.

What they're saying: "I don't think the ban is doing anything to change the actions of certain states," District 9 Supervisor Hillary Ronen told Axios. "When a policy makes doing business more expensive and doesn't accomplish the goals it was passed to accomplish … it's time to change that policy. And I think there's widespread agreement on that."

  • Ronen, along with four other supervisors, including District 8's Rafael Mandelman, wrote a letter to Chu last week asking the city administrator to "develop a recommendation" on possible amendments to the policy.
  • District 4 Supervisor Aaron Peskin told Axios that support for revisiting the policy amongst board members is "growing by the day."

Even former city supervisor and current state Sen. Scott Wiener, who sponsored the original ordinance in 2016, told Axios this week that he has "reevaluated" his position and "no longer supports the [contract] restriction" within Chapter 12x.

  • Weiner said he didn't expect so many states would eventually fall under the ban and that the policy — which he described as a "blunt instrument" — had the unintended consequences of hurting businesses run by "people we want to support," like those that are a part of the LGBTQ and Black communities, but happen to live in boycotted states.
  • It also prohibits the city from getting "the best product [and] the best price," he said.

What's next: Supervisors have requested that Chu provide her policy recommendations by the end of March 2023.

  • To make changes or completely do away with Chapter 12x would require a majority vote from the Board of Supervisors and a signature from Mayor London Breed, who also thinks the policy needs to be reformed, her spokesperson Jeff Cretan told Axios.

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