Jane Kim's credibility problem

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Sup. Jane Kim, after her Guardian endorsement interview, which resulted in us giving her our number two endorsement.

(UPDATED AND CLARIFIED ON 4/7 BELOW) Two weeks ago, when Sup. Jane Kim voted to move the Twitter/mid-Market/Tenderloin tax exclusion zone forward before Twitter had agreed to a community benefits agreement (CBA), over the objections of Sup. Ross Mirkarimi and other opponents of the legislation who wanted a chance to review the CBA, she announced at the Budget & Finance Subcommittee meeting that she would delay the vote if the CBA wasn't approved by the day before the hearing.

Today, the full board is scheduled to consider approving the legislation and Twitter has not yet agreed to a CBA, which is the only thing the city gets in return for giving the company a $57 million tax break. So, during a rally this morning at City Hall against the CPMC project, I asked Kim whether she would keep her word and delay the legislation.

No, she said, they will be voting today to approve it and then they'll approve the CBA later as trailing legislation. When I pointed out that she was going back on her word and reminded her of the comments she made publicly two weeks ago, she said, “Well, the community understands and wants us to move this forward.”

What community, I asked, noting that much of the community opposes the legislation. She said, “SOMCAN is OK with this,” referring to the South of Market Community Action Network, whose members were perhaps the most vociferous opponents of the legislation at that March 23 committee hearing, their members uniformly asking that the legislation be delayed until after a CBA is approved by Twitter and subjected to community input.

After that conversation, a SOMCAN member who overheard the exchange confirmed that the organization continues to oppose the legislation, although City Hall sources tell us that Kim's office has assured the group that it will get money out of the final CBA. It is illegal for supervisors to direct funding to specific groups in such agreements, which are negotiated by the Office of Economic and Workforce Development, as Deputy City Attorney Cheryl Adams testified at the March 23 hearing.

UPDATE AND CLARIFICATION: Kim legisiative aide Matias Mormino and SOMCAN organizational director Angelica Cabande strongly deny the organization was promised financial compensation from the Twitter CBA, saying the only assurance the organization was given was Kim's pledge to create legislation designed to prevent the displacement that SOMCAN fears this legislation will create. Cabande also told us, " The CBA will keep the corporation accountable to our neighborhood and residents' concerns by specifically defining how Twitter's presence will benefit the surrounding low-income communities." 

Kim has made several statements about this legislation that weren't true or were contradicted by the testimony of City Economist Ted Egan, as we've reported. Previously, she has also lied to others about statements I've made in conversations with her and about whether she's ever met privately with Willie Brown, who supported her supervisorial campaign with an independent expenditure mailer that was illegally created in her campaign manager's office.

Kim's sponsorship of this tax break legislation comes despite the fact that she's said she generally opposes such supply-side economic schemes. In his economic analysis of the legislation, Egan recommended doing a parcel tax on vacant commercial property as a better way to address vacant storefronts in mid-Market, the problem that Kim and others have claimed that this legislation is about.

I asked her about that recommendation during the March 16 committee hearing and she said that she strongly supports the proposal and that she has directed her staff to work on it. Is she going to keep her word and follow through on that pledge? I'll believe it when I see it.

Comments

The definition of "working together," say anything that sounds good at the time and then vote however you want later.

Posted by Guest on Apr. 05, 2011 @ 12:11 pm

they will treat employees like google - they will never need to leave the office to purchase food or other items - so recalculate sales tax and other benefits to local business and the city.

and anyone who walks down market today from 9th to 5th will be pleasantly surprised at the number of new businesses or work to open ones - not the definition of blight.

Posted by ok then on Apr. 05, 2011 @ 12:16 pm

for their staff, they're still buying it, right?

So there is your sales tax. While if they were in Brisbane, San Mateo County would be getting that.

Posted by TheDoc on Apr. 05, 2011 @ 2:34 pm

@TheDoc, You can't be that naive. They'll buy bulk food from out of town trucked in from something like Sysco whih increases their sales and nothing in taxes for SF, increases congestion on the streets plus increasing polution without reproach.

