Volume 42 Number 16

January 16 – January 22, 2008

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Some progress on UC extension


EDITORIAL There’s progress to report on the development deal for the old University of California Extension campus. Sup. Ross Mirkarimi, whose district borders the project, has been holding meetings with all of the players, State Sen. Carole Migden has been putting pressure on the UC and the developer, and as of press time, it appears that the level of affordable housing could be increased from 16 percent to more than 30 percent.

The project still isn’t perfect, and there are still plenty of details to work out. (Among other things, it appears that the developer may not get permission to demolish two historic buildings — some recent court decisions suggest that historic structures can be torn down only if there’s no other alternative, and city documents show that a preservation alternative is feasible.) And as of press time, the developer, A.F. Evans, and Openhouse, the nonprofit that wants to dedicate part of the project to housing for queer seniors, were still at odds over some issues.

But by far the biggest problem with this 420-unit project was the lack of affordable housing — it was mostly rental units for rich people and retirement units for rich retirees — and that seems to be shifting. The Mayor’s Office of Housing has agreed to take over the 80 Openhouse units and make 100 percent of them affordable. (The definition will, of course, need to be negotiated — there are plenty of queer seniors, particular those on disability, who won’t be able to pay what the city often considers "affordable," and it’s important that some units be set aside for very-low-income people.)

But overall, a project that was utterly unacceptable is now looking a whole lot better. There’s a lesson here, of course: Before Mirkarimi and Migden got involved, the developer and the UC (which owns the land) were insisting that they couldn’t budge an inch on the level of affordable housing. But when it became clear that the project might not go forward, they came to the table. We have to wonder how many other projects that the city has approved could have been far better if city planners were willing to take a tougher line from the start.

This could still explode at any moment, but for now it’s moving in the right direction.

A no-new-cuts budget


EDITORIAL It’s time for Democrats in Sacramento to show some political courage. Gov. Arnold Schwarzenegger has thrown down the gauntlet, offering a budget plan that isn’t just brutal and wrong — it’s a train wreck, a catastrophe that would devastate public education, parks, and basic services in California for years to come. The Democrats need to publicly declare this dead on arrival and offer an alternative plan that closes most of the $14 billion deficit with new taxes.

The budget deficit is serious business: it represents more than 10 percent of the state budget, and, after a series of tough years that have left California in debt, it’s not going to be easy to eliminate. And we recognize that Schwarzenegger is serious about across-the-board cuts — he’s willing to eliminate 6,000 jobs from the bloated prison system and let 22,000 inmates out early. That’s long overdue, and those savings can be incorporated in any final plan.

But slicing the education budget by $4 billion is insane. We’re not just talking about government employees losing their jobs or reducing bureaucratic overhead — this is about threatening the future of a generation of California kids. Those kinds of cuts — which absolutely will translate into a loss of teachers, school closures, and the end of music, art, and science programs — aren’t just one-year measures that can be repaired later. These are deep reductions in the state’s commitment to educating children who can’t afford private schools — and those kids will suffer for years.

Closing parks, cutting social programs, and eviscerating aid to cities — which will mean another round of cuts at the local level — would do serious damage to California. And none of it is necessary.

The governor’s pledge not to raise taxes demonstrates that, for all his talk of bipartisanship, at heart he’s a George W. Bush Republican. Cutting state spending at this level as the nation heads into a recession is insane; all the governor’s plan would do is drive the economy further into the tank, destroy more jobs, and reduce tax revenue, making next year’s problem even worse.

Think about it for a second: just restoring the vehicle license fee, which is a modest tax on car ownership, would bring in more than $4 billion, enough to save public education.

The richest Californians have done very well under the Bush tax cuts. And the deficits that those tax cuts created are part of California’s budget problem. Even increasing state income taxes slightly on those very-high-wage earners would bring in as much as $3 billion, according to the California Tax Reform Association — and since the rich can deduct state taxes from their federal payments, this would ultimately be a way to transfer money from Washington DC back to California.

That state’s sales tax code is still stuck in another era, and all sorts of things defined as services don’t get taxed at all — even though, according to the CTRA, "many ‘services’ are actually the temporary use of tangible commodities, such as admission to sporting events, ski resorts, golf courses, amusement parks, gyms and concerts, and should be in the tax base." Fixing that problem would bring in another $4 billion.

In other words, a few modest changes in the tax laws that would affect only the rich and those with excess disposable income would solve the budget deficit without cutting any services at all (except prisons, which need to be cut anyway). And that’s without even addressing the regressive mess that is Proposition 13.

A revenue-based solution would also prevent a deep hit to the economy, because shifting money from the very rich (who don’t tend to spend their marginal dollars) to the poor (who tend to put every new dollar right into the economy) is always a source of economic stimulus.

