Budget

Budget looks: Buy it, bejewel it, fix it, wear it, do it

Jesse Hawthorne Ficks
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Budget looks: Buy it, bejewel it, fix it, wear it, do it

By Chhavi Nanda

The dismal economy may be prompting us to keep our wallets shut, but it can’t curb our fashion obsession. Widespread job losses, declines in personal income, declines in real GDP — we’re still managing to look fabulous and sharp. The only difference now? We’re on a budget. Here are three ways to spruce up your look without breaking that cute little piggy bank. (Hint: find a way to wear it.)


Task #1: We have to get an outfit together for less than $20, all items collected from a thrift store. I headed to Thrift Town (2101 Mission, SF. 415-861-1132, www.thrifttown.com), in the Mission.
Dress: $5.99
Shoes: $3.00
Vest: $3.99
Belt: $1.50
Grand Total: $14.48

 

Task #2:   I was approached with the issue,  ” I have so many accessories, but nothing to wear them with. I only have $5.00. Help!” My response was, ” Of course.” Again, we headed to Thrift Town, picked out a dress that was perfect for the client’s body type, personal style, and wallet.
Dress: $2.99
add your own accessories

 

Task #3:  You may have found that almost-perfect dress with a great print and fit, but there’s just something off about it. It’s easy to nonprofessionally alter a dress to achieve the fit and shape you desire. Once again at Thrift Town, I found this dress, but there was something awkward about the shape of it. All we did was tie it around the client’s body, as if it were a wrap dress, and voila! The makeover is complete, for a recession friendly bargain of $5.99.
Dress: $5.99
Get creative!

Awkward!

So much better!

Ammiano reviving Prop. 13 reform

Zelda Bronstein
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Ammiano reviving Prop. 13 reform

Assemblymember Tom Ammiano is trying to put property-tax reform back on the California agenda. He’s introducing a measure that would call for taxing commercial and residential property at different rates — which would involve a significant change to Prop. 13. It’s been tried before, and big business interests have always managed to shoot it down, but as Ammiano puts it, these are different times:

“For over thirty years, Proposition 13 has allowed corporate landowners to benefit from tax loopholes while shifting the real tax burden to individual homeowners and reducing California’s tax base. “We cannot continue to cut funding from our schools, our parks and our vital human services without addressing the need for new revenue and an equitable tax system.  Reforming Proposition 13 will not solve all of the state’s budget problems but it’s a crucial step in the right direction.”

 It’s not exactly clear at this point what form the legislation will take; it might be a resolution followed by a Constitutional amendment. And I don’t think even Ammiano believes that both houses of the Legislature will happily vote to make big commercial property owners pay their fair share of the state’s tax burden. But it’s worth talking about, worth pushing, worth reminding people that one of the reasons the state is so broke is that the property tax system is frozen in time, a legacy of a very different era in California.For over thirty years, Proposition 13 has allowed corporate landowners to benefit from tax loopholes while shifting the real tax burden to individual homeowners and reducing California‘s tax base.  We cannot continue to cut funding from our schools, our parks and our vital human services without addressing the need for new revenue and an equitable tax system.  Reforming Proposition 13 will not solve all of the state’s budget problems but it’s a crucial step in the right direction.”

 

And a split roll is probably the only way to amend Prop. 13 at this point, since so many homeowners are so happy with it.

 

Labor’s love lost

Andrew Lam
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4
Labor’s love lost

Note: This file has been corrected from an earlier version.

rebeccab@sfbg.com

Two recent events could have major implications for Service Employees International Union Local 1021 — San Francisco’s largest public-sector union and an important ally for progressives — for better or for worse. And this union’s fate seems closely tied to that of the progressive movement in San Francisco.

The first event was likened to a “nuclear bomb in the morning paper” by one observer, and might be interpreted as the kickoff to a fierce budget battle. Mayor Gavin Newsom announced that he is considering a plan to help solve next year’s budget deficit by laying off 10,000 full-time city workers and rehiring them at 37.5 hours, which would amount to a sweeping 6.25 percent pay cut for workers and an estimated $50 million in savings for a fiscally impaired city.

Though it was framed by Newsom spokesperson Tony Winnicker as one preliminary cost-saving option among many, the proposal received prominent front-page coverage in the San Francisco Chronicle, even before official discussions were called between the mayor and public sector unions. Since SEIU Local 1021 represents 17,000 members in San Francisco and a majority of the city’s 26,000 total employees, it would likely absorb the greatest impact if such a plan went through.

