taxes

NOISE: Bingo! And bangin’, bizzy Deerhoof

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Taxes, zits, and coffee breath – these things are eternal. Add to that list “Rock ‘n’ Roll Bingo” at Blankspace in Oakland on Sept. 1. This third installment of the Oakland Art Murmur event featured the Bay’s winning bro-duo Moore Brothers and Santa Cruz chamber-goofers Antarctica Takes It (Bookends canceled, shoot). Most amazing – this writer took home an awesome prize (a fine alternative to the unicorn thrift scores): a tote bag design original by artist Tonya Solley Thornton. Bingo, indeed.

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Game? All photos by Kimberly Chun

A few days later on Sept. 5, we stopped by Great American Music Hall to catch Marc Ribot’s Ceramic Dog (with longtime local Ches Smith on drums) and our pals Deerhoof.

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Onetime guitarist-bassist Chris Cohen will be missed, but man, has John Dieterich stepped up, big time. The ‘Hoofies are approaching their songs from new, streamlined angles. Awesome, as usual. Before the show, drummer Greg Saunier had tales to tell from the road and Radiohead (Jonny Greenwood did their lights on their last show together in Europe, Saunier said).

Deerhoof was off to LA right after the show, he added, to finish mixing their forthcoming new album, Friend Opportunity, which the band worked on while out with Radiohead (it’s scheduled to come out Jan. 23, 2007). Next it was off to tour the East Coast with Flaming Lips.

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When will we see Greg, Satomi, and John again? Not soon – the trio was also in LA recording and co-composing a score for Justin Theroux’s new film, Dedication, starring Billy Crudup, Mandy Moore, Tom Wilkinson, and Amy Sedaris. And a Milk Man ballet, inspired by the Deerhoof album, is in the works in October at the North Haven Community School in North Haven, Maine. Their likes won’t be seen again till Nov. 11 at RIOTT! at Bill Graham Civic. So count yourself lucky, Deerhoofies, that you saw ’em before they scampered off into the wilds again.

Cutting taxes the right way

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EDITORIAL Finally the Democratic Party in California is starting to talk seriously about tax policy. It’s an important change in the political winds, and if state treasurer Phil Angelides can get beyond the tepid-to-hostile press and use his promise of a middle-class tax cut to gain ground on Gov. Arnold Schwarzenegger, it may signal the end of decades of regressive and deeply harmful economic policy.
Schwarzenegger, who knows he’s in a tough race, has been trying to smear Angelides by saying that the Democratic candidate is pushing for tax hikes. Yes, he is — tax hikes on the likes of Arnold Schwarzenegger (and Phil Angelides), people with incomes of more than $500,000 a year. For the record, these are people who have seen their taxes drop dramatically under the Bush administration and are the direct beneficiaries of an alarming national trend of wealth concentration among the richest Americans.
Angelides isn’t talking about radical tax hikes; all he wants to do is restore the top state income tax rate to the level it was under Republican governors like Ronald Reagan and Pete Wilson. Still, raising taxes never plays well in the polls, so Angelides is now doing what he needed to do from the start of his campaign: he’s proposing to cut taxes on middle-class working families.
It’s a risky strategy: pundits on the right will accuse him of “class warfare,” and the details of his plans will get obscured by negative political ads and lousy media coverage. But it’s the right approach: he’s actually talking about shifting the tax burden upward, about changing the national trend in tax policy, about giving the majority of the voters tax breaks and paying for it by making a few wealthy people pay more.
But if it’s going to work, he needs to be a lot clearer on exactly how the dollars pencil out — and he needs to offer more than what seems like a relatively modest tax cut. Right now, his plan calls for $788 million in tax reductions for families earning less than $100,000 a year and $5 billion in tax hikes for the wealthy. He’s also offering to find $1 billion in state waste.
For a family living on $46,000 a year, the program would amount to $660 a year in tax relief.
We understand that the tax cuts have to be lower than the tax hikes — the state is deeply in debt, and there are all sorts of badly needed social programs that ought to be funded. But in the end, his plan sounds pretty mild: there’s a lot more than $1 billion in waste, corporate tax loopholes, and uncollected revenue out there, and a California family earning $46,000 a year, facing the insane housing market and rapidly rising energy costs, could use a lot more than $50 a month in extra cash.
Let’s remember: the transfer of wealth from the middle class to the rich (and especially the very rich) that’s taken place in the past two decades is unprecedented in the postwar era and quite possibly unprecedented in American history. A few bucks here and there aren’t really going to make that much difference. If Angelides is serious, he should revise his plan to at least double the tax cuts for the middle class, hike the tax credits for low-income families — and pay for it by creating another tax bracket altogether, for Californians who earn more than $1 million a year.
But this is an excellent start — and Angelides deserves tremendous credit for opening a discussion that should have taken place years ago. SFBG

It’s criminal what Congress has done to the working poor

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OPINION Congress’s Republican leaders belong in prison. They have openly violated one of our most basic laws, the 68-year-old Fair Labor Standards Act. It requires Congress to set the minimum wage high enough to guarantee a standard of living necessary for health, efficiency, and general well-being.
The current rate of $5.15 an hour comes nowhere near to doing that. Even those who manage to work full-time make only $10,700 a year – $206 a week or about $900 a month, minus taxes and other deductions. They and the 15 million other Americans who are paid at or near the minimum – more than one-third of them provide the main or sole support for their families – are by any reckoning poverty-stricken and barely surviving.
The law allows states and local governments to adopt minimum-wage rates higher than the federal rate. Although California and 20 other states, San Francisco and 139 other cities and counties, and the District of Columbia have done so, the higher minimums cover only about half of the country’s workers.
Democrats have argued long and hard in the current session of Congress for a higher federal minimum, as they have in every other session since the $5.15 rate was set in 1997. But the Republicans who’ve been running Congress have higher priorities – raising their own pay and cutting the taxes that are such a burden to their wealthy supporters.
Oh yes, the GOP leaders did introduce a bill that would have raised the minimum. But the measure made that contingent on cutting the estate taxes of the very wealthy – a linkage, opposed by even some Republicans, that guaranteed the bill’s defeat.
They’ve raised congressional pay in every session since 1997, while doing nothing for the working poor. That’s added more than $31,000 to the minimum wage of congressional members, currently $165,200, with a $3,300 raise scheduled for Jan. 1. Unlike minimum-wage workers, who rarely have fringe benefits, members of Congress also get free health care, pensions, and other expensive extras.
The minimum wage for ordinary people would have risen to $7.25 an hour over the next two years under the latest Democratic proposal blocked by the GOP’s congressional leaders. Its main proponent, Sen. Edward Kennedy of Massachusetts, promised that the fight to raise the wage “will continue all across America.”
It is certain, in any case, that Democratic candidates will make it an issue in this fall’s election campaigns. They are well aware, certainly, of polls showing that an overwhelming majority of Americans favor a minimum-wage increase.
So why in the world are Republican leaders so adamantly against it?
Because their big-money backers in the restaurant business, who employ about 60 percent of all minimum-wage workers, are against it, as are many other business and corporate interests. The opponents have even formed a group, Coalition for Job Opportunities, to spread the fiction, much favored by the GOP, that a higher minimum would force employers to eliminate jobs.
Actually, the number of jobs has grown after each of the 19 times the minimum has been raised since it was initially set at 25 cents an hour in 1938.
The job growth has been spurred primarily by the increased spending of those whose pay has increased. Like all low-wage workers, they must spend virtually every cent they earn, thus raising the overall demand for goods and services and creating the need for new employees.
Think of the general benefits to society if the minimum-wage workers who now must depend on government assistance could earn enough to make it on their own.
Think of the benefits to employers. As several studies have shown, raising workers’ pay raises workers’ morale and, with it, their productivity, while decreasing absenteeism and recruiting and training costs.
Think of the benefits to small retailers. Opponents of a raise say they’d be hurt the most by a higher minimum wage, but it’s far more likely that they’d be among the greatest beneficiaries. For minimum-wage workers have no choice but to spend most of their meager earnings in neighborhood stores for food and other necessities. SFBG
Dick Meister
Dick Meister is a San Francisco-based writer who has covered labor and political issues for four decades as a reporter, editor, and commentator. Contact him through his Web site, www.dickmeister.com.

Shackling the tax man

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› gwschulz@sfbg.com
Late last month, David Cay Johnston of the New York Times managed to get a story about IRS layoffs picked up by the San Francisco Chronicle and placed on page three. That’s no small challenge, even in one of the most politically charged cities in the nation. It was not a sexy story, neither to liberals nor to conservatives.
But the story’s timing was impeccable.
Johnston reported that the IRS was poised to lay off 157 of its 345 estate- and gift-tax attorneys working at agency offices throughout the country — a division of investigators that generates more revenue for the federal treasury by catching tax cheats than any other group of auditors, about $2,200 for every hour that they work.
Dismantling the estate tax has been among the most aggressive crusades taken up by the Republican Party and its friendliest contributors for at least the last decade. Leaked to the Times by IRS whistle-blowers, the story about the layoffs surfaced just days before Congress rejected for the fifth time since 2001 an attempt by fiscal conservatives to get rid of the estate tax. The legislation failed despite Republican control of both the House and Senate. Even tempting Democrats with the first federal minimum-wage hike in 10 years couldn’t do the trick.
So how could defending the estate tax and the right of the IRS to collect it survive two branches of the federal government dominated by a political party that holds most taxation in contempt? It’s because families awash in seemingly infinite wealth are the only ones who get hit by the tax — despite false claims made by the GOP that the estate tax kills small businesses.
California filed more estate-tax returns in 2001 than any other state in the country by a margin of thousands. The only state that came close was Florida, and California still filed around 6,000 more returns, according to the most recent IRS numbers.
In other words, the Golden State is filthy, stinking rich and more vulnerable to the estate tax than other states. GOP party leaders in Washington insist the issue will return in the form of a new bill, and the IRS is behaving as if the estate tax has already disappeared. If it does, the richest families in the United States — highly concentrated in California and the Bay Area — stand to collectively save billions of dollars.
The Bay Area contains within its sloping hills and mammoth upstart tech firms higher income levels and more general wealth than almost anywhere else in the country. In fact, the San Francisco metropolitan area is the fourth wealthiest in the nation, according to Merrill Lynch, and two tiny cities between here and Mountain View, where Google is based, have the highest per capita median income in the United States. Those two cities, Atherton and Hillsborough, have a combined population of about 17,000, and while many of these techie tycoons are young, the day will come when they die and pass millions of dollars on to their descendants. Will there be enough tax investigators available to audit those estates? Will there even be an estate tax?
Following Johnston’s revelations, a Times editorial suggested the layoffs were a politically motivated attempt by the Bush White House to circumvent the legislative process. What it can’t accomplish through Congress it can do by handcuffing the tax police.
“This is an election year issue,” said Jay Adkisson, a private sector tax lawyer from Laguna Niguel who documents egregious cases of fraud on his Web site, Quatloos! “They’re trying to appease Republican voters who were angry over the failure of Congress to do something about the estate tax.”
The story of the IRS layoffs didn’t just catch the attention of readers. Congress responded too. Twenty-three lawmakers — including, somewhat predictably, Democrat Tom Lantos of California’s 12th District — immediately fired off a letter to Bush-appointed IRS commissioner Mark Everson demanding to know if the agency could now effectively investigate estate-tax avoiders.
None but the most obscenely wealthy Americans pay even a dime in taxes when they earn an inheritance upon a death in the family. Estates aren’t hit with taxes until they reach a value of $2 million, or $4 million for a married couple. Only estates exceeding those amounts are assessed any tax, according to the Center on Budget and Policy Priorities (CBPP).
And if the family hires a savvy tax attorney or estate planner, those nontaxable values could easily rise to $10 million, according to Adkisson.
A research director at the Brookings Institution named Diane Lim Rogers opined in the Chronicle last May that because of current exemptions, about one half of one percent of dead people will actually be followed to the grave by the tax man. Besides, it’s the beneficiaries of an inheritance who pay. Despite grand claims made by Republicans that the beneficiaries of an estate will be paying half of what they’re handed in taxes, even the estates eligible for taxation see on average a 20 percent rate, according to the CBPP, which relied on the IRS for its statistics. For those who do pay estate taxes, deep discounts are available through charitable donations.
“The argument made about lots of people being ‘burdened’ by estate taxes is that they go through lots of convoluted tax-planning strategies in order to avoid the estate tax, so even if they don’t end up paying any estate tax, they are still adversely affected [burdened] by the existence of the tax,” Rogers wrote in an e-mail to the Guardian.
But even considering the cost of estate planning, Rogers said, no one would rationally spend more avoiding taxes than they would actually paying them.
Keith Schiller, a respected private sector tax attorney based in Orinda, earns princely sums teaching millionaires how to take advantage of loopholes in the federal tax code. He’s not opposed to the estate tax on principle; he just wants to simplify the way his clients pay their dues.
“I do believe the estate tax serves a social function of breaking down generational dynastic wealth,” he said in a phone interview.
Schiller said the IRS is conducting nowhere near the estate-tax audits it once did and that may be the only justification for laying off auditors. Still, the knowledge required by agency investigators to analyze and understand complex estate-tax avoidance schemes is immense. About 50 estate- and gift-tax attorneys based in Southern California and the Bay Area exclusively handle returns filed for the IRS from inside the state.
David Dean, president of the San Jose–based National Treasury Employees Union (NTEU) Local 238, said it’s not clear which offices will have layoffs. All 350 estate-tax auditors are being offered buyout deals that include their pensions plus up to $25,000, or $13,000 after taxes.
Dean and the NTEU, which represents the auditors and opposes the layoffs, insist the IRS isn’t entirely sure how much money is hidden from the agency each year through either elaborate trusts or simple refusals to file. It’s known as the “tax gap,” and three days after Johnston’s story appeared, the inspector general of the IRS, J. Russell George, told Congress that the agency’s estimated figures for delinquent estate taxes hadn’t been updated in years. His report described a self-fulfilling prophecy in which the IRS expressed no desire to update the figures because “consideration is being given to eliminating or reducing the number of people required to pay estate taxes.” The last estimate was about $8 billion, but that figure is for the most part unreliable, he testified.
But the law still exists, regardless of whether an anti–estate tax agenda eventually succeeds in Congress.
“If a law is on the books, you still have to close down on the cheaters,” said JJ MacNab, an estate planner who spent 18 years in the Bay Area working for tech clients. “If you don’t enforce a law on the books, no one’s going to have faith in the system.”
MacNab now lives in Washington and as a hobby assists people who buy into tax-avoidance schemes that turn out to be illegal. She said these days, it’s low-income earners who are likelier to be audited, a conclusion Johnston also came to in his 2003 best-seller, Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich — and Cheat Everybody Else. The book shows how the recent layoffs are a small part of a larger movement to weaken the IRS’s investigative capabilities.
And that movement begins with those who can afford to fund it. Who are they? Well, they’re not your average farmer.
Consistently during the debate over estate taxes, the GOP has co-opted the populist language that once dominated America’s agrarian communities by claiming that the “death tax” bleeds poor farming families dry. It’s a spectacular rhetorical tool, but it’s an ugly distortion.
In fact, it’s the nation’s wealthiest families who have led the charge to dismantle the estate tax, not its small farmers, according to an April report put together by two groups, Public Citizen and United for a Fair Economy. The analysis identified a handful of enormously wealthy families that stand to save more than $70 billion if their lobbying efforts succeed. And that lobbying effort, the report notes, has amounted to around $490 million in direct and indirect lobbying expenditures since 1998.
The list includes Ernest Gallo of the E & J Gallo Winery, based in Modesto, and John A. Sobrato of Sobrato Development, listed by Forbes as one of the largest commercial landlords in Silicon Valley, with a familial net worth of approximately $2 billion. The Gallo family is reportedly worth about $1 billion.
The rest of the list is in part a who’s who of America’s billionaires: Wal-Mart’s Walton family; Charles and David Koch of the nation’s largest privately held company, the Kansas-based Koch Industries (also benefactors of libertarian think tank the Cato Institute, founded in San Francisco); and the Dorrance family of the Campbell Soup Co.
Ernest Gallo’s participation in antitax measures is particularly well documented. Elected officials he has supported with contributions in the past sponsored federal legislation in the ’70s and ’80s that allowed for millions of dollars in estate-tax exemptions for the Gallo family. One bill was even dubbed by estate-tax supporters the “Gallo amendment.”
The Public Citizen report links the Gallos to anti–estate tax lobbyist Patricia Soldano and her Orange County–based Policy and Taxation Group (PTG), which has spent $4 million lobbying solely against the estate tax since 1998. While the authors are unable to pinpoint exactly how much the Gallos had given to PTG directly, both the Sobratos and the Gallos are listed as clients of the group. The Gallos have reportedly spent hundreds of thousands of their own dollars supporting individual candidates.
It’s doubtful that very many people who actually paid estate taxes last year would know how to repair a grain harvester. In 2001, Johnston of the Times famously challenged the anti–estate tax American Farm Bureau Federation and the Bush administration to find just one example of a farm estate being sold to pay the taxes on it. Johnston reported they were unable to do so.
Estate planner Schiller likened opponents of the estate tax to medieval villagers who complained of gout to prove how well nourished they were.
“People want to believe they have an estate-tax problem,” he said, “so they can feel successful.” SFBG