As a doc, looking at this holistcally is essential.

Posted by TheFood on Apr. 08, 2011 @ 11:33 am

Working together means alienating successive constituencies in your district and not expecting to be recalled.

Posted by Guest on Apr. 05, 2011 @ 12:24 pm

Letting constituencies of dozens run the city.

Posted by maltlock on Apr. 05, 2011 @ 1:07 pm

I am just sick over all of this. She has sold out the Tenderloin and surrounding areas.

Posted by Granny Gear on Apr. 05, 2011 @ 12:39 pm

lack any credibility whatsoever on most, if not all, issues in the city it's hard to see how your POV that Jane Kim lack credibility is, well, credible at all.

This piece reeks of desperation as Steven flails madly, unable to accept the fact that kapo Chris Daily is out of office and the "progressives" on the board have completely marginalized themselves.

Fait accompli :-)

Posted by Lucretia Snapples on Apr. 05, 2011 @ 12:57 pm

This constant picking over passing comments is getting a little tedious. The Guardian is stuck in the past, your candidate didn't win in D6 or any other district. You are on the wrong side of so many issues now. Get over it and go out and talk to people normal working people (may be hit some bars other than the Buck Tavern) in SF to get a feeling for what we care about.

Posted by Chris Pratt on Apr. 05, 2011 @ 12:58 pm

The loudest and most entitled claim to represent the community, while the majority of the community has jobs and lives that don't involve perpetual outrage.

Speaking of credibility how many people does SOMCOMN represent? In the dozens I suppose.

Posted by maltlock on Apr. 05, 2011 @ 1:05 pm

Taxing stock options is so obviously stupid that no other city in the world would even consider it. This is not a tax-break. It is forcing the issue of a horrendously ill-conceived tax overreach.

Posted by Guest on Apr. 05, 2011 @ 1:12 pm

as if it were the same as salary (which it blatantly is not) and so now spends all this time carefully crafting exceptions to that dumb law to keep exactly the type of companues who would other wise leave the City.

Time to change that law.

Posted by TheDoc on Apr. 05, 2011 @ 2:37 pm

See also Jane Kim's not-asshole problem and her not towing the guardians progressive party line problem

Posted by Bob on Apr. 05, 2011 @ 1:16 pm

Ordinance 0026-04, Amendment to Business and Tax Regulations Code - Business Tax, passed the Board of Supervisors unanimously, first reading by 11 votes, second reading, Sandoval absent, by 10 and was signed into law by Gavin Newsom. Hardly the work of the looney left wing radicals.

This is the legislation that, scant seven years ago expressly defined stock options as compensation. My recollection is that the smart of the popping of the dot.com bubble was fresh in everyone's mind, hence the move to rein in the excesses.

Since one reliable definition of being in a bubble is that the boosters of that bubble claim that it is not a bubble, one can see this repeal as ratification of the fact that we are indeed in a bubble, the promises of political advancement eclipsing rational economic policy.

I've got no problem with the city taking a cut of the massive capital gains that larger firms that go public experience with an IPO, given that we're barely taxing them now and providing the environment where they can be successful. If that forces companies to move, big deal, there's more coming to take their place.

-marc

Posted by marcos on Apr. 05, 2011 @ 1:28 pm

Most everyone acknowledges there was a bubble, but its the looney left radicals that can not move on and admit this obvious mistake; and the consequences of bad legislation.

Posted by Chris Pratt on Apr. 05, 2011 @ 2:15 pm

Counting on a company like Twitter as an anchor tenant to revitalize an entire district is hardly moving on and admitting obvious mistakes.

"Warren Buffett Warns of Bubble"

http://www.nbcbayarea.com/blogs/press-here/Warren-Buffett-Warns-of-Socia...

Posted by Guest on Apr. 05, 2011 @ 3:05 pm

There is a bubble. We are in one now. It has to do with quantative easing and bailouts for financial institutions so that investors are sitting on hoardes of cash.