The Democratic leadership knows this. Most of the rank-and-file Democrats in the State Legislature know this. It’s not rocket science. But politicians in California are terrified of raising taxes — but in 2008 they have to get over it. It’s the responsibility of the Democratic leadership to educate the public about the real choices here, the real economics, the real stakes — and the only humane, credible solutions. If they cower in fear and cave in to the governor now, it’s hard to imagine when they will ever be able to take a stand.

The great escape


› gwschulz@sfbg.com

There are some dark clouds hovering over City College of San Francisco. The District Attorney’s Office is investigating political corruption allegations, a long-awaited audit of half a billion dollars in bond spending is just months from completion, and several infrastructure projects are running tens of millions of dollars over budget.

But Chancellor Phil Day won’t be around to clean up those messes. He’s leaving City College for a new job on the East Coast at the National Association of Student Financial Aid Administrators as early as March 1.

Day’s announcement came just weeks before the school’s Board of Trustees Jan. 10 unveiling of the results of an internal investigation into who knew what about City College money from taxpayers being diverted to an election campaign committee that should have operated entirely independently of the school.

The investigation concludes that there was no evidence that contractors made donations to a campaign committee formed by the school’s leadership in exchange for favorable business arrangements.

But the report does confirm that two lower-level bureaucrats, Stephen Herman and James Blomquist, instructed business tenants who used school facilities — the coffer vendor Bean Scene and Bay Area Motorcycle Training — to sign rent checks over to the committee instead of to the school. Neither tenant appeared to have any intention of contributing to the committee.

The timing of the checks is also questionable. The school returned the Bean Scene’s $20,000 rent check shortly after recognizing a potential violation of the state’s Education Code, which prohibits using school funds for electioneering purposes. But officials then violated the same provision when a $10,000 rent check from the motorcycle-training outfit wasn’t returned to public coffers until a year and a half later, when the San Francisco Chronicle‘s Lance Williams began snooping around.

"The fact that an apparent misuse of public funds could be discovered, corrected, and then occur again after such a short period reveals a glaring lack of oversight of the College’s involvement in fundraising from College contractors, literally from start to finish during the campaign," the report states.

City College’s trustees and school administrators created the Committee to Support Our City College in 2005 as a campaign vehicle for convincing voters to authorize $246 million in bond projects, the third such bond election for City College in a decade.

The report’s executive summary in part downplays the significance of the Chron stories from last April that inspired the probe in the first place. Rather, it implies that the fund diversions had more to do with a poor accounting system and an 11th-hour decision to rush the bond election to voters with minimum preparation.

It’s not clear how the report will impact a DA’s investigation of the campaign committee related to the same allegations. The Guardian revealed last summer (see "Day’s Dilemma," 8/8/07) that just days before the November 2005 election, Kamala Harris’s office also requested documents stemming from the college’s $8.7 million purchase of land in Chinatown that the county determined was worth only $1.7 million for tax purposes.

We also reported that City College’s half a billion dollars in infrastructure improvements are running approximately $225 million over budget and as a result, the school has gutted projects promised to voters and reallocated about $130 million in order to sustain others (see "The City College Shell Game," 7/4/07). An expansive management audit of the school’s bond spending is due in June.

In a prepared statement, Day insists the fund diversions were an accident, and he complains that if the San Francisco Ethics Commission had notified it of the mistake sooner, the school would have corrected it. The Guardian reported that the Ethics Commission had known the Bay Area Motorcycle Training check was illegally used by the committee but waited for more than a year to notify the state’s Fair Political Practices Commission of a possible elections law violation (see "At the Crossroads," 7/18/07).

"As the chancellor and CEO of this college, I take responsibility for these mistakes," Day’s statement reads. "However, it is important to understand that these mistakes occurred innocently and inadvertently, and as soon as we learned of them, we took immediate action to rectify them."

An exasperated Day, who became City College’s chancellor in 1998, said in a phone interview that he didn’t believe the school’s troubles would make it difficult for his successor to return to the ballot and get voters to approve bond projects they’ve already partially paid for, including a stem-cell technology training center.

"I don’t feel like I’m leaving someone with disarray," Day told us. "It’s the people in the institution that sometimes make mistakes, not the institution itself."

Day’s departure also comes as a building inspector hired by the school in 2003 alleges in a federal lawsuit that he was wrongfully terminated last summer for blowing the whistle on illegal building code violations and for making safety complaints during facility renovations. The suit was filed Dec. 24, 2007.

Plaintiff Lawrence Lauser contends that he’d repeatedly informed his bosses at City College that building codes were being violated during construction work, but there was no willingness to fix them.

Instead of being outright fired, Lauser alleges, he was told the work had run out. "That was a complete sham," his attorney, Frank Sarro, said. "There wasn’t a lack of work at all." Lauser is also suing his union, the United Brotherhood of Carpenters and Joiners Local 22, for refusing to request arbitration with the school on his behalf.

"He just had a strong feeling that things should be done by the book," Sarro said of Lauser. "And his bosses didn’t want to hear it."