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› tredmond@sfbg.com
Wow: A little more drunkenness and a bit of public nudity, and San Francisco could have had a real world-class soccer party Sunday. As it was, things were pretty darn festive: I was too busy chasing the kids around and watching the game to get a good count, but I bet there were 15,000 people at Dolores Park, more than I’ve seen in one place in the Mission for anything short of a big antiwar rally. The sun was shining, the mood was upbeat, people waved French and Italian flags around and cheered when either side scored a goal… what a great event.
And it only happened because a German-born former teacher named Jens-Peter Jungclaussen, who is traveling around in a bus trying to bring the world to local kids, decided to get the permits, line up a big-screen TV and a huge forklift, and pull it off.
And as I stood there and marveled at how one motivated person could create a massive civic event, I had to wonder: Why can’t the Recreation and Park Department do stuff like this?
How hard would it have been for the city to rent the TV screen (or better, three or four screens; there were so many people the ones in the back could barely see), put out the word (Jungclaussen did, as far as I can tell, no advertising — the whole thing was by e-mail and word of mouth), and maybe even do this in half a dozen places around town?
It’s funny, when you think of it: So much of the fun stuff that happens in San Francisco is done by private groups. The street fairs, the festivals, the concerts… the city does almost none of this. Even the Fourth of July fireworks are run by the San Francisco Chronicle.
Rec-Park spends a lot of time pissing people off, making dumb rules about permits that make even the private events harder to finance. It’s a nest of bureaucrats without any vision.
This ought to be a wake-up call: There are all sorts of things that can bring people together. There are all sorts of ways to spend the public’s money helping the public have fun (and along the way, reminding people why we pay taxes).
You want to cough up extra money every year to pay someone to tell you that you can’t drink beer in North Beach? I don’t either — but a few events like Sunday’s impromptu festival in Dolores Park, and one of the most loathed agencies at City Hall could become one of the most loved.
Think about it, folks.
Now this: I think just about every Guardian reader in the world has noticed that we’ve had some serious Web problems in the past few weeks. We got hit with something — maybe an attack, we’re still not sure — on Election Day, and whatever it was pretty much fried sfbg.com, and we’ve been limping along ever since.
But we’re back now and way better with a bunch of big changes that we’d been planning anyway. Sfbg.com now has a new design, a (much, much) faster user interface — and several new blogs that will be updated daily and full of everything you need to know about politics, arts, culture, and the unconventional wisdom of San Francisco.
It’s still a work in progress, but it’s going to be a lot easier to tell us what you think. SFBG

Ammiano’s health care plan is fair

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OPINION Universal health care. These days, most people want it, but no one wants to pay for it.
But like it or not, we all share in the expense of providing health care. We pay for it directly in our health care premiums or indirectly from higher costs for goods, services, and taxes. According to the activist group Health Care for All, “We spend over $6,000 per person in the US — two to three times the amount spent in other countries that insure everyone and have better health outcomes.” Our health care system, if you can call it that, is currently based on a corporate, for-profit model that increasingly leaves large numbers of people uninsured — and they must rely on taxpayer-subsidized public health programs.
Mayor Gavin Newsom is pushing for universal health care in San Francisco, and there are three ways on the table to fund it.
The Committee on Jobs, Chamber of Commerce, and Golden Gate Restaurant Association champion a plan in which all businesses pay a set fee, whether or not they are providing health care for their employees. Under this plan, large businesses that are not providing health care for their employees will save big money. Small businesses — and every business already doing the right thing — would subsidize the minority of large businesses that don’t provide health care.
In fact, 63 percent of the projected $50 million in revenue raised by this plan would come from businesses with fewer than 20 employees. A full 80 percent would be paid by employers with fewer than 50 employees.
The local papers say Newsom supports a voluntary plan. I assume that means employers can choose whether to pay. I’m surprised anyone would propose this with a straight face. Most employers do provide health care. This legislation is about those that don’t. They haven’t volunteered to pay for their own employees’ health care; why would they pay for a city plan?
Then there’s Sup. Tom Ammiano’s proposal.
Ammiano’s plan includes a minimum spending requirement for health care services for all employers with 20 or more employees. Small businesses with less than 20 employees (the vast majority of registered businesses in San Francisco) don’t have to pay anything. Of the three proposals, Ammiano’s seems the fairest to the majority of employers that already provide health care.
The Committee on Jobs tells us that small businesses will be hurt by this plan. I’m always suspicious when a well-funded organization that exists to lobby for the interests of the largest corporations in San Francisco leads with an argument related to the impact to the small business community.
The SFSOS thinks that any decision on Ammiano’s health care plan will be made “predominantly by people who have never worked in retail business, never managed a staff, nor ever had to make a payroll.”
I operated a temporary employment business in San Francisco for 25 years. Ammiano’s plan levels the playing field for all businesses.
For the record, many of my former colleagues within the small business community provide very generous health care benefits. Employees in small businesses, after all, are like family. Many small business owners think that those who do not provide health care have an unfair competitive advantage.
If we’re going to have universal health care, everyone should pay. SFBG
Barry Hermanson
Barry Hermanson is running for state assembly in District 12 on the Green Party ticket.

The best health care plan

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EDITORIAL The health care model that’s been established, largely by default, in the United States is an utter mess. Most working people get their insurance through their employers. That means people who have jobs that don’t provide insurance are out of luck, and people who don’t have jobs are out of luck, and the self-employed are stuck with crazy bills, and small businesses are getting hit harder and harder with rising insurance rates that they can’t afford.
It’s a ridiculous way to handle health care: In most other western democracies, everyone is part of a national health care program, and under the best systems, the government is the single insurer and pays all the bills.
Among other things, that prevents the sort of crisis that San Francisco faces today, where the large numbers of uninsured residents have no choice but to seek care at the overburdened San Francisco General Hospital. That leaves the taxpayers on the hook for more than $100 million a year.
For businesses, particularly small businesses, that scrape and suffer to provide health insurance for their workers, the system is fundamentally unfair: Those companies pay twice, first for their own employees, and then again in higher taxes to cover the costs of the uninsured. Businesses that can well afford health insurance (the Wal-Marts of the world) but don’t pay are forcing others to cover their costs.
In a perfect world, with national health insurance, this wouldn’t be an issue. But it’s almost impossible for a single city to implement a single-payer system — which is why Mayor Gavin Newsom is struggling to present a functional health plan, and why Sup. Tom Ammiano’s employer mandate plan is absolutely necessary.
But the small business advocates who complain about the burden of paying more than $100 a month for each uninsured employee have a point, too — and this entire plan ought to be linked (at least in the long run) to Sup. Aaron Peskin’s proposals to change the city’s business tax.
Newsom’s dramatic announcement last week of a complex plan to cover all residents won overwhelmingly favorable press coverage. But so far, the plan itself is little more than a glorified press release. There are a lot of devilish details, particularly when it comes to funding.
There’s no new money in the mayor’s plan. He argues, correctly, that San Francisco currently spends $104 million on health care for the city’s 82,000 uninsured, and shifting that money into a city-run health care program will underwrite a significant amount of the cost. But that money can’t just be moved like a chess piece — it’s part of the San Francisco Department of Public Health budget, and if everyone does not sign up for the new program and very sick patients (including, say, undocumented workers who don’t understand or fear enrolling in the city plan) keep showing up at General, there won’t be enough money to go around.
There’s also the very real prospect that some unscrupulous employers will simply quit paying health insurance premiums and dump their employees into the city plan. That would overwhelm the program and push it quickly toward financial ruin.
So the mayor’s plan has no chance at success unless Ammiano’s employer mandate passes, too. The Ammiano plan would offer additional funding for the program by requiring that employers either provide private health insurance or pay into a city pool — and would prevent businesses from tossing their health expenses into the city’s lap.
Ammiano’s plan isn’t perfect — no employer-based plan ever will be. The health insurance requirement would hit all businesses with more than 20 employees, and that might be a bit low. The plan already has some progressive gradations (companies with more than 100 employees would pay a higher fee), but linking the costs more directly to the size of the business (in other words, hitting the large outfits — which can well afford health insurance — a bit harder and giving more of a city subsidy to the smallest companies) could help ease the burden on struggling merchants.
But in the end, his plan — which would have no impact on employers who already offer health insurance to their workers — is crucial to any effort to get the uninsured into a decent health program (and to end the stiff taxpayer subsidy for companies that don’t provide insurance). The supervisors should approve it.
Still that’s not the end of the story. At the same time that Ammiano’s addressing health care, Peskin has floated a proposal for a new gross receipts tax on local business. Here’s the way to proceed: The supervisors need to fund a complete study of how much gross revenue local firms take in; write a new tax that allows the city to eliminate the payroll tax; add a progressive gross receipts tax; and use the next tax policy to help deal with the costs of health care. Big, rich companies pay a lot (enough to help subsidize the citywide health plan). Small firms pay less (and the reduced tax burden helps offset the costs of paying for health insurance). In the end, San Francisco would be the first US city to launch a progressive system for providing health insurance to all. SFBG

Don’t fear the t-word

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EDITORIAL The attack ads started almost the moment Phil Angelides won the Democratic nomination for governor, and they’ll continue until November, funded by Gov. Arnold Schwarzenegger’s seemingly bottomless war chest and carrying a misleading message that has become the vicious refrain of right-wingers everywhere:
The Democrat wants to raise your taxes.
Let’s get this straight, just for the permanent record: Angelides is not proposing to raise taxes on anyone who makes less than $500,000 a year. That’s means the vast majority of all Californians will not face a tax hike under the economic proposals the Democratic candidate for governor has set forth. Angelides wants to do something that Democrats (and Republicans) considered perfectly reasonable public policy for more than half a century, until the wing nuts got ahold of American economic policy: He wants to make the very wealthy pay a reasonable share of the costs of society.
The philosophy here is simple: Millionaires have reaped the benefits of this society — far more so in most cases than those who are struggling at the margins. They can afford to pay a higher marginal tax rate. They’ve won huge tax cuts on the federal level and pay far less in taxes than their peers in almost every other industrialized society. Asking the top tier of the taxpayers to cough up a little more money (nowhere near as much as they did in the 1960s and 1970s, but a little bit more) to get the state’s revenue in line with its spending is hardly a radical idea.
Californians want extensive public services. Schwarzenegger’s approach to providing them is to borrow more money. That’s never a terribly good idea, and given the state of the state’s pocketbook, it’s a particularly bad idea right now.
So Angelides is actually talking fiscal sanity — but a lot of people aren’t going to get the message. The “no new taxes” mantra is so powerful that it could well be the biggest factor in the fall election — and could mean defeat for Angelides unless he moves now, aggressively, to counter it.
His campaign, which in the primary was bold on policy but thin on promoting it, ought to turn the governor’s attacks upside down. Imagine a series of ads that went like this:
Phil Angelides wants to raise taxes — on Arnold Schwarzenegger. Or: Phil Angelides wants to raise taxes — his own. Or: Phil Angelides wants to raise taxes — but not yours.
Democrats who are willing to talk seriously about economic inequality in our society get accused of waging “class warfare.” Angelides, who made a personal fortune as a real estate developer, is in an excellent position to make a national statement about how wrongheaded and dangerous that sort of attack can be. And he’s in an excellent position to start a national conversation that’s long overdue — and start it in a state that brought America the awful “tax revolt” of the 1970s.
Memo to Mr. Angelides: Don’t fear the t-word. Use it right, and it will put you in the governor’s office. SFBG

Wow! Unity!