At the same time the mayor’s startling announcement hit newsstands, SEIU was in the midst of mailing out ballots to its membership for union elections. “I don’t know whether it’s a coincidence, or if the city is taking advantage of the fact that SEIU is absorbed in its elections,” Sin Yee Poon, an SEIU chapter president for Human Services Agency workers, told us while pointing out that the events happened simultaneously.

With three separate slates of candidates vying for control of SEIU Local 1021, grudges between warring internal factions have intensified into bitter sparring matches. The timing is unfortunate — just as SEIU’s internal turmoil is coming to a head, one of its greatest battles is pending over an unprecedented $522 million budget shortfall that looms like a dark cloud over the city. The deficit will surely result in job losses, and the public sector union’s ability to mount resistance even as it wrestles with internal strife is shaping up to be a key question.

This pivotal moment carries wider political implications considering that the progressive organization has in the past helped seal an alliance between San Francisco’s left-leaning leaders and organized labor through the San Francisco Labor Council.

With SEIU besieged by infighting and soon to be hurting from wage slashes and layoffs, more conservative factions of the labor community, such as the San Francisco Firefighters Union and the Building and Construction Trades Council, have recently been butting heads with progressive members of the Board of Supervisors.

At the same time, forces on all sides are beginning to eye the coveted seats up for election in June at the Democratic County Central Committee, a Democratic Party hub that is a cornerstone of local political influence, as well as the seats that will open up on the Board of Supervisors in November. Negotiations between unions and the mayor are ongoing, and mayoral spokesperson Tony Winnicker was quick to note that Newsom is open to options, other than reconfiguring 10,000 city jobs, that organized labor brings to the table. At the same time, the Guardian heard from numerous sources that city workers felt outraged and blindsided by Newsom’s decision to air the plan in the Chronicle instead of bringing stakeholders to the table.

SEIU Local 1021 President Damita Davis-Howard told us she thinks the idea of taking $50 million out of the pockets of working people in a rocky economy is wrong-headed.

“This was devastating,” said Davis-Howard, who is running for a newly created union position called chief elected officer, which is different from the union president, and similar to an executive-director post. “The mayor might as well have raised their taxes, because if you decrease their pay by 6.25 percent, they will still have the same amount of work, they will still have to pay the same mortgage, they will still have to buy the same food, the same PG&E, and they’ll be doing it with a lot less money. If any idea like this were to go through, it would actually remove the very fabric or fiber of San Francisco. It would really cut to the core of the very being of San Francisco. … I don’t see how anybody could believe that we could continue being the city that we love being with this kind of action.”

Winnicker, the mayoral spokesperson, cast it as a plan that could avert hundreds or even thousands of layoffs. “This year the easy decisions are behind us,” he noted in a recent discussion with the Guardian.

Solving last year’s fiscal shortfall was far from easy — budget tussles between frontline city workers and the mayor got ugly, and even then, the city received millions in federal stimulus dollars to cushion the blow. A similar plan of sweeping hourly cuts was floated then too, but it didn’t gain enough traction to move forward.

“The mayor is facing a huge budget deficit, there’s no question about it — but he has not lifted one finger to raise a dime in revenue,” charged SEIU member Ed Kinchley, who works at San Francisco General Hospital. As for how the union might respond if such a proposal went through, he speculated, “I think it’s the kind of thing that could lead to a strike. A big fight.”

While the city charter bars strikes by public employees, Kinchley’s comment indicates the level of frustration among SEIU’s rank-and-file.

 

 

The proposal could present a common enemy and a rallying point for a union in disarray. Internal jockeying for elected positions can be fierce in any organization, but for San Francisco’s service-workers union, the rifts are particularly deep.

The elections, which will be decided Feb. 28, mark the first time since a radical restructuring in 2007 that members will collectively decide who should lead. In 2007, the face of SEIU was changed across California when the international president, Andy Stern, began consolidating dozens of far-flung locals into centralized, beefier entities in a bid to maximize political effectiveness (California comprises roughly one-third of the entire union’s membership).

Local 1021 came into existence when 10 locals were conglomerated into one 54,000-member giant — hence the “10-to-one” label — representing health care and frontline service workers from the Bay Area to the Oregon border. 

In San Francisco, where a large segment of its members are based, the shift was interpreted by some as a power grab, and it triggered a period of ongoing strife between those allied with Stern and the international wing on one side, and those dissatisfied with changes they saw as antithetical to the democratic ideals championed by Local 790, its predecessor, on the other.

