Newsom proposed tax cuts as "local economic stimulus" during his Jan. 13 State of the City speech.

Luke Thomas/Fog City Journal

There’s a crazy disconnect in City Hall these days over how to help the local economy. Mayor Gavin Newsom has spent much of the last month focusing on “jobs” and “local economic stimulus,” proposing to give a few million dollars in tax breaks to local companies while refusing to discuss new tax measures to help close the city’s $522 million budget deficit.

As we explain in detail in tomorrow’s Guardian, economists just don’t think the tax cuts will help the economy much at all – particularly if the city is reducing its spending and payroll to do so -- but even some progressive supervisors are playing along to appease the anxious business community. For example, Board of Supervisors President David Chiu supports an extension of the biotech tax, denying city coffers the benefit of efforts by the city and UCSF to become an important hub for the industry.

Then, in today’s Chronicle, Newsom floats the idea of unilaterally shortening the workweek for city employees in order to save $50 million in payroll costs, firing 10,000 workers and then rehiring most of them to do so. But let’s be clear about this: that means removing $50 million from San Francisco’s economy, or even more once you figure in the multiplier effect that would more than double that loss.

As much as Newsom and his Chamber of Commerce allies love to bash government, the city is one of San Francisco’s largest employers, a clean industry with good-paying jobs. And it just makes no sense why they prefer to inflict mass layoffs on that employer – not to mention the reduced city services that will hurt even private sector productivity -- rather than increase taxes on large corporations that ship their profits out of the city and therefore offer minimal benefits to this city’s economy.