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By Tim Redmond

Amazing, but not unexpected: Steve Westly joined with Phil Angelides today in L.A. to announce a unified campaign for the fall. Westly, who had blasted Angelides for allegedly dumping waste into Lake Tahoe, called him ” a brilliant man” who is “comitted to environmental values.”
It was a good move for Westly to be gracious, but it’s a little late for that sort of thing: Schwarzenegger is already gathering up all the negative stuff Westly threw at Angelides, and we’ll see it all again in the fall.
The good news is that the voters will have already been exposed to this stuff once (and while it may have supressed turnout a bit, it clearly didn’t damage Angelides fatally). So when the Guv tries to bring it all up again — “Angelides wants to raise your taxes, Angelides got money from developers, Angelides is a dork,” whatever — the public will be sick of it.
Schwarzenegger is still very, very vulnerable, and will be counting on his big bond measure this fall to carry him. Already, he’s talking about how he wants to rebuild California for the future. The advantage Angelides has is that unlike Westly, he can point to some very clear and different policy positions. He’s not Arnold — and right now, that’s a big thing.

Newsom loses control

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› steve@sfbg.com

In the early days, the mayor tried to sound like a practical, hands-on executive who was ready to run San Francisco.

Mayor Gavin Newsom used his inaugural address on Jan. 8, 2004, to emphasize that he was a uniter, not a divider and that he wanted to get things done.

"I say it’s time to start working together to find common purpose and common ground," he proclaimed. "Because I want to make this administration about solutions."

It’s a mantra he’s returned to again and again in his rhetoric on a wide range of issues, claiming a "commonsense" approach while casting "ideology" as an evil to be overcome and as the main motive driving the left-leaning majority of the San Francisco Board of Supervisors.

"Because it’s easy to be against something," Newsom said on that sunny winter day. "It’s easy to blame. It’s easy to stop…. What’s hard is to hear that maybe to come together, we need to leave behind old ideas and long-held grudges. But that’s exactly what we need to do."

But if that’s the standard, Newsom has spent the past 17 months taking the easy way.

It’s been a marked change from his first-year lovefest, when he tried to legalize same-sex marriage, reach out to BayviewHunters Point residents, and force big hotels to end their lockout of workers.

A Guardian review of the most significant City Hall initiatives during 2005 and 2006 as well as interviews with more than a dozen policy experts and public interest advocates shows that Newsom has been an obstructionist who has proposed few "solutions" to the city’s problems, and followed through on even fewer.

The Board of Supervisors, in sharp contrast, has been taking the policy lead. The majority on the district-elected board in the past year has moved a generally progressive agenda designed to preserve rental units, prevent evictions, strengthen development standards, promote car-free spaces, increase affordable housing, maintain social services, and protect city workers.

Yet many of those efforts have been blocked or significantly weakened by Newsom and his closest allies on the board: Fiona Ma, Sean Elsbernd, Michela Alioto-Pier, and Bevan Dufty. And on efforts to get tough with big business or prevent Muni service cuts and fare hikes, Newsom was able to peel off enough moderate supervisors to stop the progressives led by Chris Daly, Tom Ammiano, and Ross Mirkarimi at the board level.

But one thing that Newsom has proved himself unable to do in the past year is prevent progressive leaders particularly Daly, against whom Newsom has a "long-held grudge" that has on a few recent occasions led to unsavory political tactics and alliances from setting the public agenda for the city.

Balance of power

The Mayor’s Office and the Board of Supervisors are the two poles of power at City Hall and generally the system gives a strong advantage to the mayor, who has far more resources at his disposal, a higher media profile, and the ability to act swiftly and decisively.

Yet over the past year, the three most progressive supervisors along with their liberal-to-moderate colleagues Gerardo Sandoval, Jake McGoldrick, Aaron Peskin, and Sophie Maxwell have initiated the most significant new city policies, dealing with housing, poverty, health care, alternative transportation, violence prevention, and campaign finance reform.

Most political observers and City Hall insiders mark the moment when the board majority took control of the city agenda as last summer, a point when Newsom’s honeymoon ended, progressives filled the leadership void on growth issues, problems like tenants evictions and the murder rate peaked, and Newsom was increasingly giving signs that he wasn’t focused on running the city.

"Gay marriage gave the mayor his edge and gave him cover for a long time," said Tommi Avicolli Mecca, a queer and tenants rights activist. "About a year ago that started to wear off, and his armor started to be shed."

Daly was the one supervisor who had been aggressively criticizing Newsom during that honeymoon period. To some, Daly seemed isolated and easy to dismiss at least until August 2005, when Daly negotiated a high-profile deal with the developers of the Rincon Hill towers that extracted more low-income housing and community-benefits money than the city had ever seen from a commercial project.

The Newsom administration watched the negotiations from the sidelines. The mayor signed off on the deal, but within a couple months turned into a critic and said he regretted supporting it. Even downtown stalwarts like the public policy think tank San Francisco Planning and Urban Research Association noted the shift in power.

"I think we saw a different cut on the issue than we’ve seen before," SPUR executive director Gabriel Metcalf told us. "Chris Daly is not a NIMBY. I see Chris Daly as one of the supervisors most able to deal with physical change, and he’s not afraid of urbanism…. And he’s been granted by the rest of the board a lot of leadership in the area of land use."

SPUR and Metcalf were critical of aspects of the Daly deal, such as where the money would go. But after the deal, Newsom and his minions, like press secretary Peter Ragone, had a harder time demonizing Daly and the board (although they never stopped trying).

Around that same time, hundreds of evictions were galvanizing the community of renters which makes up around two-thirds of city residents. Newsom tried to find some compromise on the issue, joining Peskin to convene a task force composed of tenants activists, developers, and real estate professionals, hoping that the group could find a way to prevent evictions while expanding home ownership opportunities.

"The mayor views the striking of balance between competing interests as an important approach to governing," Ragone told the Guardian after we explained the array of policy disputes this story would cover.

The task force predictably fell apart after six meetings. "The mayor was trying to find a comfortable way to get out of the issue," said Mecca, a member of the task force. But with some issues, there simply is no comfortable solution; someone’s going to be unhappy with the outcome. "When that failed," Mecca said, "there was nowhere for him to go anymore."

The San Francisco Tenants Union and its allies decided it was time to push legislation that would protect tenants, organizing an effective campaign that finally forced Newsom into a reactionary mode. The mayor wound up siding overtly with downtown interests for the first time in his mayoral tenure and in the process, he solidified the progressive board majority.

Housing quickly became the issue that defines differences between Newsom and the board.

Free-market policy

"The Newsom agenda has been one of gentrification," said San Francisco Tenants Union director Ted Gullicksen. The mayor and his board allies have actively opposed placing limitations on the high number of evictions (at least until the most recent condo conversion measure, which Dufty and Newsom supported, a victory tenants activists attribute to their organizing efforts), while at the same time encouraging development patterns that "bring in more high-end condominiums and saturate the market with that," Gullicksen explained.

He pointed out that those two approaches coalesce into a doubly damaging policy on the issue of converting apartments into condominiums, which usually displace low-income San Franciscans, turn an affordable rental unit into an expensive condominium, and fill the spot with a higher-income owner.

"So you really get a two-on-one transformation of the city," Gullicksen said.

Newsom’s allies don’t agree, noting that in a city where renters outnumber homeowners two to one, some loss of rental housing is acceptable. "Rather than achieve their stated goals of protecting tenants, the real result is a barrier to home ownership," Elsbernd told us, explaining his vote against all four recent tenant-protection measures.

On the development front, Gullicksen said Newsom has actively pushed policies to develop housing that’s unaffordable to most San Franciscans as he did with his failed Workforce Housing Initiative and some of his area plans while maintaining an overabundance of faith in free-market forces.

"He’s very much let the market have what the market wants, which is high-end luxury housing," Gullicksen said.

As a result, Mecca said, "I think we in the tenant movement have been effective at making TICs a class issue."

Affordable housing activists say there is a marked difference between Newsom and the board majority on housing.

"The Board of Supervisors is engaged in an active pursuit of land-use policy that attempts to preserve as much affordable housing, as much rental housing, as much neighborhood-serving businesses as possible," longtime housing activist Calvin Welch told us. "And the mayor is totally and completely lining up with downtown business interests."

Welch said Newsom has shown where he stands in the appointments he makes such as that of Republican planning commissioner Michael Antonini, and his nomination of Ted Dienstfrey to run Treasure Island, which the Rules Committee recently rejected and by the policies he supports.

Welch called Daly’s Rincon deal "precedent setting and significant." It was so significant that downtown noticed and started pushing back.

Backlash

Board power really coalesced last fall. In addition to the housing and tenant issues, Ammiano brought forward a plan that would force businesses to pay for health insurance plans for their employees. That galvanized downtown and forced Newsom to finally make good on his promise to offer his own plan to deal with the uninsured but the mayor offered only broad policy goals, and the plan itself is still being developed.

It was in this climate that many of Newsom’s big-business supporters, including Don Fisher the Republican founder of the Gap who regularly bankrolls conservative political causes in San Francisco demanded and received a meeting with Newsom. The December sit-down was attended by a who’s who of downtown developers and power brokers.

"That was a result of them losing their ass on Rincon Hill," Welch said of the meeting.

The upshot according to public records and Guardian interviews with attendees was that Newsom agreed to oppose an ordinance designed to limit how much parking could be built along with the 10,000 housing units slated for downtown. The mayor instead would support a developer-written alternative carried by Alioto-Pier.

The measure downtown opposed was originally sponsored by Daly before being taken over by Peskin. It had the strong support of Newsom’s own planning director, Dean Macris, and was approved by the Planning Commission on a 61 vote (only Newsom’s Republican appointee, Antonini, was opposed).

The process that led to the board’s 74 approval of the measure was politically crass and embarrassing for the Mayor’s Office (see “Joining the Battle,” 2/8/06), but he kept his promise and vetoed the measure. The votes of his four allies were enough to sustain the veto.

Newsom tried to save face in the ugly saga by pledging to support a nearly identical version of the measure, but with just a couple more giveaways to developers: allowing them to build more parking garages and permitting more driveways with their projects.

Political observers say the incident weakened Newsom instead of strengthening him.

"They can’t orchestrate a move. They are only acting by vetoes, and you can’t run the city by vetoes," Welch said. "He never puts anything on the line, and that’s why the board has become so emboldened."

Rippling out

The Newsom administration doesn’t seem to grasp how housing issues or symbolic issues like creating car-free spaces or being wary of land schemes like the BayviewHunters Point redevelopment plan shape perceptions of other issues. As Welch said, "All politics in San Francisco center around land use."

N’Tanya Lee, executive director of Coleman Advocates for Children and Youth, said the Newsom administration has done a very good job of maintaining budgetary support for programs dealing with children, youth, and their families. But advocates have relied on the leadership of progressive supervisors like Daly to push affordable housing initiatives like the $20 million budget supplemental the board initiated and approved in April.

"Our primary concern is that low- and moderate-income families are being pushed out of San Francisco," Lee told us. "We’re redefining what it means to be pro-kid and pro-family in San Francisco."

Indeed, that’s a very different approach from the so-called pro-family agenda being pushed by SFSOS and some of Newsom’s other conservative allies, who argue that keeping taxes low while keeping the streets and parks safe and clean is what families really want. But Lee worries more about ensuring that families have reasonably priced shelter.

So she and other affordable housing advocates will be watching closely this summer as the board and Newsom deal with Daly’s proposal to substantially increase the percentage of affordable housing developers must build under the city’s inclusionary-housing policy. Newsom’s downtown allies are expected to strongly oppose the plan.

Even on Newsom’s signature issue, the board has made inroads.

"In general, on the homeless issue, the supervisor who has shown the most strong and consistent leadership has been Chris Daly," said Coalition on Homelessness director Juan Prada.