In the years following the reorganization, Stern began trying to aggregate members by raiding other unions to consolidate power. But campaigns to bring in members from United Healthcare Workers (UHW) and fend off membership losses to the newly created National Union of Healthcare Workers (NUHW) have consumed money and resources that some members told the Guardian would’ve been better spent bolstering national support for health-care reform and the Employee Free Choice Act. According to one source, SEIU spent $10 million on a Fresno battle against NUHW.*

A fight waged between SEIU Local 1021 and UNITE HERE Local 2, a hotel-workers union that was historically allied with Local 1021’s predecessor, left some members especially stung because it marred a longstanding relationship between two groups of frontline workers.

“Andy Stern has concentrated more and more power into the hands of a group of so-called elite members of the union,” Kinchley told the Guardian. Stern’s top-down leadership style and growth-oriented objectives “run pretty harshly against what many of us believe is in the best interest of our workers locally,” he added.

In recent weeks, divisions have deepened further. A staff person who preferred not to be identified for fear of retribution filed charges with the U.S. Department of Labor against a supervisor, who is aligned with the international faction, for alleged harassment and bullying. Another complaint was filed with union leadership alleging that union bylaws were violated when membership money was authorized, but not spent, to conduct a poll without proper approval.*

“There’s a fiscal rogue-ness about it. [Davis-Howard] does whatever she wants, and she spends our dues money without authorization from anybody,” Kinchley charged.

Stern appointed Davis-Howard, and now she is running for election on a slate aligned with the international wing. When the Guardian tried to reach her to discuss union elections, spokesperson Carlos Rivera told us that Davis-Howard found it inappropriate to publicly discuss internal divisions.

Sin Yee Poon is running as her opponent on a reform slate, formed by members disaffected by the international’s modus operandi. “For the whole reform group, we’re disappointed with the general direction of corporate unionism,” Poon told the Guardian. Stressing that she believes grassroots, democratic ideals have eroded since the restructuring, she said members in her camp are agitated when they see resources siphoned into raids on other unions such as UNITE HERE and UHW. “We want it to be member-driven,” she said. “The raiding of other unions is absolutely not OK.”

 

 

The internal strife could have a wider ripple effect. SEIU Local 1021 has historically been influential in securing an alliance between the city’s labor community and San Francisco’s progressive leadership. During the last round of elections for San Francisco’s Board of Supervisors, Sups. John Avalos and Eric Mar campaigned and ultimately were elected with strong fundraising support from the labor council.

Yet in recent weeks, several skirmishes pitted certain factions of the labor community against progressive members of the Board of Supervisors. Outrage bubbled up from the firefighters — and ultimately the labor council as a whole — against a charter amendment proposed by Sup. John Avalos that would have extended the minimum number of work hours for firefighters.

Billed as a cost-saving measure, the proposal might have ultimately resulted in fewer firefighter jobs, but it was designed to spread the pain of budget cuts more equitably by grazing public safety departments instead of just inflicting blows on frontline and healthcare workers.

After Labor Council Executive Director Tim Paulson came out strongly against it, Avalos abandoned the idea. A source from within the labor council, who spoke on background only, described it as an opportunity for the labor council to come together and unite on class interests.

The political posturing that came out of that fight shook even Sup. David Campos, who vocally called for equitably sharing the pain during last year’s budget debacle. “This isn’t the way to do it,” Campos said when asked about Avalos’ failed charter amendment. “And I worry about the negative impact on labor and the progressive board. There are larger issues at play here. The entire progressive agenda is at stake. We need to think long-term about the specific issues plus the future of the progressive movement.”

Sup. Sean Elsbernd’s bid to reform the pension system to save money has provoked yet another fight with SEIU Local 1021. Union members argue that if they are asked to contribute to their own retirement funds, which would become mandatory under this proposal, then they should be given the same wage increase that other unions were granted when they agreed to similar terms.

But when Sup. Eric Mar tried to amend Elsbernd’s proposal by inserting language guaranteeing that pay increase, Elsbernd said it would cost the city millions more. If Mar’s amended version goes forward, “you’ll be going to the voters by yourself,” Elsbernd told the progressive-leaning supervisor at a Feb. 9 board meeting.

 

 

Another fight has erupted over 555 Washington, a tower proposed to go up beside the TransAmerica Pyramid, which was debated at a joint hearing Feb. 11 between the Planning Commission and the Recreation and Park Commission. For members of the Building & Construction Trades Council, which represents unionized carpenters, plumbers, and other workers in development-related trades, the project represented jobs — the screaming priority in an economy where funding for new construction has trickled to almost nil.