What do you do when you're in a bubble, continue to help inflate it, or take economic countermeasures to insulate your jurisdiction for when it pops?

-marc

Posted by marcos on Apr. 05, 2011 @ 6:09 pm

This constant barrage of the same totally empty comments over and over gain, from posters like Matlock, Evans, Snapples and Pratt, which barely (and only tangentially at best) address the issues in the articles, just so the commenters can repeatedly bash either the left and/or other commenters, is totally intolerable, and doesn't serve -either- a conservative -or- progressive analysis.

There are ways to identify the individual machines and network hubs through which these yahoos are commenting and cut them off.

Please.

Please...

Do it.

Posted by Eric Brooks on Apr. 05, 2011 @ 2:48 pm

I agree. I think this site should be 24/7 Eric Brooks and Marc Salomon.

Posted by Bob on Apr. 05, 2011 @ 3:06 pm

where anyone he disagrees with is censored.

Posted by TheDoc on Apr. 05, 2011 @ 6:21 pm

I like the fact that your comment is to the point of the article, and that you choose never to call people names.

Posted by Guest on Apr. 05, 2011 @ 3:06 pm

"Webmaster PLEASE Start Cutting Reactionary Nonsense Comments."

- Eric Brooks

I love watching people who claim to be progressive calling for censorship of ideas they disagree with.

This is the same Eric Brooks, by the way, who once announced that he would stop reading posts by people he disagreed with. Apparently he is unable to exercise the self-control needed to carry out his resolution. So he wants the authorities to act for him.

There's a book he might be interested in reading:

"The Authoritarian Personality" by Theodor W. Adorno et al., published in 1950.

Posted by Arthur Evans on Apr. 05, 2011 @ 3:07 pm

Also the same Eric Brooks who sees Democracy as applying only to a select group of people - of his choosing.

Posted by Bob on Apr. 05, 2011 @ 3:28 pm

When do we begin the book burning, Eric?

When do we begin to use the State to keep "negative people" at bay?

When do we make sure that those not in favor of your weird, fucked up brand of socialism that disempowers the people, are jailed?

When, Eric? Oh wait, that will never happen. Because the Green Party is a handful of jerk-offs sitting in a room running off at the mouth. You lost Jane Kim. You lost Ross Mirkarimi. You have no power, you have nothing!

Sucks to be you, big mouth! Oh but keep dreaming of the day you can be dictator of SF. Must be nice in mom's basement!

Posted by Guest on Apr. 12, 2011 @ 6:49 pm

Vote Debra Walker for Supervisor.

Posted by Librul on Apr. 05, 2011 @ 1:35 pm

Many supporters of the corporate tax break claim the stock option tax caused companies to leave San Francisco. The tax became official in 2004. Which companies left since then? If the tax means no comapnies would move here, then why did TechCrunch, which loudly screams for the tax break, moved here from Palo Alto in June?

Posted by Hope Johnson on Apr. 05, 2011 @ 2:12 pm

Your questions miss the point in my mind. Shouldn't we be asking for a more sensible tax policy? Rather than try to maintain what is a flawed policy?

Posted by Chris Pratt on Apr. 05, 2011 @ 2:26 pm

@Chris Pratt

That is exactly my point. Please provide evidence to support your claim the 2004 stock option tax is bad policy.

The payroll tax brings in revenue for the city. Evidence is obviously available through the city's revenue records.

The stock option tax has never been collected so how do you know it is bad policy? One point supporters of a tax break claim is that companies avoid San Francisco or move. Why then did TechCrunch, one of the supporters who claim companies don't like SF, move from Palo Alto to SF in June, knowing there is a payroll tax.

Posted by Hope Johnson on Apr. 05, 2011 @ 2:54 pm

Firstly its not a Stock Option tax, its a Pay roll tax. I would fully support a commercial rent tax. But the fact that as so many point out few business pay the pay roll tax is pretty good proof its flawed. Would you agree a tax that is not collected is pretty flawed?
So like I said, ask the right questions

Posted by Guest on Apr. 05, 2011 @ 3:03 pm

It is not the greatest tax and should probably be replaced, but how much do you want to bet that the people that just passed the payroll tax moratorium will push to entirely eliminate the payroll tax without anything to replace it?