Prada credits the mayor with focusing attention on the homeless issue, although he is critical of the ongoing harassment of the homeless by the Police Department and the so-called Homeward Bound program that gives homeless people one-way bus tickets out of town.

"This administration has a genuine interest in homeless issues, which the previous one didn’t have, but they’re banking too much on the Care Not Cash approach," Prada said.

Other Newsom initiatives to satisfy his downtown base of support have also fallen flat.

Robert Haaland of the city employee labor union SEIU Local 790 said Newsom has tried to reform the civil service system and privatize some city services, but has been stopped by labor and the board.

"They were trying to push a privatization agenda, and we pushed back," Haaland said, noting that Supervisor Ma’s alliance with Newsom on that issue was the reason SEIU 790 endorsed Janet Reilly over Ma in the District 12 Assembly race.

The turning point on the issue came last year, when the Newsom administration sought to privatize the security guards at the Asian Art Museum as a cost-saving measure. The effort was soundly defeated in the board’s Budget Committee.

"That was a key vote, and they lost, so I don’t think they’ll be coming back with that again," Haaland said, noting that labor has managed to win over Dufty, giving the board a veto-proof majority on privatization issues.

Who’s in charge?

Even many Newsom allies will privately grumble that Newsom isn’t engaged enough with the day-to-day politics of the city. Again and again, Newsom has seemed content to watch from the sidelines, as he did with Supervisor Mirkarimi’s proposal to create a public financing program for mayoral candidates.

"The board was out front on that, while the mayor stayed out of it until the very end," said Steven Hill, of the Center for Voting and Democracy, who was involved with the measure. And when the administration finally did weigh in, after the board had approved the plan on a veto-proof 92 vote, Newsom said the measure didn’t go far enough. He called for public financing for all citywide offices but never followed up with an actual proposal.

The same has been true on police reform and violence prevention measures. Newsom promised to create a task force to look into police misconduct, to hold a blue-ribbon summit on violence prevention, and to implement a community policing system with grassroots input and none of that has come to pass.

Then, when Daly took the lead in creating a community-based task force to develop violence prevention programs with an allocation of $10 million a year for three years Measure A on the June ballot Newsom and his board allies opposed the effort, arguing the money would be better spent on more cops (see “Ballot-Box Alliance,” page 19).

"He’s had bad counsel on this issue of violence all the way through," said Sharen Hewitt, who runs the Community Leadership Academy Emergency Response project. "He has not done damn near enough from his position, and neither has the board."

Hewitt worries that current city policies, particularly on housing, are leading to class polarization that could make the problems of violence worse. And while Newsom’s political allies tend to widen the class divide, she can’t bring herself to condemn the mayor: "I think he’s a nice guy and a lot smarter than people have given him credit for."

Tom Radulovich, who sits on the BART board and serves as executive director of Transportation for a Livable City (which is in the process of changing its name to Livable City), said Newsom generally hasn’t put much action behind his rhetorical support for the environment and transit-first policies.

"Everyone says they’re pro-environment," he said.

In particular, Radulovich was frustrated by Newsom’s vetoes of the downtown parking and Healthy Saturdays measures and two renter-protection measures. The four measures indicated very different agendas pursued by Newsom and the board majority.

In general, Radulovich often finds his smart-growth priorities opposed by Newsom’s allies. "The moneyed interests usually line up against livable city, good planning policies," he said. On the board, Radulovich said it’s no surprise that the three supervisors from the wealthiest parts of town Ma, Elsbernd, and Alioto-Pier generally vote against initiatives he supports.

"Dufty is the oddity because he represents a pretty progressive, urbane district," Radulovich said, "but he tends to vote like he’s from a more conservative district."

What’s next?

The recent lawsuit by the San Francisco Chamber of Commerce and the Committee of Jobs urging more aggressive use of a voter-approved requirement that board legislation undergo a detailed economic analysis shows that downtown is spoiling for a fight (see “Downtown’s ‘Hail Mary’ Lawsuit,” page 9). So politics in City Hall is likely to heat up.

"There is a real absence of vision and leadership in the city right now, particularly on the question of who will be able to afford to live in San Francisco 20 years from now," Mirkarimi said. "There is a disparity between Newsom hitting the right notes in what the press and public want to hear and between the policy considerations that will put those positions into effect."

But Newsom’s allies say they plan to stand firm against the ongoing effort by progressives to set the agenda.

"I think I am voting my constituency," Elsbernd said. "I’m voting District Seven and voicing a perspective of a large part of the city that the progressive majority doesn’t represent."

Newsom flack Ragone doesn’t accept most of the narratives that are laid out by activists, from last year’s flip in the balance of power to the influence of downtown and Newsom’s wealthy benefactors on his decision to veto four measures this year.

"Governing a city like San Francisco is complex. There are many areas of nuance in governing this city," Ragone said. "Everyone knows Gavin Newsom defies traditional labels. That’s not part of a broad political strategy, but just how he governs."

Yet the majority of the board seems unafraid to declare where they stand on the most divisive issues facing the city.

"The board has really, since the 2000 election has been pushing a progressive set of policies as it related to housing, just-taxation policies, and an array of social service provisions," Peskin said. "All come with some level of controversy, because none are free." SFBG

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› tredmond@sfbg.com

I was sitting peacefully at home, watching the final episode of The West Wing, which my partner describes as "liberal porn," when Steve Westly drew first blood in the governor’s race.

We all knew there’d be some negative ads before this was over, and frankly, all the hand-wringing about the evil of negative campaigning has never really appealed to me: Politicians have been launching vicious, often slanderous attacks on their opponents since the dawn of democracy. But this one made me furious.

The simple story is that Westly borrowing a chapter from the Book of Rove is assailing Phil Angelides for wanting to tax the rich. And he’s doing it in the most misleading, unprincipled, and utterly disgraceful way.

The ad features what seems like a crushing list of new taxes that Angelides wants to impose $10 billion worth, Westly’s hit squad claims. Then it winds up with a smarmy tagline: "With high gas prices, housing and health care costs, can working families afford Phil Angelides’s tax plan?"

Of course, Westly had pledged some time ago not to be the first candidate to attack the other by name, but what the hell: The election’s coming up, the race seems to be narrowing, and this guy will do whatever’s necessary to win.

But more than that, with this ad Westly is promoting the exact mentality that has damaged public education, health care, environmental protection, infrastructure needs, and so much else of what used to be the California dream. Republicans love to hit Democrats on taxes, and we’ll see plenty of that in the fall, no matter who’s the nominee. And for Westly to start the "no new taxes" cry just leaves the Democrats politically crippled.

For the record, Angelides is right: The state needs more tax revenue. And under his proposal, most of it would come not from "working families" who are worried about their gas bills but from people like, well, Steve Westly and Phil Angelides millionaires. His proposed income tax increase only affects households with more than $500,000 in income. Sorry: You’re in that range, you can afford it.

So Mr. Westly: Stop with the antitax lies. This shit makes me sick.

On to the good news.

I get the feeling, from over here in San Francisco, that there’s a real change afoot in East Bay politics. For the past few years, a not-so-loose cadre made up of state senator Don Perata, Mayor Jerry Brown, and Councilmember Ignacio De La Fuente has been consolidating power in Oakland, calling the political shots and giving developers a blank check. Two of the three have real, ahem, ethical issues, and one’s itching to leave town for Sacramento, but so far, nobody’s been able to truly challenge them.

Until Ron Dellums.

Now, I know that Dellums has been out of Oakland for years, that he’s a DC lobbyist, and I’ve heard the rap that he’s long on rhetoric and short on urban policy ideas. But we met him last week, and I can tell you that, at 71, he’s still one of the most energetic and inspirational speakers around, and if he’s elected mayor, he will, by force of personality and national stature, instantly become a center of power that’s distinct from (and will often be in opposition to) the Perata<\d>De La Fuente bloc. SFBG

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› tredmond@sfbg.com

I was sitting peacefully at home, watching the final episode of The West Wing, which my partner describes as "liberal porn," when Steve Westly drew first blood in the governor’s race.

We all knew there’d be some negative ads before this was over, and frankly, all the hand-wringing about the evil of negative campaigning has never really appealed to me: Politicians have been launching vicious, often slanderous attacks on their opponents since the dawn of democracy. But this one made me furious.

The simple story is that Westly borrowing a chapter from the Book of Rove is assailing Phil Angelides for wanting to tax the rich. And he’s doing it in the most misleading, unprincipled, and utterly disgraceful way.

The ad features what seems like a crushing list of new taxes that Angelides wants to impose $10 billion worth, Westly’s hit squad claims. Then it winds up with a smarmy tagline: "With high gas prices, housing and health care costs, can working families afford Phil Angelides’s tax plan?"

Of course, Westly had pledged some time ago not to be the first candidate to attack the other by name, but what the hell: The election’s coming up, the race seems to be narrowing, and this guy will do whatever’s necessary to win.

But more than that, with this ad Westly is promoting the exact mentality that has damaged public education, health care, environmental protection, infrastructure needs, and so much else of what used to be the California dream. Republicans love to hit Democrats on taxes, and we’ll see plenty of that in the fall, no matter who’s the nominee. And for Westly to start the "no new taxes" cry just leaves the Democrats politically crippled.

For the record, Angelides is right: The state needs more tax revenue. And under his proposal, most of it would come not from "working families" who are worried about their gas bills but from people like, well, Steve Westly and Phil Angelides millionaires. His proposed income tax increase only affects households with more than $500,000 in income. Sorry: You’re in that range, you can afford it.

So Mr. Westly: Stop with the antitax lies. This shit makes me sick.

On to the good news.

I get the feeling, from over here in San Francisco, that there’s a real change afoot in East Bay politics. For the past few years, a not-so-loose cadre made up of state senator Don Perata, Mayor Jerry Brown, and Councilmember Ignacio De La Fuente has been consolidating power in Oakland, calling the political shots and giving developers a blank check. Two of the three have real, ahem, ethical issues, and one’s itching to leave town for Sacramento, but so far, nobody’s been able to truly challenge them.

Until Ron Dellums.

Now, I know that Dellums has been out of Oakland for years, that he’s a DC lobbyist, and I’ve heard the rap that he’s long on rhetoric and short on urban policy ideas. But we met him last week, and I can tell you that, at 71, he’s still one of the most energetic and inspirational speakers around, and if he’s elected mayor, he will, by force of personality and national stature, instantly become a center of power that’s distinct from (and will often be in opposition to) the PerataDe La Fuente bloc. SFBG

Paying for renewal

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› gwschulz@sfbg.com

BayviewHunters Point residents have cause to be concerned about any redevelopment plan that would dramatically alter the face of their neighborhoods, particularly given the displacement and corporate subsidies that have resulted from past redevelopment schemes in San Francisco.

So when housing activist Randy Shaw reported on his Beyondchron.org Web site April 10 that "hundreds of millions of taxpayer dollars" in revenue from the BayviewHunters Point Redevelopment Plan could go toward rebuilding Candlestick Park for the 49ers, his claim created a firestorm. The rumor quickly circulated among community groups and lefty media outlets already fearful of what SF officials had in store for the southeast section of the city.

But Marcia Rosen, executive director of the San Francisco Redevelopment Agency, says Shaw got it wrong: The tax increment financing (TIF) the main source of redevelopment money from BayviewHunters Point was never intended for Candlestick Park. Sup. Sophie Maxwell, whose district includes the project area, also told the Guardian last week that there hasn’t been any talk of subsidizing the stadium project or its surrounding housing.

Nonetheless, Maxwell has spent weeks trying to respond to community concerns about the stadium funding, as well as a host of other concerns raised by a portion of the community that has been galvanized by the redevelopment issue. On April 20 she added an amendment to the plan that explicitly restricts any TIF money from outside the Candlestick Point Special Use District from going anywhere near the stadium.

But that’s unlikely to end the controversy over a plan that Maxwell has been working on for six years and that has been in the pipeline for nearly four decades.

"This plan didn’t just happen out of thin air," Maxwell said at the May 9 Board of Supervisors meeting. "It came from many different plans in the Bayview. It was an accumulation of many outreach efforts. The plan has been thoroughly vetted. The scrutiny and disagreements have only made it stronger."

The legislation before the board for consideration now contains two parts: a 136-acre area that includes the Hunters Point Hill residential neighborhood, and a much larger area, added in the ’90s, that would expand the Redevelopment Agency’s jurisdiction by 1,361 acres.

Inside the enormous widened area is the Candlestick Point Special Use District, which was created by voters in 1997 as part of a narrowly passed legislative package infused with $100 million in bond money for the construction of a new Candlestick stadium and shopping mall. The plan was stalled until last month, when public mutterings about an alternative plan with more housing units began to circulate.

The propositions (there were two in 1997) allocating $100 million for Candlestick are still technically in effect. The money was never spent, and the football club’s ownership has since indicated it may build the project without that bond money in order to focus on housing. A feasibility study is currently under way, and no plans have yet been made public.

According to a report released by the Budget Analyst’s Office in late April, the Redevelopment Agency is expecting to generate almost $300 million in TIF money from new property taxes over the next 45 or so years to pay for the redevelopment plan. Approximately $30 million of the money available for infrastructure improvements and low-income housing would be contingent on business activity inspired by a new stadium, meaning the agency could end up with much less if the stadium area remains in its current state.

TIF money generated inside Candlestick Point can still flow outward, new stadium or not. But Rosen clarified for us that TIF money could also go toward infrastructure improvements associated with the Candlestick project, such as roads, streetlights, green spaces, and housing at least 50 percent of which is required to be affordable to those with low incomes, a far higher rate than citywide requirements. None of this could happen, however, without board approval and considerable public oversight.