“There is, in general in San Francisco progressive politicians, a knee-jerk reaction to development projects,” Building & Trades Council Secretary Treasurer Michael Theriault told us. As a council representing people whose livelihoods depend on private sector construction, “We have a particular quandary,” he said. “We need politicians who at the same time are friendly to labor and understand that development is an economic tool that can help the city.”

The arm of labor representing Theriault’s council has been slammed with job losses due to the economic downturn, and he’s publicly expressed frustration when projects of this scale are shot down.

“What the mayor did, what Elsbernd did, and what Avalos did are all the same thing: They all staked out a position, put a provocative idea on the table, and forced unions to have a discussion with a gun to their head in a non-constructive way,” Mike Casey, president of UNITE HERE Local 2 and a member of the labor council’s Executive Committee.

A source familiar with the inner workings of the labor council said the tension between building trades and firefighters versus more left-leaning members of the labor community has been in existence for decades, and it isn’t anything new — particularly in the months preceding election season.

Casey challenged the very notion that there is a subculture of the labor council that isn’t progressive, pointing out that labor came together as whole to support Sups. Avalos, Mar, and David Chiu — “and I personally would do it again in a heartbeat,” he added. Internal catfights and struggles for control come with the territory in a democratic, diverse organization, he said. “As a group of working people, I have great regard for the membership [of SEIU Local 1021],” he said. “Occasionally there’s a dustup. In my experience, after the dust settles, more often that not, unions come out stronger for it.”.

*Corrections made to the original file.

Editorial: How to create jobs in San Francisco

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If Newsom decides to solve the city’s $520 million deficit with cuts alone, he will be taking more than $1 billion out of the local gross domestic product

EDITORIAL If Mayor Gavin Newsom is serious about stimulating the San Francisco economy, he ought to start with a basic number that the city’s own economist, Ted Egan, passed along to us this week. The number is 2.11 — and Egan says that’s the multiplier effect of cuts in local public spending.
In other words, every dollar Newsom cuts from the city budget has a ripple effect of taking $2.11 out of the San Francisco economy. Which means that if the mayor decides to solve the city’s $520 million deficit with cuts alone, he’ll be taking more than $1 billion out of the local gross domestic product.
And that, in a nutshell, is the problem with the mayor’s economic stimulus package: it’s entirely aimed at the private sector, with no regard for how it will hit public spending.
A dose of reality here — public-sector jobs are also jobs. People who work in the public sector pay rent and mortgages and buy clothes and food for their kids and go shopping in local stores and go to local clubs and restaurants and pay taxes — and have the same economic impacts on the economy as private-sector workers. If you lay off nurses and recreation directors, those people stop spending money in town, and you continue the vicious cycle that has made this recession so deep and painful.
And if your entire economic stimulus program is aimed at cutting private sector taxes, it’s going to lead to public sector job losses. And those losses will undermine much of the impact of any gains you might get from private sector job growth.
Egan predicts that Newsom’s program of eliminating the payroll tax for new hires would create 4,330 new jobs in the city. We find that something of a stretch — it’s hard to imagine how any struggling small business would find eliminating a small tax enough reason to hire a new worker, and small businesses provide the vast majority of the private-sector jobs in San Francisco. But even if it’s accurate, it’s a fairly tiny gain. The city’s lost more than 35,000 jobs since 2007, and when the economy rebounds in the next two years, Egan predicts about 20,000 new jobs in the city even without the stimulus.
Egan also acknowledged to us last year that “the consensus among economists is that most of the time government spending stimulates the economy more” [than tax cuts].”
That’s particularly true in a city where the largest employers are all in the public sector (see opinion piece this page).
If the mayor and the supervisors actually want to create jobs in San Francisco, there are plenty of things they can do — starting with finding ways to close as much of the budget gap as possible without layoffs. Here are some possible approaches.
• Put a major revenue measure on the November ballot that saves city jobs without costing private sector jobs. There are several ways to do this, but all of them start with the well-demonstrated concept that transferring wealth from the rich to the poor and middle-class — that is, giving money to people most likely to spend it — is good for job creation. One option: shift the payroll tax to a gross receipts tax and charge bigger companies a higher rate. Another: a commuter tax on income earned above $50,000 a year would charge wealthier people who use city services and don’t pay for them.
• Issue infrastructure bonds. The notion that cities can’t borrow money the way the federal government does to fund economic stimulus programs is just wrong. San Francisco can sell bonds for a wide range of projects, from affordable housing to alternative energy projects to public works programs that are badly needed and could put San Franciscans directly to work. But it can’t be small-time projects; to make a difference, direct stimulus needs to be big, perhaps $1 billion. San Francisco’s property owners, who ultimately are on the hook for the bonds, are by and large (thanks to Prop. 13) entirely able to handle more payments.
• Lend more money to small businesses. The biggest obstacle to small business hiring isn’t taxes but a lack of credit. The $73 million Newsom is going to spend on tax cuts would create far more jobs as part of a city-sponsored microloan fund. Newsom’s efforts on that front are still very small scale.
There’s so much more the city can do — but cutting taxes and losing city jobs is the wrong way to turn around the economy.

