San Francisco may drop its boycott on funding travel or doing business with companies in states that have laws city officials consider discriminatory.

San Francisco Supervisor Rafael Mandelman introduced legislation this week that would repeal an administrative code that currently bans the city from entering contracts with companies whose headquarters is based in a state that has restrictions on abortion access, LGBTQ+ rights or voting rights.

“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,” Mandelman said.

The Administrative Code Chapter 12X was first enacted in 2016 as a statement of opposition against states passing anti-LGBTQ+ legislation. The code later expanded to states limiting abortion access and voting rights in 2019 and 2021, respectively.

“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.”

Supervisor Rafael Mandelman

Since the policy add-ons and the recent shift in abortion policies, the legislation bans activities like city-funded travel, as well as contracting, commodities and construction, with over half of the states in the U.S.

Upon request by a letter of inquiry from five supervisors, the City Administrator’s Office conducted an analysis of the legislation. It concluded in February that the ban has not clearly made an impact on other states’ economies or policies regarding abortion access or LGBTQ+ or voting rights, while adding an “additional administrative burden” for staff, vendors and citizens.

The City Administrator’s Office also noted that very few, if any, other local governments have as strict and expansive of bans as San Francisco’s.

Considering other options

The office listed five policy alternatives that the city could consider, including adding an exemption for construction-related services, repealing the contracting ban but keeping the travel ban or removing the policy entirely.

The repeal is backed by the author of the initial 12X Banned State policy, state Sen. Scott Wiener, D-San Francisco, as well as board president Aaron Peskin and supervisors Catherine Stefani and Hilary Ronen.

Proponents say that after the COVID-19 pandemic and supply chain limitations, the city needs to expand its pool of potential construction partners so bidder competition can increase, contracting costs can go down and infrastructure projects can be completed.

Peskin said the policy has been a serious obstacle for the city to quickly build affordable housing with good contracts.

“It will require some amount of political courage to finally untangle these layers of city bureaucracy, but this Board of Supervisors has shown a desire to tackle the unglamorous obstacles to an efficient government that works for all,” said Peskin.

Wiener said that when he first authored 12X, he believed a coalition of cities and states would boycott states advancing discriminatory laws, but it never materialized. He added that the policy is now penalizing business for “the sins of their radical right-wing governments.”

“Sadly, it’s time to acknowledge that this policy hasn’t worked and that we need to pull back,” Wiener said.

Also at its meeting Tuesday, the board voted to hold off on voting on a similar ordinance introduced by Supervisor Ahsha Safai. The legislation would allow the city to enter into contracts with contractors from states with discriminatory laws. The board will review the ordinance again on March 14.