"There is the possibility that the board could allocate tax-increment financing to a park or other public space," Rosen said.

Other concerns residents had over the redevelopment plan have cooled somewhat as Maxwell has introduced a series of amendments, including a call for regular management audits during the plan’s implementation and increased public participation in approving "significant land use proposals," an amendment she introduced last week.

But some skeptics have continued to express concern about gentrification of the area and the displacement of its predominantly minority residents.

Shaw, who opposes the plan, told us his greatest concern now is no longer the 49ers but turnout at public meetings.

"The proponents have outnumbered the opponents," he said. "I haven’t seen the kind of turnout we would have expected." SFBG

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tredmond@sfbg.com

I was in upstate New York last weekend, flying low over farmlands and old industrial cities in one of those bumpy little "commuter" planes, then driving through small towns in areas that, I’ll say politely, have seen better economic days. And yet, everywhere I went, a landmark stood out: From the air and from the ground, the public schools seemed universally spacious and well maintained. They had nice baseball and football fields, all-weather tracks, and new playground equipment. I didn’t go inside, but I can tell you nonetheless that the schools in most of New York are way better than the schools in most of California.

And there’s a good reason for that.

My brother owns a house in Putnam Valley, a small town about two hours north of New York City. He bought it 15 years ago, for about $105,000, and while it has increased in value, it’s still assessed at way less than half of what I paid for my house in San Francisco. And yet he pays more property taxes than I do.

He’s a contractor, a small-business person, subject to the volatile whims of the home-building industry, and he’s trying to support two kids and save money for their college fund. He pays $5,000 a year in school taxes alone, and it’s a real burden.

But for that money, he gets to send his kids to public schools that are better than most $25,000-a-year private schools. He considers it a bargain.

In New York they spend about twice as much per student as we do in California. That money has to come from somewhere, and a lot of it comes from property taxes. This isn’t rocket science even people educated in California should be able to figure it out: You want good schools, you have to pay for them.

Then I came back and met with Steve Westly, the state controller and the front-runner for the Democratic nomination for governor. Westly loves to talk about education but he’s not even willing to commit to seeking changes in Proposition 13 that would allow for higher property taxes on commercial buildings to pay for the schools.

It’s this air of unreality we have in California. For 28 years, since the "tax revolt" movement was born in this state, politicians have pandered to the selfish among the voters (and that’s most of them, it seems) by saying they can have it all for free. We’ve been promised a beautiful state with lots of parkland, top-rate public schools and colleges, massive spending on cops and prisons, stable union jobs for public employees, abundant water for thriving agriculture, extensive resources to meet urban problems … and low taxes for all.

Let’s party.

Westly’s Democratic opponent, Phil Angelides, is at least honest: He promises the same sorts of things Westly does, but he admits that somebody will have to pay for them. He’s focusing on the wealthy, which is the right idea this is a rich state, and the millionaires have done quite well the past few years. But the rest of us will get hit a bit too, and I hate to say it, but we should.

Because the teachers don’t have to be underpaid, the roads don’t have to be crumbling, the parks don’t have to be overcrowded, the hospitals don’t need to be teetering on the edge of collapse. We can have high-speed rail to LA.

Taxes are a small sacrifice for the public good. My parents’ generation seemed to get that. California’s baby boomers apparently don’t. SFBG

A strong small-business agenda

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EDITORIAL You read the academic journals these days, or peruse economic-development Web sites, and everyone seems to be talking about sustainable urban economics. It’s as if the mantra that was first put forward by Jane Jacobs, David Morris, and a few others a quarter century ago is very much in the mainstream today: Cities function best with diverse economies dominated by locally owned businesses, with money circuutf8g within the community. Cutting-edge restaurants talk about serving locally grown food. Beverage savants want local beer and wine. Just about everyone — including the mayor and the San Francisco Chamber of Commerce — wants to participate in a program called Shop Local.

It’s a wonderful, encouraging trend — but if it’s going to make any real difference in this city, it has to become a lot more than lip service. Consider: Just as Mayor Newsom was proudly signing on to a Shop San Francisco program, the mayor and the supervisors were busy approving plans to allow Home Depot — an anticompetitive out-of-town corporation that destroys local small business and undermines the entire concept of a strong local economy — to build a giant store on Bayshore Boulevard.

 It’s taken legal action by Sue Hestor and the neighborhood leaders to derail (for now) the mayor’s plans to build high-end condos all over the eastern neighborhoods — threatening hundreds of locally owned businesses.

Downtown business leaders and the groups they fund still push for policies that hurt most of the businesses in the city — and too many small-business people still go along.

Here’s the reality: Supporting small businesses — and moving San Francisco toward a sustainable economy — requires a lot more than a slogan. The people who are behind the Shop Local movement know that. They’re promoting a wide range of national and local policies designed to change not only attitudes but the direction of public policy.

San Francisco, a progressive city known for its wonderful, lively, unique neighborhoods, ought to be a national leader in the battle. But others (Philadelphia, for example) are moving way ahead. This city is still stuck in an ancient (and regressive) economic mind-set.

There are a number of key things the city can do to turn that around and become a truly small-businessfriendly place — and most of them go far beyond public-relations efforts and cutting through red tape. The basic approach to policy needs to change; here are a few ways to start:

 Stop allowing big chains to come into town. That’s not exactly rocket science, and it isn’t so hard either: Hayes Valley and North Beach both have "formula retail" laws that restrict the chains, and there’s talk of doing the same in Potrero Hill. But why does this have to be fought block by block? Why not a citywide ordinance that protects every neighborhood commercial district — and, more important, keeps the life-sucking big-box giants away from the city altogether?

 Make small, locally owned businesses part of the planning process. The city’s own (limited) studies have made clear that the type of development the mayor and the current city planning leadership has in mind would damage local businesses, particularly in the repair, distribution, and small manufacturing areas. That alone ought to be grounds to change directions. Why not a checklist for every new project that includes the question: Will this displace existing locally owned businesses? If the answer is yes, the project should be rejected.

Take progressive business taxes seriously. There’s almost certainly going to be an effort this fall to change the city’s business-tax structure, with one of the goals being an increase in overall revenue. That’s great, and it ought to happen — but the tax rates have to be shifted too, so that a tiny local retail outlet doesn’t pay the same amount as the Gap. (Socking big-box outlets with a special tax or fee — possibly based on the fact that they are by nature car-driven operations — might be a nice way to bring in some cash.)

You can’t be friendly to small local businesses these days without taking sides in the national economic war — and that means coming out against the big chains. Until San Francisco does that, all the talk of supporting local merchants will amount to nothing. SFBG

20 questions for Fiona Ma

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Sup. Fiona Ma, who is running for state Assembly, last week decided to skip an endorsement interview that she scheduled with the Guardian – making herself unavailable to answer questions important to Guardian readers – so we’ve decided to put some of our questions out the publicly.

We encourage voters to press her for answers before the June primary, and if you have any luck, please let us know by e-mailing City Editor Steven T. Jones at steve@sfbg.com.

1.   What kind of health care system do you support for California? Ma’s opponent, Janet Reilly, has made single-payer health care her top campaign priority and issued a detailed plan for what that would entail. Health care is one of just five issues that Ma discusses on her website (the others being Housing, Education, Budget/Jobs, and Transportation), vaguely indicating she support universal coverage and stating, “I support state measures to provide incentives for business owners to cover their workers and other such efforts, but we need the political will on the national level to be successful.”  The first part sounds as if she’s advocating tax breaks to businesses that offer private insurance health plans to their employees. The caveat at the end sounds like she doesn’t intend to do much of anything until the feds do. But then, during the only debate that she’d agreed to have with Reilly, Ma said that she support a single-payer health care system, without offering any other details. This is arguably the most important issue the Legislature will face in the next few years and we have a right to know whose side Ma would be on.

2.   What will you do to protect renters and rental units in San Francisco? Again, it was the sole debate and its aftermath that yielded much confusion about where Ma stands regarding renters. She has made no secret of her strong support for increasing homeownership opportunities and her record is one of opposing local efforts to slow the number of Ellis Act evictions. But at the debate, she went further by declaring, “The Ellis Act is sometimes the only way for some people to become homeowners and I support it.” After being criticized for the statement, she defended herself in a piece on BeyondChron.org that only seemed to dig a deeper hole, arguing that she supports “ownership units [that] are affordable to San Franciscans of all income levels.” And how exactly is that going to happen?

3. What’s up with the $20 million?    In that same Beyondchron.org column, to defend her bad record on renters, Ma cited an effort that she made earlier this month to amend the city’s $20 million housing subsidy program to prioritize those who have been evicted under the Ellis Act. City officials said it would have had little practical effect and the gesture seemed to contradict you statements of support for Ellis Act evictions. Why should we see this as anything but a crass political deception?

4.      Why have you been unwilling to provide details about your policy positions even on the five issues you raised on your website – so voters would know how you intend to vote?

5.      How do you intend to increase revenues coming into the state, which you will need for even the broad goals you cited in education, transportation, and business “incentives”? We’re particularly interested in this answer after watching Ma chair the city’s Revenue Advisory Panel two years ago. That body was charged by the mayor’s office with recommending new revenue sources, and ended up recommending none.

6. Are you just a pawn of downtown business?At luncheon speeches that she gave to SFSOS and the San Francisco Chamber of Commerce over the last couple years, Ma you blasted and belittled her colleagues on the board while fawning over the business community. What is she willing to do to show her independence from downtown?

7.      Why do most of your colleagues on the Board of Supervisors support Janet Reilly —  and why shouldn’t voters see that as an indictment of your tenure as a supervisor?

8.      Is there anything new that you would require of the business community, such as improved labor or environmental standards, greater corporate accountability and transparency, regulation of greenhouse gas emissions, health care benefits for employees or their same sex partners?

9.      Your record is one of consistent opposition to requiring developers to pay more or offer more public benefits, such as open space or affordable housing. Why shouldn’t rich developers making obscene profits pay a little more? Has your position been influenced by the financial support of people like Oz Erickson, Joe Cassidy, Warren Hellman, Don Fisher, and Bob McCarthy?

10.     Why did you oppose legislation that would have limited the number of parking spaces that could be built in conjunction with the nearly 10,000 housing units slated for the downtown core, legislation that Planning Director Dean Macris called critical to good planning? Did your support from the downtown developers who opposed it have anything to do with your position?

11.     You supported a deal that extended Comcast’s cable contract without requiring any new public programming requirements, even though other comparable cities have better plans. Do you think that’s why Comcast is supporting your campaign?

12.     You’ve been a big advocate of tax breaks for corporations, including the biotech and film industries in San Francisco. How would you make up for these lost revenues and are you concerned that having cities compete with tax breaks creates a race to the bottom that starve public coffers? And on the biotech tax credit, given that such companies often lose money for years before reaping high windfall profits, how would be insure those companies eventually pay taxes to the city rather than just moving somewhere where they won’t be taxed?

13.     You were a longtime supporter of Julie Lee, continuing to support her even after it was revealed that she illegally laundered public funds into political campaigns. Why, and do you continue to support her?

14.     In a recent letter to supporters, you warned that Janet Reilly was trying to buy the campaign so people needed to give more. At the time, she had raised about $600,000 to your $700,000. How do you justify what appears to be a deceptive statement to your own supporters?

15.     We understand you support the death penalty, but many studies have shown that those on death row have been represented by inexperienced and ineffective lawyers, that they are disproportionately poor and minorities, and that based on detailed studies conducted in other states, it is likely that at least a few are not guilty of their crimes. Given all of that, are there any reforms that you’d like to see in how executions are carried out?
16.     In the debate, you said that the state is not required to balance its budget and that the federal government may simply print money to cover its budget deficits. Would you like to clarify or amend either statement?

 17.     What is your position on drug prohibition? Are there any current illegal drugs that you would decriminalize or are there any other changes you would make to the war on drugs?

18.    
The statement you issued on your website dealing with “Transportation” – one of just five issues you addressed – is only 48 words long. Is there anything that you’d like to add? And are there any other issues facing the state that you think are important?

19.    
  The Reilly campaign has warned of a possibly illegal effort to attack her by a group called “Leaders for an Effective Government,” using money laundered by Comcast and your old boss, John Burton. Are you aware of this effort and have you taken any steps to stop or repudiate it?

20. Why do you think it’s okay to avoid tough questions from the press?

Saluting small business

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> bruce@sfbg.com

  Back in my hometown of Rock Rapids, Iowa, a flat land of tall corn and homestead farms way out in northwest Iowa, my grandfather and father ran a small, family owned drug store for more than seven decades. Their slogan, known throughout the territory, was "Brugmann’s Drugs: Where drugs and gold are fairly sold, since l902."

   The town was then and still is about 2,800 in population, and we were miles away from the nearest cities of Sioux Falls, South Dakota, and Sioux City, Iowa. The merchants, and the farmers and townsfolk who patronized them, had to go it pretty much alone and depend on each other for economic sustenance.  The two Brugmann families bought shoes at Jensen’s and Hornseth’s shoe stores, purchased clothes that often didn’t quite fit at Bernstein’s department store, bought our groceries from Bob Bendinger and Tony Sieparda’s grocery stores, ate meals out at Jay’s and the Grill Café, banked at the Rock Rapids State Bank and later the Lyon County bank,  went to endless church suppers in town and in the country to support the local churches, hired Jim Wells to do our taxes, used both Doc Wubbena and Doc Cook, the town’s two doctors, and had our teeth done by Doc Lee and Doc Fisch.