MTA works on deep Muni service cuts

Sasha Cuttler
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0

By Nima Maghame

San Francisco Municipal Transportation Agency, which operates Muni, has pushed back a City Hall meeting (originally set for today) to make a decision on budget-related plans for cutting transit services by 10 percent across the city and raising prices on monthly passes, setting it for Friday 26th at 9 a.m. instead.

The proposal seeks “a savings of 313,000 annual service hours, which would result in $4.8 million in savings for the fiscal year 2010. The annual savings would be $28.5 million.”

At the Feb. 8 meeting, where the MTA formally announced its new plans, representatives from disability and senior citizen communities voiced their frustrations with the monthly pass price increase. Both groups not only rely on public transportation to get around the city, but many are members of organizations that subsidize passes for those in need. Many of these organizations can’t budget the new price hikes, which could mean that people who depend on these hand-outs may not get them.

“The people of San Francisco need transit. We were there to stop the MTA — 99 percent of the people at the meeting were there to say don’t cut services, don’t cut rates, there are other ways,” Forrest Schmidt, an organizer for the ANSWER Coalition, told us.

The 10 percent cut in service would hit the residents of Treasure Island hard because many rely on buses to get on and off the island. Several came to the meeting to voice their Muni needs and point out that the 108 bus is the only alternative to driving a car. They criticized MTA calculations that determine the appropriate amount of service that can be cut without causing too many problems for commuters.

“Alternative means don’t exist when you live on Treasure Island. They have to acknowledge that we have unique factors,” Treasure Island resident and art student Drew Williams said at the meeting.

The MTA board heard the plea, MTA spokesperson Judson True told us: “The board has decided to reevaluate their plans for the 108 line.” It was one of several factors that has caused the MTA board of delay its budget decisions.

Critics are infuriated at the MTA for not taking a proactive approach at dealing with its fiscal challenges. “It’s a damn shame it came to this. The severity was not predictable but the deficit was predictable,” said longtime transportation activist Dave Snyder, who recently formed a new transit riders union to advocate on behalf of Muni riders. “The revenue panel met a couple of years ago and the MTA declined all their recommendations.”

 

How to create jobs in SF

David Talbot
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10
How to create jobs in SF

EDITORIAL If Mayor Gavin Newsom is serious about stimulating the San Francisco economy, he ought to start with a basic number that the city’s own economist, Ted Egan, passed along to us this week. The number is 2.11 — and Egan says that’s the multiplier effect of cuts in local public spending.

In other words, every dollar Newsom cuts from the city budget has a ripple effect of taking $2.11 out of the San Francisco economy. Which means that if the mayor decides to solve the city’s $520 million deficit with cuts alone, he’ll be taking more than $1 billion out of the local gross domestic product.

And that, in a nutshell, is the problem with the mayor’s economic stimulus package: it’s entirely aimed at the private sector, with no regard for how it will hit public spending.

A dose of reality here — public-sector jobs are also jobs. People who work in the public sector pay rent and mortgages and buy clothes and food for their kids and go shopping in local stores and go to local clubs and restaurants and pay taxes — and have the same economic impacts on the economy as private-sector workers. If you lay off nurses and recreation directors, those people stop spending money in town, and you continue the vicious cycle that has made this recession so deep and painful.

And if your entire economic stimulus program is aimed at cutting private sector taxes, it’s going to lead to public sector job losses. And those losses will undermine much of the impact of any gains you might get from private sector job growth.

Egan predicts that Newsom’s program of eliminating the payroll tax for new hires would create 4,330 new jobs in the city. We find that something of a stretch — it’s hard to imagine how any struggling small business would find eliminating a small tax enough reason to hire a new worker, and small businesses provide the vast majority of the private-sector jobs in San Francisco. But even if it’s accurate, it’s a fairly tiny gain. The city’s lost more than 35,000 jobs since 2007, and when the economy rebounds in the next two years, Egan predicts about 20,000 new jobs in the city even without the stimulus.

