Tax equity - Page 2

With the business community divided, can labor and progressives force a business-tax reform that actually increases revenue?

SEIU workers staged a massive rally on April 18 as part their campaign calling for downtown to pay more taxes

"When we talked about Prop C, we said if our members are doing this with our pensions now, we'll see next year what businesses do with business tax," said Larry Bradshaw, vice president of SEIU Local 1021. "Then we read about secret meetings where the labor movement was excluded from those talks."

Anger over the "secret meetings" of business leaders that Lee assembled to craft the tax reform measure — meetings at which no labor leaders were included — helped inspire the fierce protest campaign that defined the SEIU's recent contract negotiations.

In the first weeks of negotiations, workers were already up in arms. Protest marches at SF General Hospital and Laguna Honda Hospital brought hundreds of hospital workers to the streets. These hospitals serve some of the city's poorest populations: Laguna Honda patients are mostly seniors on Medi-Cal and General is the main public hospital serving the city's poor.

On April 5, city workers got creative with a street theater protest that involved six-story projections on the iconic Hobart Building. Protesters dressed as rich CEOs and handed out thank-you cards to commuters at the Montgomery transit station. SEIU's "The City We Need, Not Downtown Greed" campaign included a website (, slick video, and direct mailers portraying CEOs as panhandlers on the street asking city residents, "Can you spare a tax break?"

The most dramatic civil disobedience came on April 18, when more than 1,000 workers rallied outside City Hall — along with several progressive supervisors — and then marched to Van Ness and Market. Protesters blocked the street, resulting in 23 arrests. At that point, increases in health care cuts and pay cuts to city workers were still on the table.

That was followed the next week by hundreds of workers staging noisy demonstrations in City Hall, and then again on May Day when SEIU workers were well represented in actions that took over parts of the Financial District.

In the end, the demands of union representatives were met in the contract agreement. Health care cost increases and pay cuts were eliminated, and a 3 percent pay raise will kick in during the two-year contract's second year, a deal overwhelmingly approved by union members. Labor leaders hope to use that momentum to force a deal with the Mayor's Office on the tax reform measure — which some sources say is possible. Otherwise, they say the campaign will continue.

"We may end up on the streets gathering signatures soon," Daly said. "We need to figure it out in the next few weeks."




The Controller's Office released a report on May 10 that made the case for switching to a gross receipts tax and summed up the business community's meetings, and the report was the subject of a joint statement put out by Lee and Chiu. "After months of thorough analysis, economic modeling and inclusive outreach to our City's diverse business community, the City Controller and City Economist have produced a report that evaluates a gross receipts tax, a promising alternative to our current payroll tax, which punishes companies for growing and creating new jobs in our City'" the statement said. "Unlike our current payroll tax, a gross receipts tax would deliver stable and growing revenue to fund vital city services, while promoting job growth and continued economic recovery for San Francisco."

Daly and Avalos say progressives agree that a gross receipts tax would probably be better than the payroll tax, and they say the controller's report lays out a good analysis and framework for the discussions to come. But despite its detailed look at who the winners and losers in the tax reform might be, Daly said, "We haven't seen an actual proposal yet."

Lazarus made a similar statement: "Nobody likes the payroll tax, but the devil is in the details."

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