   My dad, as the town pharmacist, would often get called at night, sometimes twice, to go down to the store and fill a prescription for one of the doctors tending a patient who needed emergency help. My wife’s father, who owned a lumberyard in Bennet, Nebraska, and later a hardware store in Le Mars, Iowa, followed the same routine. As did her grandfathers, one who founded banks in small towns in Nebraska and Kansas, another who ran a grocery store in Topeka, Kansas.

   I asked my grandfather and my dad why they went out of their way to do all these things in town and why I always got pulled along as Con Brugmann’s boy. "We want to keep our money working in town," they would reply. "That helps the store and that helps the town." I also asked why they put regular ads in the local Lyon County Reporter, run by Paul Smith as the fourth generation of the pioneering Smith family, when everybody already knew what the store offered in merchandise and service. "That’s the price of having a good local paper in town,” my dad would say.

   Significantly, Brugmann’s Drugs and our old store building have been transformed into the B and L café, a friendly oasis featuring yummy homemade pies and soups and a unique setting full of antique furniture. It is owned and operated by Beth and Lawrence Lupkes, a husband and wife team who work long and hard to keep the café going from dawn till dusk seven days a week. Their key to economic sustenance: they keep their “day” jobs, Beth as a dispatcher for the county’s emergency services, Lawrence as a rural mail carrier and mayor. Lawrence’s sister is the main cook and they press family members into service.

   When my wife Jean Dibble and I founded the Guardian in l966, we quickly found that the cooperative small business way of life that worked in little towns in Iowa and Nebraska and Kansas worked the same way in San Francisco with its tradition of neighborhoods and communities. Small business, we found, was not only the leading job generator and a key piece of the city’s urban fabric. Small business was critical to building sustainable local economies in San Francisco and most other cities. Jean and I like to think that the Brugmann and Dibble families have been continuously making small business contributions to our communities since l902.

   A long list of studies shows that small businesses keep more money circuutf8g in the local economy than big chains. The chain money is wired out of town every night—and chains are more likely to buy from other chains, in bulk, and thus rarely patronize other local businesses. So very little of the dollar you spend at a chain store stays in the community, which means its impact on the local economy is negligible. Money that stays in town creates more jobs, more business activity, a more stable economy and a larger tax base. Thankfully, no Wal-Mart came to the Rock Rapids area, but Wal-Mart came to several other Iowa communities with disastrous consequences to the downtowns and local tax bases of three towns and seven counties. Many other studies showed similar consequences in many other areas of the country.  (The Hometown Advantage, Big Box Economic Impact Studies from the Institute for Local Self Reliance. http://www.newrules.org/retail/econimpact)

    When academics and policy makers around the country are increasingly discussing ways that cities can be more self-reliant, work more with local resources and thus be both environmentally and economically stronger, they are talking about the value of small, locally owned, independent businesses.

    Economies are all subject to business cycles. If a city’s economy is dominated by a monocrop and or a few big companies, the entire economy suffers when they take a hit. Rock Rapids is tied to the farms and the weather.  Detroit’s fate is tied to the auto industry. If Microsoft and Boeing have blips, the impact is felt across Seattle. But a community with many different local businesses in many different niches is much more able to survive and even prosper in tough times.  After the l906 earthquake, it was the entrepreneurs and small businesses that lifted the city from the ashes. After the dot-com bust, it was again the small businesses and the entrepreneurs who are helping cushion the blow and leading the recovery.

    The bottom line is that the big chains see a community like San Francisco as a place to extract money from as quickly as possible, much like the strip miners in the Sierra. Small businesses see the city as a place to invest human capital to build real community—to join merchant groups, get involved in local politics, hire local kids, patronize other businesses, work to invigorate their neighborhoods, spread the gospel of shopping local. (See the San Francisco Locally Owned Merchants’ Alliance at http://www.sfloma.org/whylocal.com)

    Jean and I and the Guardian staff are happy to salute the small business community with our second annual Small Business Awards. Our congratulations to the winners, all working in their own way to transform San Francisco into a sustainable local economy. And our congratulations to the thousands of small business people in San Francisco, and the merchant groups behind them, who daily struggle valiantly against daunting odds to keep their businesses going, their neighborhoods vibrant, and San Francisco an incomparably great city.

     This year, we give special recognition to Arthur Jackson, who for almost four decades helped thousands of people get jobs in small, independent, locally owned businesses through his employment agency, Jackson Personnel Agency. He died on April l0 at     age 58 after a courageous fight against a series of illnesses including a kidney transplant.  He lived his favorite quote: “Putting people to work is a passion for me, because the paycheck fully empowers our community.” Arthur, as we all called him, won our diversity in small business award last year and his name will live on at the Guardian in the form of our annual Arthur Jackson diversity in small business award.

The right housing fees

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EDITORIAL The San Francisco Chronicle has finally noticed what we reported a month ago: The Board of Supervisors has effectively put in place a moratorium on new market-rate housing on the east side of the city. We hear that city planners are looking for loopholes to undermine the temporary ban, but the intent of what the supervisors did is clear: Until there’s a detailed and valid review of how new high-end condos and lofts impact blue-collar jobs and low-income housing, the developers will have to let their demolition and excavation equipment idle.

Meanwhile, Sup. Chris Daly is moving to increase significantly the amount of low-cost housing that private developers have to build to win permission for future projects. Daly’s legislation is a good start and sets the right tone for the debate, but the board should go even further.

The Daly plan would apply to almost all new market-rate housing built anywhere in the city and would take effect whenever the moratorium ends. It would require most developers to offer 15 percent of the units of any project for less than market rates, and that number would jump to 25 percent if the affordable housing was built on another site. In other words, a builder who wants to put up 500 luxury condos in SoMa would have to build 125 affordable units somewhere else in the city.

That’s nice, but it’s not enough.

The city’s own general plan makes it clear that 72 percent of all new housing needs to be affordable to moderate- and low-income people. And the planning process for the eastern neighborhoods has still offered no proposals for how to make that happen.

At the same time, of course, the plans to intensely develop an area poorly served by transit and generally bereft of public infrastructure and open space utterly ignore the fact that it will cost hundreds of millions of dollars to create real neighborhoods (instead of clusters of heavily fortified, gated buildings).

Daly’s got the right idea: Developers are making a fortune building million-dollar condos in San Francisco, and they can well afford to give the city a whole lot back. But it’s worth taking a longer approach here and considering the price of bringing as many as 100,000 more people to SoMa, Potrero Hill, Dogpatch, the central waterfront, and BayviewHunters Point and figure out who is going to pay for it.

Daly could start by asking for a detailed independent study of what it really costs a developer to build new condo units in the city and what the current profit margins are. Then take the city’s affordable-housing needs, the need for public-sector development, and the estimated new tax revenue and compare: Can fair taxes and requirements on the developers raise enough money to meet the city’s needs?

And, if not, we get back to the question this paper has been asking for over a year: Why are we building any new market-rate housing, anyway? SFBG

 

Doomsday dream believer

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We didn’t commit suicide,” Jim Jones gravely intones in an audiotape capturing the final moments of Jonestown. “We committed an act of revolutionary suicide protesting the conditions of an inhumane world.”

Nearly 30 years after the deaths of more than 900 people in the Guyanese jungle, Stanley Nelson’s deeply affecting Jonestown: The Life and Death of Peoples Temple replays Jones’s final, twisted address, setting in motion what the doc tabs “the largest mass ‘suicide’ in modern history.” Using a remarkable cache of vintage footage, as well as candid interviews with Peoples Temple survivors, relatives, and other eyewitnesses, Nelson examines the massacre with a journalist’s eye. Why the tragedy happened may never be explained, but seldom before has the how of Jonestown been so clearly delineated.

Long before “drinking the Kool-Aid” filtered into the popular lexicon, young Jim Jones was an ambitious preacher whose ideas about racial equality proved too radical for small-town Indiana. Jones and his wife, Marceline, adopted several children from different ethnic backgrounds; one the few still alive Jim Jones Jr., who says he was the first African American child to be adopted by white parents in Indiana appears in Jonestown, as do early church members who followed Jones to Northern California (so chosen because he believed the region would be safe in the event of a nuclear attack). The racially diverse commune was “like a paradise,” a former resident recalls; recordings of Jones’s uplifting sermons and the jubilant Peoples Temple choir, as well as images of happy farmers, seem to bear this out.

Of course, illusion played a big part in Jones’s metier. One of Nelson’s coups is footage of a faith healing paired with an interview that exposes the “patient” as one of Jones’s (perfectly healthy) secretaries. Various ex-followers corroborate each other’s horror stories; one memorable sequence features overlapping testimony about how devotion was measured by sleep deprivation. Jones’s sexual proclivities, which contradicted what he preached and involved sleeping with both male and female disciples (whether or not they were willing), are discussed, as is the general feeling of fear and paranoia that increased as Jones gained more control. A “loyalty test” involving a vat of untainted punch is also detailed; a woman who was there surmises that Jones wondered if he was “potent enough to get people to do it.”

Jones’s ability to manipulate his followers demonstrates the kind of power later echoed by other self-destructive cults. But while Heaven’s Gate seemed a little loony from the start, what with the space aliens and all, the Peoples Temple represented itself beautifully to outsiders. The San Francisco political community was especially taken with the energetic, racially diverse congregation; as Jonestown points out, the church could instantly supply masses of well-behaved protestors, as well as influence key elections by voting as a single bloc. On a television talk show, thenCalifornia assemblyman Willie Brown deems the Peoples Temple “the kind of religious thing I get excited about.”

Even the Guardian was taken in by the Peoples Temple, reporting on its progressive humanitarian efforts in a March 31, 1977, article titled “Peoples Temple: Where Activist Politics Meets Old-Fashioned Charity.” Read with the benefit of hindsight, the piece is often chilling, as when Jones arrives late to a church service because he had to stop and console a woman “who was talking suicide.” Jones’s distrust of government is already in full force (“I have a lot of guilt to know my taxes go to the shah of Iran and Chile”); his hatred of the press (as the film explains, inflammatory coverage hastened his expatriation) less so.

A good chunk of Jonestown is devoted to November 18, 1978, aided with startling footage of doomed congressman Leo Ryan’s Guyana visit and the chaos that erupted in its wake. Two of the men who lived through “White Night” but saw family members (including young children) die before their eyes share their stories, and the emotional impact is undeniable. And then there’s that audiotape, which is even more frightening when replayed. As Jonestown reveals, the line between suicide and murder could not be more distorted: Deceived by promises of paradise, hundreds of people joined a church that championed equal rights then found themselves living in an isolated world where even the most basic rights were denied.

 

Make Wal-Mart pay

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EDITORIAL According to the University of California’s Labor Center, the state spent $86 million last year paying for heath care and social services for the families of people who work at Wal-Mart. That’s right: Wal-Mart pay is so low, and so few of its workers have decent health insurance, that a lot of employees wind up using public health clinics and the taxpayers foot the bill.

It’s unfair not only to the Wal-Mart employees and the rest of us who have to pay the bills for one of the most successful and lucrative companies in the world, but also to other employers in the state, particularly small businesses that struggle to provide health insurance.

State senator Carole Migden has introduced a bill that would force Wal-Mart to quit demanding millions in public subsidies. SB 1414 would require any business with 10,000 or more employees in California either to put 8 percent of its total payroll into health insurance for workers or pay an equivalent amount of money to the Department of Industrial Relations. That’s still a fairly low payment a lot of companies spend far more than 8 percent on health benefits, and Wal-Mart can well afford to do better. But it’s a good start, and it sends the message that employers who won’t pay a living wage can’t just count on California to make up the difference.

Wal-Mart is under fire from activists around the country for its cutthroat competition and its attempts to keep unions out and wages low. But it’s by no means the only employer that is trying to get out of paying health benefits. Migden’s bill would only hit the biggest of the big, but it’s similar to legislation proposed by Sup. Tom Ammiano that would force San Francisco businesses (including much smaller companies) to provide some sort of health care.

In the end, all of this is the wrong model: Employer-based health insurance is an unstable, inefficient, and hugely expensive way to cover medical bills. At some point, even the Wal-Marts of the world should realize that paying taxes to fund a national single-payer health system is cheaper and better for everyone.

But that’s not happening today, and Wal-Mart’s corporate welfare is. The legislature should pass Migden’s bill posthaste.

NOISE: Mani, dancey, and ssssecretssss at SXSW…

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Wednesday night, I checked out the Death and Taxes party at Austin’s new Beauty Bar, owned by Trail of the Dead’s Jason and open all of three days, he told me. He seemed to be coping well with his anarchic new life as a bar owner (the fiancee ran up to tell him he shouldn’t treat people to multiple rounds of drinks). This place used to be a car repair joint — above the conversation pit, former Bay Area- and now NYC-based rapper and Stanford grad MC Lars was playing old school hip-hop.

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MC Lars stoops to DJ.

Z is for “zany”: The costumed, manic Japanese punk combo Peelander-Z drummed up an audience outside their show on packed Sixth Street. Can I get some ham with my band?

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Darlington, UK, art-punk group We Start Fires got some fellahs hot under the collar — all while making ragged but right-on Fall-like rock. “You’re sexy!” someone yelled. “American men are so nice,” the keyboardist said demurely.

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Thursday afternoon, at the Kill Rock Stars/5RC day party, Panther broke out the nasty now-I-lay-me-down dance steps for the small but psyched crowd. And there was no KFC from KRS! Just plenty of that SXSW party staple: BBQ pork and chicken, beans, cole slaw, and white bread. Can’t forget the sliced white bread.

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Spider and the Webs also performed at the KRS/5RC soiree. Maggie Vail of the Bangs, who works for KRS, jumped up to sing backup vocals.