Egan also acknowledged to us last year that “the consensus among economists is that most of the time government spending stimulates the economy more” [than tax cuts].”

That’s particularly true in a city where the largest employers are all in the public sector (see opinion piece this page).

If the mayor and the supervisors actually want to create jobs in San Francisco, there are plenty of things they can do — starting with finding ways to close as much of the budget gap as possible without layoffs. Here are some possible approaches.

• Put a major revenue measure on the November ballot that saves city jobs without costing private sector jobs. There are several ways to do this, but all of them start with the well-demonstrated concept that transferring wealth from the rich to the poor and middle-class — that is, giving money to people most likely to spend it — is good for job creation. One option: shift the payroll tax to a gross receipts tax and charge bigger companies a higher rate. Another: a commuter tax on income earned above $50,000 a year would charge wealthier people who use city services and don’t pay for them.

• Issue infrastructure bonds. The notion that cities can’t borrow money the way the federal government does to fund economic stimulus programs is just wrong. San Francisco can sell bonds for a wide range of projects, from affordable housing to alternative energy projects to public works programs that are badly needed and could put San Franciscans directly to work. But it can’t be small-time projects; to make a difference, direct stimulus needs to be big, perhaps $1 billion. San Francisco’s property owners, who ultimately are on the hook for the bonds, are by and large (thanks to Prop. 13) entirely able to handle more payments.

• Lend more money to small businesses. The biggest obstacle to small business hiring isn’t taxes but a lack of credit. The $73 million Newsom is going to spend on tax cuts would create far more jobs as part of a city-sponsored microloan fund. Newsom’s efforts on that front are still very small scale.

There’s so much more the city can do — but cutting taxes and losing city jobs is the wrong way to turn around the economy.

 

Editor’s Notes

David Talbot
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Editor’s Notes

Tredmond@sfbg.com

I have been watching and listening to the Meg Whitman for Governor ads, and they all seem to have the same basic message, one we’ve heard many times before from rich former executives wanting to get into politics. Whitman thinks that her experience in private business will make her a good governor, that she can run the state the same way she ran eBay.

Her policy proposals are horrible (just check out what she wants to do to the schools and how she plans to cut the state workforce by 40,000 people, a brilliant move in a recession). But beyond that, there’s a serious disconnect here.

See, California isn’t a business. And private-sector training, private-sector models, and private-sector management don’t translate very well.

At eBay, Whitman’s goal was to make money for shareholders. The idea was to expand markets, grow market share, increase revenue, and keep expenses low enough that at the end of the year, there’s a nice profit left over. Not to go all Marxist or anything, but you had to pay every employee a bit less than actual value of their work; that’s how investors make money.

California is — at best — a nonprofit, and even that model doesn’t directly apply. Forget the political skills it takes to work with the Legislature and thousands of interest groups and stakeholders. Just consider the basic economics.

The state doesn’t exist to make money, but to provide public services. Fiscal prudence may be necessary to keep things afloat, but it’s not the point. As the late, great David Brower used to say, any environmental group that isn’t busting its budget, isn’t doing enough work. Revenue doesn’t exist to pay dividends, or even big salaries. In a well-run state, just about every dollar that comes in gets spent. And many of the outcomes — the results that CEOs are always looking for — can’t be easily quantified, certainly not in the short term. (Spend an extra $20 billion on public education and you’ll definitely get better schools — but you might not get better test scores, certainly not for the first few years.)

There’s a reason that CEOs don’t tend to do well in politics. It’s a different game.

 

Newsom’s $72 million corporate giveaway

Sasha Cuttler
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1
Newsom’s $72 million corporate giveaway

City economist Ted Egan yesterday released his analysis of the payroll tax exemption for new hires that Mayor Gavin Newsom has proposed, one of several business tax cut proposals that we discuss in this week’s Guardian. Egan estimates that the net revenue loss (which takes into account taxes paid by the new hires) to the city would be $72 million over the next two years.

“The proposed policy will have a strong positive effect on local hiring, albeit at a steep costs the City’s General Fund,” Egan wrote, later adding, “The policy would also make the City’s serious current budget deficit worse, and likely lead to significant employment reductions in the City’s workforce.”

While the tax breaks amount to only about 1 percent of businesses’ payroll costs, Egan’s models predict they would spur the creation of 4,330 jobs, or about 5 percent of the jobs lost since 2007. Yet he also notes that the unemployment rate in San Francisco has been dropping in recent months and the economy is predicted to add about 20,000 jobs in the next two years even without this subsidy by taxpayers.

