Bad faith - Page 3

Newsom and his business allies work to kill proposed revenue measures by any means necessary

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Board of Supervisors President David Chiu speaks at a July 6 rally for labor unions seeking an increase in the hotel tax

"You're trying to create a little revenue here and it's not going to work," said Ken Cleaveland, director of BOMA SF, arguing that big banks and financial services companies — entities exempt from the payroll tax that Chiu is hoping to target with the commercial rent tax — will buy their buildings to avoid paying the tax. "They aren't going to create more jobs and they really aren't going to create more revenue."

Yet Chiu noted that it was the business community and fiscal conservatives who pushed to create the Office of Economic Analysis, whose work they have regularly used to attack progressive legislation. Now that the office has concluded that a piece of progressive legislation is good for the local economy, Chiu told Cleaveland and the Chamber spokesperson Rob Black at the hearing, "I ask you to respect the work this office has done."

Black said the Chamber board will consider Chiu's amended legislation, but said businesses are in no mood to help the city. "How many times have you gone to your neighborhood merchant and had them say, 'Gee, my rent's too cheap'?<0x2009>" he said during his testimony.

Yet Chiu said landlords of small tenants (those paying less than $65,000 in rent per year) are exempt from the rent tax and only 26 percent of SF businesses would pay any city business tax under his plan. "I hope the mayor will support this proposal and the business community will give it a good look," Chiu said as the hearing ended.

At the beginning of the hearing, Chiu framed the dire situation facing San Francisco, citing Controller's Office figures showing this year's $500 million budget deficit (out of a $6 billion total budget) will be followed by a $700 million deficit next year and a $800 million gap the following budget cycle as a result of a deep structural budget imbalance.

"We have budget deficits as far as the eye can see," Chiu said at the hearing. "We have to consider measures that will provide more stable sources of revenue."

He also noted that city employee unions have agreed to give back about $250 million in salary and had their ranks reduced by about 2,000 workers in the last two years. So he and the other progressive supervisors say it's time for the rest of San Francisco to help address the problem.

"We, as a city, should not be trying to balance this budget simply through cutting," Sup. David Campos said.

Sup. John Avalos, the committee chair, amended his transfer tax measure in the wake of Newsom's rejection of the deal by making it a simple 2 percent tax on properties that sell for more than $5 million, and 2.5 percent tax on properties over $10 million. He estimates it will bring in about $25 million per year from the city's wealthiest corporations and landlords.

"That's who we're socking it to," Avalos told us, saying he was disappointed the compromise fell through. "The amendment is going to be more progressive than what was originally planned."

Even Sup. Sean Elsbernd, a strong fiscal conservative who announced early in the hearing, "You want to do that [balance future budgets] by adding taxes, but I want to do it through ongoing service cuts," later told the Guardian that he was intrigued by the amendments Avalos and Chiu made to their measures and has not yet taken a position on them.

Sup. Ross Mirkarimi is also sponsoring a measure to increase the city's tax on parking lot operators from 25 percent to 35 percent, the first change to that tax in 30 years, and will include valet parking for the first time. The measure would bring in up to $24 million per year, and OEA analysis shows it would decrease the number of cars trips by 1.3 percent, another benefit.

Comments

Calvin Welch gets rolled again and it is not he who suffers, he still gets paid.

What kind of record of failure would he need to pile up in order for the community to revoke whatever confidence it has in Welch and ask him to move on?

"Poorly needed construction jobs" in San Francisco are our own equivalent to "poorly needed deep water drilling jobs" in the Gulf. Ill advised reliance on both have led to economic catastrophe, because both are unsustainable and bring unacceptable risks.

The risks in the gulf are apparent, but the risks of housing fetishization locally are the front end of the real estate speculative bubble that crashed the economy. San Francisco is too small, even in the most optimistic upzoning scenarios, to support construction sustainable, just as the Gulf of Mexico is too deep to support drilling sustainably.

-marc

Posted by marcos on Jul. 15, 2010 @ 10:43 am

Welch had no credibility in any event but what is much more interesting here is how the city deals with the impending fiscal crisis. You have only to look at the dire mess Oakland is in, laying off cops, to see our future writ large.

You can cut and cut but eventually fire and cops consume 75% of your budget, as in Oakland.

You can pass parcel taxes, if the voters let you, and nickle and dime folks on fees, but eventually the people will rebel.

Such issues take the highest quality of leaders and sadly we don't have them. The NIMBY activists like Welch, Shaw and Hestor are already discredited. The BofS fiddles while Rome burns. And the mayor, while competant, has his eyes elsewhere.

Who will save us? Nobody we can see right now. And it doesnt help that those senior entities that might otherwise bail us out, e.g. the State and the Feds, have their own horrific debt issues.

Home prices? Ha!

Posted by Folly on Jul. 15, 2010 @ 11:27 am

Newsom lead us to where we are right now. He negotiates the contracts and dictates the budget and the Board gets to chip away at the edges. Newsom is not competent.

That said, neither progressives nor conservatives are doing a very good job of articulating a vision for reconciling municipal government with the 21st century economy. Our institutions of government, tax structure, schools bureaucracy and labor unions are vintage 1930s political infrastructure which might have worked once but no longer function under different circumstances.

The contest should be over what values and priorities drive that transformation. A good first step would be to marginalize those who led us into this mess. But if practice holds, they will be rewarded with promotions. If we can't help but kick the demonstrably incompetent upstairs, then we don't deserve better than we get.

Those interests which have outsourced or not been politically capable of stopping the outsourcing of good jobs are not competent. We need to be setting the economic standard for solutions based on the early 21st century economy to diverse, sustainable job generation, access to affordable health care, for delinking speculation and land use, and guaranteeing retirement security and dignity.

-marc

Posted by marcos on Jul. 15, 2010 @ 2:37 pm