San Francisco supervisors have pushed back a vote to ax San Francisco's ban on city agencies doing business with companies headquartered in states that have adopted anti-LGBTQ laws, abortion bans, or restricted voting access in recent years. They did so amid objections from local minority and LGBTQ business owners who fear it will negatively impact them.
Meanwhile, gay District 8 Supervisor Rafael Mandelman Tuesday introduced an ordinance to completely jettison the city's policy on banning travel to, and doing business in, conservative states. Joining him as co-sponsors were Supervisors Catherine Stefani of District 2 and Hilary Ronen of District 9, and Board President Aaron Peskin, who represents District 3.
"Repealing 12X will increase bidder competition and lower contracting costs, saving San Francisco tens of millions or more each year. And it will better advance our social policy goals by allowing us to engage with the actual communities impacted by restrictive LGBTQ, abortion, and voting rights policies," stated Mandelman in announcing the ordinance. "I've said it before: The best pressure we can apply on red states is to show that progressive San Francisco can be effectively governed."
District 11 Supervisor Ahsha Safaí had requested the vote on his ordinance be postponed until the Board of Supervisors' March 14 meeting in order to continue to meet with business leaders in the city. He had introduced last November the ordinance to do away with the contracting ban.
But when the supervisors' rules committee, which Safaí sits on, finally brought up the revision to the city policy known as 12X at its February 13 meeting, local business leaders complained they had not been consulted about doing so. Safaí pledged to meet with them to hear out their concerns, and at Tuesday's full board meeting, asked for the continuance in order to continue having those discussions.
"We have had some of those conversations, but I want to give space to continue those conversations," said Safaí, who had voted to institute the 12X policy when it was first proposed.
The 11 supervisors unanimously voted to grant the continuance, though District 7 Supervisor Myrna Melgar suggested even more time was needed to gather community input into changing the 12X policy. It also includes a prohibition on most taxpayer-funded city travel to the 30 states that are now covered by the policy, though the travel ban would not be impacted by Safaí's ordinance.
"If we are going to undertake reform to it, we need to do it judiciously," said Melgar, adding that she feared two weeks wasn't "adequate time to engage the community."
District 10 Supervisor Shamann Walton reiterated his opposition to the proposal that he originally had expressed during the hearing at the rules committee, of which he is vice chair. A main objection of Walton's is seeing a change in the 12X policy end up rewarding large multinational companies headquartered in states that have taken legislative action against the values that San Francisco and its residents support.
"In my opinion this will just support folks in support of these discriminatory laws," said Walton.
The 12X policy was first enacted in 2016 and initially only covered those states that had passed laws as of then that discriminated against their LGBTQ residents. In 2019, the policy was extended to include states that restricted abortion, and again in 2021 to include those with voter suppression laws. California also has a law banning most taxpayer-funded travel to states that have enacted anti-LGBTQ laws over the last eight years but does not ban contracts with companies in those states.
With more than half of the country now on San Francisco's banned list, critics argue it is hampering the ability of city departments to find qualified contractors. They also insist it's increasing the cost of projects because companies that could do the work less expensively are not bidding on them in the first place if they are located in a banned state.
Detractors of 12X, such as gay District 6 Supervisor Matt Dorsey, also contend it has not achieved its goal of convincing lawmakers in the covered states to repeal the laws that landed them on San Francisco's banned list. According to a 16-page memo the City Administrator's Office sent to the supervisors earlier this month, what impacts the 12X policy has had in other states "are not clear."
It did conclude that the 12X policy "has created additional administrative burden for city staff and vendors and unintended consequences for San Francisco citizens, such as limiting enrichment and developmental opportunities."
The memo came at the request of five supervisors who last October asked the city office to review the 12X policy. Among them was Mandelman, who is supportive of updating the contracting ban but had been working on his own ordinance for doing so.
"I don't think the right way to make change is to flip the bird and walk away," he had told the Bay Area Reporter, which editorialized last week that the supervisors should slow down their decision-making process in regard to the 12X policy.
In a letter sent to the rules committee and shared with all the supervisors, the San Francisco Latino Black Builders Association questioned if there was data showing that a change in the 12X policy was warranted. It beseeched the supervisors to ask city agencies to show that there has been a decrease in efficiency of work or an increase in costs because of the contract ban.
"We support the intent of the original ordinance and the support that it offers to LGBTQ communities throughout the country. We also agree with the notion of supporting local and California businesses," wrote Anne Cervantes, a founder and co-chair of the association.
But gay former District 8 supervisor Scott Wiener, now a state senator, is calling on the current supervisors to repeal the entirety of the 12X policy that he originally had authored. It is no longer sound public policy, he contends.
"When I authored 12X, we believed a coalition of cities and states would form to create true consequences for states that pass these despicable, hateful laws," stated Wiener. "Yet, as it turned out, that coalition never formed, and the full potential impact of this policy never materialized. Instead, San Francisco is now penalizing businesses in other states — including LGBTQ-owned, women-owned, and people of color-owned businesses — for the sins of their radical right wing governments. Moreover, San Francisco city staff are unable to fly to a large number of states for critical needs, whether collaborating on HIV prevention and treatment strategies or working together on critical transportation strategy. Sadly, it's time to acknowledge that this policy hasn't worked and that we need to pull back."
UPDATED 2/28/23 to include the new ordinance introduced to repeal all of the 12X policy.
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