Both Newsom and Egan have tried to cast these tax breaks as similar to the approach being taken by President Obama. Egan writes, “The policy is a targeted tax cut that mirrors the President’s New Jobs Tax Credit, which is supported by a wide range of economists.”

But the big difference is that the federal government can deficit-spend and doesn’t have to reduce its own spending, which would have a negative impact on economy, as Egan’s report acknowledged a few pages later: “Because the City cannot run a fiscal deficit from one year to the next, the lost revenue would necessitate reductions in City staffing and services, like any revenue shortfall.”

The report specifically doesn’t analyze the impact of that reduced government spending on the local economy, with Egan writing that, “is not considered, because the City could adjust to that impact in many ways.” New taxes, for example, which Newsom has avoided proposing as a partial solution to the city’s gargantuan $520 million projected budget deficit.

In an interview with the Guardian this morning, Egan also affirmed what he has told us before, that the consensus among economists is that direct government spending stimulates the economy more than tax cuts, even though these tax cuts tied to new hiring are better than general tax cuts.

For example, Egan said that another current Newsom tax cut proposal – a $2,000 tax break for businesses that provide health care to employees – “would have a negative effect on the economy” because it doesn’t encourage hiring.

While the report is generally favorable to the notion of these targeted tax cuts, it doesn’t make a recommendation. And it does take away a key argument that Newsom and other believers in trickle down economics generally make, that the tax cuts will ultimately be paid for by increased economic activity. Instead, the report shows the cuts will cost $85 million of two years and the new hires will generate $12 million in increased sales, hotel, and other taxes. Even stretching that analysis out over 10 years, assuming the new hires remain employed after the tax exemption ends, the reports says the policy will still cost the city $42 million.

Sup. John Avalos, the chair of the Board of Supervisors Budget and Finance Committee who has been skeptical of Newsom’s tax cut proposals, has set a Feb. 24 hearing on the proposal.

Basically, this is a policy decision rooted in ideological beliefs: Should the city subsidize private companies at great cost to the public treasury, payroll, and services? Does the public sector exist solely to serve private corporations? Economic conservatives who are hostile to government generally think so, but progressives think it’s crazy to make deep cuts to government spending and services just to subsidize private sector economic growth, most of which is going to occur naturally anyway.

Public employees feel blindsided by Newsom’s layoff scheme

Jesse Hawthorne Ficks
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Public employees feel blindsided by Newsom’s layoff scheme

Mayor Gavin Newsom’s proposal to lay off 10,000 city employees and rehire them at lower pay is being met with outrage by some public-sector workers. The plan, crafted as a way of saving money to balance the city budget, would amount to sweeping pay cuts across the board for a significant number of city workers.

Formal discussions about it are in the earliest stages, and Tony Winnicker, the mayor’s press secretary, described it as “just one alternative that we’re investigating.” Nonetheless, some members of Service Employees International Union Local 1021 are furious that the mayor unveiled this plan in the San Francisco Chronicle instead of at a meeting with the city’s labor leaders.

“As far as we can tell, an idea he has ended up on the front page of the Chronicle that’s had a devastating ripple affect among the people who work for the city and county,” SEIU Local 1021 President Damita Davis-Howard told the Guardian. “We feel like we got a sucker-punch. … We really wish he had talked to us before he governed by press conference.”


Davis-Howard said she’s been inundated with phone calls from angry union members who read the article. “This is the same proposal he floated last year,” Davis-Howard said. “Most of our members believed that they gave up their holiday pay in order to avoid this very thing.”

The proposal, which was briefly considered last year but never moved forward, serves to illustrate just how hard financial woes are hitting San Francisco. The city is staring down a $522 million deficit, and Newsom’s proposal would make up for a mere $50 million in savings.

Winnicker declined to comment on Davis-Howard’s concerns about being blindsided by news of the layoff plan, brushing it off by saying the mayor did discuss it with “some folks in labor.” Instead, he suggested that Newsom is getting serious about solving the budget crisis while the Guardian is just focusing on irrelevant gripes.

“It is an unprecedented budget shortfall, and it is real,” Winnicker said, stressing that the gaping budget gap will have to be bridged without the infusion of federal stimulus dollars that cushioned the blow last year. “The easy choices are behind us.” This layoff plan could prevent “hundreds, if not thousands, of layoffs,” but the mayor is open to other ideas that labor brings to the table, he said.

“That logic is just flawed,” Davis-Howard said when asked about the assertion that the plan could prevent layoffs. “That’s not the way you re-stimulate the economy, by taking more dollars out of the economy. We can’t continue to balance the budget on cuts, because pretty soon the actual fiber of the city and county of San Francisco will be reeling because of the number of cuts that we sustained.”