And then imply that people who don't support it are racist?

Posted by Guest on Apr. 05, 2011 @ 3:15 pm

yep your probably right people find all sorts of ways to avoid taxes.

I am lost on the imply racism though.

Posted by Guest on Apr. 05, 2011 @ 3:25 pm

I'd suspect whatever new tax structure makes it onto the November ballot for voter approval will be structured so that if it doesn't pass the current payroll tax will remain in place.

That's one reason not to get too worked up about the Twitter-Shorenstein Tax Handout, which I thoroughly oppose as bad public policy in general and because there is virtually no housing vacancy and nowhere to put people getting these new jobs. But if we get a new tax system as of Jan 2013, or thereabouts, it's only 1 1/2 years this tax welfare handout will apply anyway.

And thanks to steven for posting the link to the Controller's June '10 tax report. That office, the Board President and other significant participants who worked on that report should be very proud of their work. It verifies some important points about the replacement of a payroll tax system to tax system based on gross receipts, including rent receipts. It helps when advocates can point to statements from credible reports like this to counter the usual knee-jerk criticisms of a gross receipts tax system.

My only fault with the report is that they did not examine the impact of a gross rents tax on *residential* rents. This too should be on the tax menu, imposed on any landlord making more than $50-100,000 or more of gross rental income a year. Similar to the tax on commercial rents, the tax can be phased in when a new lease is negotiated (in the case of commercial property) or when a new tenant moves into the unit (in the case of residential property), which minimizes any impact to a current lease agreement.

Posted by Robert on Apr. 05, 2011 @ 5:18 pm

would have to be passed thru to tenants, else it would represent a "taking".

The Rent Ordinance is full of loopholes whereby LL's can pass thru extra costs to TT's.

You want to raise rents?

Posted by TheDoc on Apr. 05, 2011 @ 6:24 pm

A tax on gross *residential* rents would have negligible inmpact on rents. Landlords don;t set rents based on costs, but on the amount of money tenants have to pay rent and the supply and demand of local housing units.

If landlords set rents on costs, the landlord with a low Prop 13 tax and no mortgage would change much less than the landlord with a high a Prop 13 tax and a monster mortgage to pay off. The rents are the same on equal location and amenity rental units.

If the current rent tax for a nice 2-bedroom/2-bath apartment near Telegraph Hill is $5,000 a month, and tomorrow the residential rents tax is set at 50%, the rent doesn't magically go up to $10,000 a month so the landlord can make the same $5,000 of rent income, after tax. If the landlord could charge $10,000 a month, she would, based on whatever the highest rent the local tenants can pay.

Landlords are the ultimate profit maximizers - they charge the highest rent possible regardless of cost.

In case anyone hasn't noticed, rents have doubled here in the past 10 years and probably tripled in the past 15-18 years. No one has made as much profit as landlords over the past 10 years. The boomers lost a chunk of their equity in the stock market and housing crash over the past few years, and the under-30 set will be paying off mountains of government debt over the next 40 years, so they're not getting ahead any time soon. But the landlords in the Big Blue Democrat towns like New York, LA, San Francisco and Chicago are making buck after buck after buck.

We pay close to 50% of our incomes in combined taxes, and 35%-45% of our incomes in rent or mortgage payments, yet we just sit here and bang away on our keyboards, whining away rather than organizing to retire any politician who has held office over the past 20 years. They've helped destroy our community and society and it will take years and years to repair.

High taxes and high housing costs for working people, and ultra-low taxes (tax subsidies even) for big landlords and mega-companies that ship jobs overseas. That's the way our politicians roll.

Posted by Robert on Apr. 05, 2011 @ 7:27 pm

Under rent control, such additional costs can and are passed thru to tenants. That provision is essential for rent control to not be categorized as a "taking".