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Thursday night, I slipped into the secret Beastie Boys 7 pm show at Stubb’s. Kewl to see the three without costumes, close up. But you’re going to have to trust me on this: My digital camera pooped out far too soon. Ask me to show you my cell phone camcorder “short films.”

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SXSW gets it up for Ad-Rock.

SF’s economic future

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Sometime early this spring, while most of Washington, D.C. was watching the cherry trees bloom and thinking about the impending Iran-contra hearings, a few senior administration officials began discussing a plan to help domestic steel companies shut down underutilized plants by subsidizing some of the huge costs of pension plans for the workers who would be laid off.

The officials, mostly from the Departments of Labor and Commerce, saw the plan as a pragmatic approach to a pressing economic problem. With the steel industry in serious trouble, they argued, plant closures are inevitable — and since the federal government guarantees private pension plans, some companies will simply declare bankruptcy and dump the full liability on the taxpayers. Subsidies, they argued, would be a far cheaper alternative.

But the plan elicited sharp opposition from members of the Council of Economic Advisors, who acknowledged the extent of the problem but said the proposal was inconsistent with the Reagan economic philosophy. The problem, The New York Times reported, was that “such a plan would be tantamount to an industrial policy, an approach the president has long opposed.”

For aspiring conservative politicians, the incident contained a clear message, one that may well affect the terms of the 1988 Republican presidential debate. To the right-wing thinkers who control the party’s economic agenda, the concept of a national industrial policy is still officially off-limits. In San Francisco, the ground rules are very different. All four major mayoral candidates agree that the city needs to plan for its economic future and play a firm, even aggressive role in guiding the local economy. The incumbent, Dianne Feinstein, has established a clear, highly visible — and often controversial — industrial development policy, against which the contenders could easily compare and contrast their own programs.

The mayoral race is taking place at a time when the city is undergoing tremendous economic upheaval. The giant corporations that once anchored the local economy are curtailing expansion plans, moving to the suburbs and in many cases cutting thousands of jobs from the payroll. The once-healthy municipal budget surplus is gone. The infrastructure is crumbling and city services are stressed to the breaking point.

By all rights, the people who seek to lead the city into the 1990s should present San Francisco voters with a detailed vision for the city’s economic future, and a well-developed set of policy alternatives to carry that vision out.

But with the election just three months away, that simply isn’t happening. Generally speaking, for all the serious talk of economic policy we’ve seen thus far, most of the candidates — and nearly all the reporters who cover them — might as well be sniffing cherry blossoms in Ronald Reagan’s Washington.

“San Francisco’s major challenge during the next 15 years will be to regain its stature as a national and international headquarters city. This is crucial to the city because much of its economy is tied to large and medium-sized corporations….The major source of San Francisco’s economic strength is visible in its dramatic skyline of highrise office buildings.”

—San Francisco: Its economic future

Wells Fargo Bank, June 1987

“In San Francisco, you have the phenomenon of a city losing its big-business base and its international pretensions — and getting rich in the process.”

—Joel Kotkin, Inc. Magazine, April 1987

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IN MUCH OF San Francisco’s news media and political and business establishment these days, the debate — or more often, lament — starts with this premise: San Francisco is in a bitter competition with Los Angeles. At stake is the title of financial and cultural headquarters for the Western United States, the right to be called the Gateway to the Pacific Rim. And San Francisco is losing.

The premise is hard to deny. If, indeed, the two cities are fighting for that prize, San Francisco has very nearly been knocked out of the ring. Just a few short years ago, San Francisco’s Bank of America was the largest banking institution in the nation. Now, it’s third — and faltering. Last year, First Interstate — a firm from L.A. — very nearly seized control of the the company that occupies the tallest building in San Francisco. The same problems have, to a greater or lesser extent, beset the city’s other leading financial institutions. A decade ago, San Francisco was the undisputed financial center of the West Coast; today, Los Angeles banks control twice the assets of banks in San Francisco.

It doesn’t stop there. Los Angeles has a world-class modern art museum; San Francisco’s is stumbling along. The Port of San Francisco used to control almost all of the Northern California shipping trade; now it’s not even number one in the Bay Area (Oakland is). Looking for the top-rated theater and dance community west of the Rockies? San Francisco doesn’t have it; try Seattle.

Even the federal government is following the trend. A new federal building is planned for the Bay Area, but not for San Francisco. The building — and hundreds of government jobs — are going to Oakland.

In terms of a civic metaphor, consider what happened to the rock-and-roll museum. San Francisco, the birthplace of much of the country’s best and most important rock music, made a serious pitch for the museum. It went to Cleveland.

For almost 40 years — since the end of World War II — San Francisco’s political and business leaders have been hell-bent on building the Manhattan Island of the West on 49 square miles of land on the tip of the Peninsula. Downtown San Francisco was to be Wall Street of the Pacific Rim. San Mateo, Marin and the East Bay would be the suburbs, the bedroom communities for the executives and support workers who would work in tall buildings from nine to five, then head home for the evening on the bridges, freeways and an electric rail system.

If the idea was to make a few business executives, developers and real estate speculators very rich, the scheme worked well. If the idea was to build a sound, firm and lasting economic base for the city of San Francisco, one could certainly argue that it has failed.

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NOT EVERYONE, however, accepts that argument. Wells Fargo’s chief economist, Joseph Wahed, freely admits he is “a die-hard optimist.” San Francisco, he agrees, has taken its share of punches. But the city’s economy is still very much on its feet, Wahed says; he’s not by any means ready to throw in the towel.

Wahed, who authored the bank’s recent report on the city’s economic future, points to some important — and undeniable — signs of vitality:

* San Francisco’s economic growth has been well above both the national and state average during the 1980s — a healthy 3.67 a year.

* Per-capita income in San Francisco is $21,000 a year, the highest of any of the nation’s 50 largest cities.

* New business starts in the city outpaced business failures by a ratio of 5-1, far better than the rest of the nation. * Unemployment in San Francisco, at 5.57, remains below national and statewide levels (see charts).

San Francisco, Wahed predicts, has a rosy economic future — as long as the city doesn’t throw up any more “obstacles to growth” — like Proposition M, the 1986 ballot measure that limits office development in the city to 475,000 square feet a year.

John Jacobs, the executive director of the San Francisco Chamber of Commerce, came to the same conclusion. In the Chamber’s annual report, issued in January, 1987, Jacobs wrote: “The year 1986 has been an amusing one, with both national and local journalists attempting to compare the incomparable — San Francisco and Los Angeles — and suggesting that somehow San Francisco is losing out in this artificially manufactured competition. Search as one might, no facts can be found to justify that assertion.”

Wahed and Jacobs have more in common than their optimism. Both seem to accept as more or less given the concept of San Francisco as the West Coast Manhattan.

Since the day Mayor Dianne Feinstein took office, she has run the city using essentially the policies and approach championed by Wahed and Jacobs. Before San Franciscans rush to elect a new mayor, they should examine those strategies to see if they make any sense. After nearly a decade under Feinstein’s leadership, is San Francisco a healthy city holding its own through a minor downturn or an economic disaster area? Are San Francisco’s economic problems purely the result of national and international factors, or has the Pacific Rim/West Coast Wall Street strategy failed? Is the economy weathering the storm because of the mayor’s policies, or despite them? And perhaps more important, will Feinstein’s policies guide the city to new and greater prosperity in the changing economy of the next decade? Or is a significant change long overdue?

The questions are clear and obvious. The answers take a bit more work.

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SAN FRANCISCO’S economy is an immensely complex creature, and no single study or analysis can capture the full range of its problems and potential. But after considerable research, we’ve come to a very different conclusion than the leading sages of the city’s business community. Yes, San Francisco can have a rosy economic future — if we stop pursuing the failed policies of the past, cut our losses now and begin developing a new economic development program, one based on reality, not images — and one that will benefit a broad range of San Franciscans, not just a handful of big corporations and investors.

Our analysis of San Francisco’s economy starts at the bottom. Wells Fargo, PG&E and the Chamber see the city first and foremost as a place to do business, a market for goods and a source of labor. We see it as a community, a place where people live and work, eat and drink, shop and play.

The distinction is far more than academic. When you look at San Francisco the way Wells Fargo does, you see a booming market: 745,000 people who will spend roughly $19.1 billion on goods and services this year, up from $15.4 billion in 1980. By the year 2000, Wahed projects, that market could reach $229 billion as the population climbs to 800,000 and per-capita income hits $30,000 (in 1986 dollars), up from $18,811 in 1980. Employment has grown from 563,000 in 1980 to 569,000 in 1986. When you look at San Francisco as a place to live, you see a very different story. Perhaps more people are working in San Francisco — but fewer and fewer of them are San Franciscans. In 1970, 57.47 of the jobs in San Francisco were held by city residents, City Planning Department figures show. By 1980, that number had dropped to 50.77. Although more recent figures aren’t available, it’s almost certainly below 507 today.

Taken from a slightly different perspective, in 1970, 89.17 of the working people in San Francisco worked in the city. Ten years later, only 857 worked in the city; the rest had found jobs elsewhere.

Without question, an increase in per capita income signifies that the city is a better market. It also suggests, however, that thousands of low-income San Franciscans — those who have neither the skills nor the training for high-paying jobs — have been forced to leave the city. It comes as no surprise, for example that San Francisco is the only major city in the country to post a net loss in black residents over the past 15 years.

The displacement of lower-income residents highlights a key area in which San Francisco’s economy is badly deficient: housing. San Francisco’s housing stock simply has not kept pace with the population growth of the past five years. Between 1980 and 1984, while nearly 40,000 more people took up residence in the city, only 3,000 additional housing units were built.

Some of the new residents were immigrants who, lacking resources and glad to be in the country on any terms, crowded in large numbers into tiny apartments. Some were young, single adults, who took over apartments, homes and flats, bringing five of six people into places that once held families of three or four.

But overall, the impact of the population increase has been to place enormous pressure on the limited housing stock. Prices, not surprisingly, have soared. According to a 1985 study prepared for San Franciscans for Reasonable Growth by Sedway Cooke and Associates, the median rent for a one-bedroom apartment in 1985 was $700 a month. The residential vacancy rate was less than 17.

Housing is more than a social issue. A report released this spring by the Association of Bay Area Governments warns the entire Bay Area may face a severe housing crisis within the next two decades — and the lack of affordable housing may discourage new businesses from opening and drive existing ones away. When housing becomes too expensive, the report states, the wages employers have to pay to offset housing and transportation costs make the area an undesirable place to do business.

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WAHED’S WELLS FARGO report shows a modest net employment gain in San Francisco between 1980 and 1986, from 563,000 jobs to 569,000. What the study doesn’t show is that the positive job growth statistic reflects the choice of the study period more than it reflects current trends. In the late 1970s and early 1980s, San Francisco experienced considerable job growth. By 1981, that trend was beginning to reverse.

According to a study by Massachusetts Institute of Technology researcher David Birch, San Francisco actually lost some 6,000 jobs between 1981 and 1985. The study, commissioned by the Bay Guardian, showed that the decline occurred overwhelmingly to large downtown corporations — the firms upon which the Pacific Rim strategy was and is centered. Since 1981, those firms have cost the city thousands of jobs. (See The Monsters that Ate 10,000 jobs, Bay Guardian DATE TKTKTK).

Some of the firms — B of A, for example — were victims of poor management. Some, like Southern Pacific, were caught in the merger mania of the Reagan years. Others, however, simply moved out of town. And no new giants moved in to take their places.

What drove these large employers away? Not, it would appear, a lack of office space or other regulatory “obstacles” to growth: Between 1980 and 1985, San Francisco underwent the largest building boom in its history, with more than 10 million square feet of new office space coming on line. In fact, the city now has abundant vacant space; by some estimates, the vacancy rate for downtown office buildings is between 157 and 207.

The decision to move a business into or out of a city is often very complicated. However, Birch, who has done considerable research into the issue, suggests in the April 1987 issue of Inc. magazine that the most crucial concerns are what he calls “quality of life” factors. Quality-of-life factors include things like affordable family housing for employees; easy, inexpensive transit options and good-quality recreation facilities and schools — and good-quality local government. In many cases, researchers are finding, companies that need a large supply of “back office” labor — that is, workers who do not command executive salaries — are moving to the suburbs, where people who are paid less than executive salaries can actually afford to live.

“Today the small companies, not the large corporations, are the engines of economic growth,” Birch wrote. “And more often than not, small companies are growing in places that pay attention to the public realm, even if higher taxes are needed to pay for it.”

For the past 20 years, San Francisco has allowed, even encouraged, massive new highrise office development, geared to attracting new headquarters companies and helping existing ones expand. In the process, some basic city services and public amenities — the things that make for a good quality of life — have suffered.

The most obvious example is the city’s infrastructure — the roads, sewers, bridges, transit systems and other physical facilities that literally hold a modern urban society together. A 1985 report by then-Chief Administrative Officer Roger Boas suggested that the city needed to spend more than $1 billion just to repair and replace aging and over-used infrastructure facilities. Wells Fargo’s report conceeds that that city may be spending $50 million a year too little on infrastructure maintenance.

Some of that problem, as Boas points out in his report, is due to the fact that many city facilities were built 50 or more years ago, and are simply wearing out. But wear and tear has been greatly increased by the huge growth in downtown office space — and thus daytime workplace population — that took place over the previous two decades.