So a GRT would increase rents.

Posted by TheDoc on Apr. 06, 2011 @ 2:08 pm

@guest

I am asking the right questions or you wouldn't try to change the subject instead of answering. Changing the subject is not evidence the stock option portion of the tax is why companies leave the city, which is what the city and the supervisors were discussing today. Still waiting on your evidence tax is flawed.

Also, your comment that most companies don't pay the payroll tax is misleading. Many companies pay the payroll tax. Only small companies don't, ones with a taxable payroll of $250,000 or under. This is to promote the ability for small businesses to compete in the city.

And, the vote today did not eliminate the payroll tax, only hold it at the level it would be the year a company moves in to the area.

Posted by Hope Johnson on Apr. 05, 2011 @ 3:35 pm

@Hope the question should be why far leftist radicals like Susan Leal, Fiona Ma and Jake McGoldrick sponsored the 2004 legislation to expand the reach of the payroll tax, and why such neocommunist extremists like Tony Hall, Bevan Dufty and Michela Alioto-Pier voted in favor of it and why that known anticorporate zealot and socialist, Gavin Newsom, signed it into law.

-marc

Posted by marcos on Apr. 05, 2011 @ 6:13 pm

banks, biotech, cleantech and a few others are exempt from the San Francisco payroll tax. Only 10% of businesses pay it.

Posted by Guest on Apr. 05, 2011 @ 8:09 pm

@Guest

The biotech and cleantech exemptions are examples of bad policy tax exemptions. Biotech was spearheaded by Alioto-Pier and it has only provided about 250 jobs over eight years. The controller estimates it has cost the general fund nearly $2M and admits that number s hard to calculate because no community benefits were secured in the agreement (like how much has it cost the average taxpayer for infrastructure).

Please provide evidence to support your claim only 10% of businesses pay the tax. Because nearly every downtown law firm pays it and there are plenty of them. Throw in Safeway, Zynga, McKesson, The Gap, Bechtel, Lucasfilm, Ghiradelli, Wired Magazine, Williams-Sonoma, maybe PG&E(?), or Diamond Foods (who just purchased Pringles) and that 10% gets harder to believe.

And, the general fund receives $350M from the tax. How do you propose to make up a loss like that?

Posted by Hope Johnson on Apr. 06, 2011 @ 12:09 pm

@Hope, we need for a full lifecycle analysis of the boosters' economic schemes like you're suggesting instead of relying on argument by "the waving of the hands."

-marc

Posted by marcos on Apr. 06, 2011 @ 12:43 pm

@Hope I'll try to answer your question but since my previous post seems to have been deleted (????) I don't know if I'll be participating on the message board much longer.

I'll quote your question directly and then I will answer you more clearly instead of just posting a link.

You asked: "Many supporters of the corporate tax break claim the stock option tax caused companies to leave San Francisco. The tax became official in 2004. Which companies left since then?"

I will answer: I have not seen anyone say that corporations have left because of the stock options tax. Corporations have not left the city because they have simply not been paying it.

The reason they have not been paying it is because they have not had to report to the IRS when employees exercise options and the city has not had the information to pursue the tax.

Starting this year, the IRS requires corporations to send them information reports whenever the tax becomes applicable.

The link I posted was an explanation of that.

I will answer any question you have.

I used to post at Fog City Journal but was banned specifically because I was posting links that were maybe not that clear and were misinterpreted as being belligerent or something???

That is the flaw in deleting posts and banning posters. They may have been misunderstood??

If you need me to repost the link explaining the new IRS rule change I will be glad to do it.

The IRS rule change is the reason that corporations in SF will for the first time this year have to pay the tax on options. That is the entire issue here.

I can post whatever links or proofs you require. Or if you can get my posts deleted then I'll just move on....

Posted by Guest on Apr. 06, 2011 @ 2:15 pm

Oh wait my mistake. I just found my post with the link kind of way down the list now....ha ha. Sorrrrryy!

Posted by Guest on Apr. 06, 2011 @ 2:26 pm

Thanks for pointing out what should have been obvious after all these years. When anyone is looking for a particular outcome they just make up facts and data points to fit their agenda. "Oh, that sounds good. People might buy that"

I read the Tech Crunch article. It was clear the author didn't know the difference between gross receipts and gross profits, but that didn't stop her from making all sorts of erroneous policy proscriptions and analyses. It was a blatent PR puff piece for their high-tech advertisers and readership, those elite few who feel they are way too cool and privileged to pay a measly 1.5% on their million dollar stock option payoffs.

The politicians and business elites know what's up. There is a serious housing / jobs imbalance in San Francisco and Bay Area.

But none of these multi-Billion dollar companies - Google, Apple, Yahoo, HP, Cisco, Intel, Oracle, HP, Facebook and others - build any housing for their thousands of new employees. Instead their $150,000 a year employees - many of them the best and brightest right out of college or grad school - outbid the rest of us schmoes for housing. Some of their employees even evict current tenants by helping convert rental buildings to TICs. These companies and their employees are toxic to the local economy.

Instead of providing ANY subsidies to billion dollar businesses and billion dollar landlords, we should be telling companies to ship about 1-2 million jobs outside California to help begin to improve the housing / jobs / transportation balance in the Bay Area and California in general.

Posted by Robert on Apr. 05, 2011 @ 4:27 pm

If only 90% of business would leave the state, housing would be so cheap for me!

Posted by Guest on Apr. 05, 2011 @ 5:39 pm

The answer to this problem, lets build more housing.

Posted by garrett on Apr. 06, 2011 @ 1:54 pm

Hope if you really want to know the answer (which I am beginning to doubt) you seriously need to read this ...

http://www.startuplawblog.com/2009/11/21/employers-must-begin-reporting-...

"Employers Must Begin Reporting ISO Option Exercises To IRS

... Following the close of 2010, employers will need to both provide affected employees with an informational disclosure statement and also file an associated return with the IRS."

Posted by Guest on Apr. 06, 2011 @ 10:18 am

parcel tax on vacant buildings only?

Aren't those EXACTLY the buildings receiving no rents and therefore in the least position to actually pay more tax?

Or is it a no-payroll tax?

Posted by TheDoc on Apr. 05, 2011 @ 2:38 pm

Egan's argument was that a parcel tax on vacant properties would be an incentive for the building owners to lower the rent enough to attract a tenant. It would bring a little stick to our carrot-only approach to commercial property owners, who often would rather sit on a vacant property for years than help bring down rents in an area to the point where small businesses and nonprofits might be able to actually afford them.

Posted by steven on Apr. 05, 2011 @ 3:17 pm

Have gotta agree with this...

Posted by Guest on Apr. 06, 2011 @ 12:58 pm

It's legitimate to question whether, and to what extent, a tax break to private companies will benefit, on the whole, a distressed neighborhood.

Answering this question should be a matter of simple arithmetic. You add up the lost revenue, compare it to anticipated benefits, and see which sum is larger.

But simple arithmetic is not the issue here. Chris Daly and his disgruntled supporters are swinging political axes.

They never forgave Jane Kim for winning in district six, after their own favorites lost.

Not that Jane Kim is any hero. To the contrary, she's just a typical politician.

But Daly and Co would have more credibility today if they had not allowed the mid-Market area to continue to rot while Daly was in power, under the guise of stopping "gentrification."

So today they find themselves in a rear-guard, reactive posture.

This is yet another example of how the city has outgrown its progressive sect.

Other examples:

They have no credible candidates for mayor.

They have no women in leadership positions.

They have turned against the best mind in their own camp, Jeff Adachi.

They are beholden to dogma rather than reality.

They are in complete denial about the above failures and launch personal attacks on anyone who dares to mention them.

They are like the church's astronomers in the 17th century who refused to look through Galileo's new telescope and scoffed reactively at independent thinking.

Posted by Arthur Evans on Apr. 05, 2011 @ 2:39 pm