To take just one example: Between 1980 and 1984, City Planning Department figures show, the number of people traveling into the financial district every day increased by more than 10,000. Nearly 2,000 of those people drove cars. In the meantime, of course, the number of riders on the city’s Municipal Railway also increased dramatically. City figures show more than 2,000 new Muni riders took buses and light rail vehicles into the financial district between 1981 and 1984. Again, city officials resist putting a specific cost figure on that increase — however, during that same period, the Muni budget increased by one-third, from $149 million to $201 million. And the amount of General Fund money the city has had to put into the Muni system to make up for operating deficits rose by some 737 — from $59 million to $102 million.

The new buildings, of course, have meant new tax revenues — between 1981 and 1986, the total assessed value of San Francisco property — the city’s tax base — increased 767, from $20.3 billion to $35.8 billion. But the cost of servicing those buildings and their occupants also increased 437, from $1.3 billion to to $1.9 billion. In 1982, San Francisco had a healthy municipal budget surplus of $153 million; by this year, it was down to virtually nothing.

The city’s general obligation bond debt — the money borrowed to pay for capital improvements — has steadily declined over the past five years, largely because the 1978 Jarvis-Gann tax initiative effectively prevented cities from selling general obligation bonds. In 1982, the city owed $220 million; as of July 1st, 1987, the debt was down to $151 million.

However, under a recent change in the Jarvis-Gann law, the city can sell general obligation bonds with the approval of two-thirds of the voters. The first such bond sale — $31 million — was approved in June, and the bonds were sold this month, raising the city’s debt to $182 million. And this November, voters will be asked to approve another $95 million in bonds, bringing the total debt to $277 million, the highest level in five years.

The city’s financial health is still fairly sound; Standard and Poor’s gives San Francisco municipal bonds a AA rating, among the best of any city in the nation. And even with the new bonds, the ratio of general obligation debt to total assessed value — considered a key indicator of health, much as a debt-to-equity ratio is for a business — is improving.

But the city’s fiscal report card is decidedly mixed. For most residents, signs of the city’s declining financial health show up not in numbers on a ledger but in declining services. Buses are more crowded and run less often. Potholes aren’t fixed. On rainy days, raw sewage still empties into the Bay. High housing costs force more people onto the streets — and the overburdened Department of Social Services can’t afford to take care of all of them.

What those signs suggest is that, in its pell-mell rush to become the Manhattan of the West, San Francisco may have poisoned its quality of life — and thus damaged the very economic climate it was ostensibly trying to create.

MAYOR DIANNE FEINSTEIN’S prescription for San Francisco’s economic problems and her blueprint for its future can be summed up in four words: More of the same. Feinstein, like Wells Fargo, PG&E and the Chamber of Commerce, is looking to create jobs and generate city revenues from the top of the economy down. Her program flies in the face of modern economic reality and virtually ignores the changes that have taken place in the city in the past five years.

Feinstein’s most visible economic development priorities have taken her east, to Washington D.C., and west, to Japan and China. In Washington, Feinstein has lobbied hard to convince the Navy to base the battleship USS Missouri in San Francisco. That, she says, will bring millions of federal dollars to the city and create thousands of new jobs.

In Asia, Feinstein has sought to entice major investors and industries to look favorably on San Francisco. She has expressed hope that she will be able to attract several major Japanese companies to set up manufacturing facilities here, thus rebuilding the city’s manufacturing base and creating jobs for blue-collar workers.

Neither, of course, involves building new downtown highrises. But both are entirely consistent with the Pacific Rim strategy — and both will probably do the city a lot more harm than good.

Feinstein’s programs represent an economic theory which has dominated San Francisco policy-making since the end of World War II. In those days, the nation’s economy was based on manufacturing — iron ore from the ground became steel, which became cars, lawn mowers and refrigerators. Raw materials were plentiful and energy was cheap.

By the early 1970s, it was clear that era was coming to a close. Energy was suddenly scarce. Resources were becoming expensive. The economy began to shift gears, looking for ways to make products that used less materials and less energy yet provided the same service to the consumer.

Today, almost everyone has heard of the “information age” — in fact, the term gets used so often that it’s begun to lose its meaning. But it describes a very real phenomenon; Paul Hawken, the author of The Next Economy, calls it “ephemeralization.” What is means is that the U.S. economy is rapidly changing from one based manufacturing goods to one based on processing information and providing services. In the years ahead, the most important raw materials will be ideas; the goal of businesses will be to provide people with useful tools that require the least possible resources to make and the least possible energy to use.

In the information age, large companies will have no need to locate in a central downtown area. The source of new jobs will not be in manufacturing — giant industrial factories will become increasingly automated, or increasingly obsolete. The highways of the nation’s commerce will be telephone lines and microwave satellite communications, not railroads and waterways.

IF SAN FRANCISCO is going to be prepared for the staggering changes the next economy will bring, we might do well to take a lesson from history — to look at how cities have survived major economic changes in the past. Jane Jacobs, the urban economist and historian, suggests some basic criteria.

Cities that have survived and prospered, Jacobs writes, have built economies from the bottom up. They have relied on a large number of small, diverse enterprises, not a few gigantic ones. And they have encouraged business activities that use local resources to replace imports, instead of looking to the outside for capital investment.

A policy that would tie the city’s economic future to the Pentagon and Japanese manufacturing companies is not only out of synch with the future of the city’s economy — it’s out of touch with the present.

In San Francisco today, the only major economic good news comes from the small business sector — from locally owned independent companies with fewer than 20 employees. All of the net new jobs in the city since 1980 have come from such businesses.

Yet, the city’s policy makers — especially the mayor — have consistently denied that fact. As recently as 1985, Feinstein announced that the only reason the city’s economy was “lively and vibrant” was that major downtown corporations were creating 10,000 new jobs a year.

Almost nothing the city has done in the past ten years has been in the interest of small business. In fact, most small business leaders seem to agree that their astounding growth has come largely despite the city’s economic policy, not because of it. That situation shows no signs of changing under the Feinstein administration; the battleship Missouri alone would force the eviction of some 190 thriving small businesses from the Hunters Point shipyard.

San Francisco’s economic problems have not all been the result of city policies. The financial health of the city’s public and private sector is affected by state and federal policies and by national and international economic trends.

Bank of America, for example, is reeling from the inability of Third World countries to repay outstanding loans. Southern Pacific and Crocker National Bank both were victims of takeovers stemming from relaxed federal merger and antitrust policies. In fact, according to Wells Fargo, 21 San Francisco corporations have been bought or merged since 1975. Meanwhile, deep cutbacks in federal and state spending have crippled the city’s ability to repair its infrastructure, improve transit services, build low cost housing and provide other essential services.

To a great extent, those are factors outside the city’s control. They are unpredictable at best — and over the next ten or 20 years, as the nation enters farther into the Information Age, the economic changes with which the city will have to cope will be massive in scale and virtually impossible to predict accurately.

Again, the experiences of the past contain a lesson for the future. On of San Francisco’s main economic weaknesses over the past five years has been its excess reliance on a small number of large corporations in a limited industrial sector — largely finance, insurance and real estate. When those industries took a beating, the shock waves staggered San Francisco.

Meanwhile, the economic good news has come from a different type of business — businesses that were small able to adapt quickly to changes in the economy and numerous and diverse enough that a blow to one industry would not demolish a huge employment base.

But instead of using city policy to encourage that sector of the city’s economy, Feinstein is proposing to bring in more of the type of business that make the city heavily vulnerable to the inevitable economic shocks that will come with the changes of the next 20 years.

THE CANDIDATES who seek to lead the city into the next decade and the next economy will need thoughtful, innovative programs to keep San Francisco from suffering serious economic problems. Those programs should start with a good hard dose of economic reality — a willingness to understand where the city’s strengths and weaknesses are — mixed with a vision for where the city ought to be ten and 20 years down the road.

Thus far, both are largely missing form the mayoral debate.

For years, San Francisco activists and small business leaders have been complaining about the lack of reliable, up-to-date information on the city’s economy and demographics. The environmental impact report on the Downtown Plan — a program adopted in 1985 — was based largely on data collected in 1980. That same data is still used in EIRs prepared by the City Planning Department, and it’s now more than seven years out of date.

In many areas, even seven-year-old data is simply unavailable. Until the Bay Guardian commissioned the Birch studies in 1985 and 1986, the city had no idea where jobs were being created. Until SFRG commissioned the Sedway-Cooke report in 1985, no accurate data existed on the city’s labor pool and the job needs of San Franciscans.

Today, a researcher who wants to know how much of the city’s business tax revenue comes from small business would face a nearly impossible task. That’s just not available. Neither are figures on how much of the city’s residential or commercial property is owned by absentee landlords who live outside the city. If San Francisco were a country, what would its balance of trade be? Do we import more than we export? Without a huge research staff and six months of work, there is no way to answer those questions.

Bruce Lilienthal, chairman of the Mayor’s Small Business Advisory Commission, argues that the city needs to spend whatever money it takes to create a centralized computerized data base — fully accessable to the public — with which such information can be processed and analyzed.

A sound economic policy would combine that sort of information with a clear vision of what sort of city San Francisco could and should become.

What would a progressive, realistic economic development platform look like? We’ve put together a few suggestions that could serve as the outline for candidates who agree with our perspective — and as an agenda for debate for candidates who don’t.

* ADEQUATE AFFORDABLE HOUSING is essential to a healthy city economy, and in the Reagan Era, cities can’t count on federal subsidies to build publicly financed developments. Progressive housing experts around the country agree that, in a city under such intense pressure as San Francisco, building new housing to keep pace with demand will not solve the crisis alone; the city needs to take action to ensure that existing housing is not driven out of the affordable range.

Economist Derek Shearer, a professor at Occidental College in Los Angeles and a former Santa Monica planning commissioner, suggests that municipalities should treat housing as a scarce public resource, and regulate it as a public utility. Rents should be controlled to allow property owners an adequate return on their investment but prevent speculative price-gouging.

Ideally, new housing — and whenever possible, existing housing — should be taken out of the private sector altogether. Traditional government housing projects have had a poor record; a better alternative is to put housing in what is commonly called a land trust.

A land trust is a private, nonprofit corporation that owns property, but allows that property to be used under certain terms and conditions. A housing trust, for example, might allow an individual or family to occupy a home or apartment at a set monthly rate, and to exercise all rights normally vested in a homeowner — except the right to sell for profit. When the occupant voluntarily vacated the property, it would revert back to the trust, and be given to another occupant. The monthly fee would be set so as to retire the cost of building the property over it’s expected life — say, 50 years. Each new occupant would thus not have to pay the interest costs on a new mortgage. That alone, experts say, could cut as much as 707 off the cost of a home or apartment.

* DEVELOPMENT DECISIONS should be made on the basis of community needs. A developer who promises to provide jobs for San Franciscans should first be required to demonstrate that the jobs offered by project will meet the needs of unemployed residents of the city. Development fees and taxes should fully and accurately reflect the additional costs the project places on city services and infrastructure.

Land use and development decisions should also be geared toward meeting the needs of small, locally owned businesses — encouraging new start-ups and aiding the expansion of existing small firms.

* ECONOMIC DEVELOPMENT programs should encourage local firms to use local resources in developing products and services that bring revenue and wealth into the city instead of sending it to outside absentee owners and that encourage economic self-sufficiency.

Cities have a wide variety of options in pursuing this sort of goal. City contracts, for example, should whenever possible favor locally owned firms and firms that employ local residents and use local resources. Instead of just encouraging sculptured towers and flagpoles on buildings, city planning policies should encourage solar panels that decrease energy imports, rooftop gardens that cut down on food imports and utilize recycled materials that otherwise would become part of the city’s garbage problem. (Using recycled materials is by no means a trivial option; if all of the aluminum thrown away each year in San Francisco were recycled, it would produce more usable aluminum than a small-to-medium sized bauxite mine.)

Other cities have found numerous ways to use creative city policies to encourage local enterprise. In Minneapolis-St. Paul, for example an economic development agency asked the U.S. Patent Office for a list of all the patents issued in the past ten years to people with addresses in the Twin Cities area. The agency contacted those people — there were about 20 — and found that all but one had never made commercial use of the patents, largely for lack of resources. With the agency as a limited partner providing venture capital, more than half the patent owners started businesses that were still growing and expanding five years later. Some of those firms had actually outgrown their urban locations and moved to larger facilities out of town — but since the Twin Cities public development agency had provided the venture capital, it remained a limited partner and the public treasury continued to reap benefits from the profits of the businesses that had left town.

* CITY RESOURCES should be used to maximize budget revenues. For example, San Francisco currently owns a major hydroelectric power generating facility at Hetch Hetchy in Yosemite National Park. A federal law still on the books requires San Francisco to use that facility to generate low-cost public power for its citizens; that law, the Raker Act, has been honored only in the breach. That means every year PG&E takes millions of dollars in profits out of San Francisco (the company is based here, but very few of its major stockholders are San Franciscans). The last time we checked, San Francisco was losing $150 million (CHECK) in city revenue by failing to enforce the Raker Act and municipalize its electric utility system.

Meanwhile, PG&E continues to use city streets and public right-of-ways for its transmission cables at a bargain-basement franchise fee passes in 1932 and never seriously challenged. Other highly profitable private entities, like Viacom cable television, use public property for private purposes and pay highly favorable rates for the right.

Those ideas should be the a starting point, not a conclusion for mayoral debates. But thus far, we’ve seen precious little consideration of the issues, much less concrete solutions, from any of the candidates.

The mayor’s race, however, is still very much open, and the candidates are sensitive to public opinion. If the voters let the candidates know that we want to hear their visions of the city’s economic future — and their plans for carrying those visions out — we may see some productive and useful discussions yet.*

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