When asked how SEIU Local 1021 would respond, she said, “I do believe we need to be open-minded, imaginative, and creative in coming up with some revenue-generating measures here.”

No doubt the mayor will receive plenty of suggestions as negotiations continue in the coming weeks.

Clipboard clash

Jesse Hawthorne Ficks
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1
Clipboard clash

rebeccab@sfbg.com

When John Grubb switched jobs a few months ago to work for Repair California, a nonprofit that aims to remedy Sacramento’s political dysfunction by revising the state Constitution, he never imagined how ruthless the political world could be for a public figure advocating for reform.

“I got a death threat myself this morning,” Grubb confided in a recent telephone conversation with the Guardian. He declined to say from whom, and seemed to be wondering if he should have kept quiet about it. “Now we have our security guards at the building watching for this person,” he added, trying to laugh it off as if unfazed.

One day earlier, Grubb had distributed a press release charging that Repair California was being subjected to intimidation, blacklisting, and other “dirty tricks” and strong-arm tactics from representatives of the state’s major signature-gathering firms. These politically powerful companies are trying to quash Repair California’s campaign for a California constitutional convention, he charged.

Ironically, it seems an initiative campaign that could reform how initiative campaigns are conducted in California has provoked the ire of the initiative campaign industry.

Repair California is circulating petitions to get a pair of initiatives on the November ballot asking voters if a constitutional convention should be called to reform state government. Despite having a healthy $3.6 million in funding, it has encountered major stumbling blocks toward collecting the 1.1 million signatures needed to qualify.

Paid signature gatherers were shouted down in the streets, threatened with the prospect of never working in the industry again, and spied on by informants from signature-gathering firms that then placed them on blacklists, according to Grubb. The nonprofit also alleges that representatives from these firms were seen throwing stacks of signed constitutional convention petitions into the trash.

There are six major signature-gathering firms in California that contract with political campaigns to circulate petitions for ballot initiatives. Through a network of regional coordinators, they hire independent contractors who are paid by the signature to stand on the street with clipboards soliciting voters’ support.

The firms take in millions of dollars from each campaign, but for circulators who carry half a dozen petitions at once, the work comes in temporary bursts and moves from state to state. Paid signature gatherers who spoke with the Guardian said that being blacklisted could spell disaster — a hefty pay cut or being frozen out of a job completely.

Attorney Steven Miller, who works with the firm Hanson Bridgett and is representing Repair California, sent a cease and desist letter to at least three of the six major firms Feb. 2, a first step toward possible litigation. Miller told the Guardian that the firms’ activities constitute an illegal boycott and a violation of antitrust laws. Their tactics also interfere with rights guaranteed in the California Constitution to circulate petitions and place initiatives on the ballot. “Nothing surprises me anymore, but this really surprised me,” he said.

While Miller didn’t say exactly which firms he sent letters to, the three names that came up in various off-record conversations on this matter were Kimball Petition Management, run by Fred Kimball; National Petition Management, run by Lee Albright; and Arno Political Consultants, run by Michael Arno.

Grubb formerly served as a spokesperson for the Bay Area Council, a business group based in San Francisco and the primary force behind Repair California. The council’s push for a Sacramento shakeup generated a buzz last November when Clint Reilly, a renowned San Francisco political consultant who sits on the board of the Council, emerged from retirement to helm the campaign.

Repair California envisions the convention as a rare opportunity for Californians to reshape certain aspects of state government. After an extensive meeting, convention delegates would ask voters to approve suggested tweaks to California’s constitution. Proponents say issues begging for reform include the Legislature’s two-thirds majority vote requirement to pass a budget, government efficiency, the election process, and the initiative process itself.

“In California today … you basically need to get 1 million signatures in 150 days or less” to get an initiative on the ballot, Grubb said. “And the only way to do that is with several million dollars in your checking account, which is something most average citizens don’t have. That means that the initiative process has in effect been captured by special interest groups — moneyed interests.”

Therein lies the rub. It would be virtually impossible for Repair California to get a call for a constitutional convention on the November 2010 ballot without paying people to collect signatures — but many paid signature gatherers are afraid of putting themselves out of business by circulating the petition. Some are worried about getting blacklisted by major firms, while others are concerned that the entire industry could be overhauled as a result of a constitutional convention.

Given the serious allegations and potential lawsuit surrounding this matter, only Grubb and Miller were willing to be quoted for this story. Yet sources on both sides of the issue did speak with the Guardian on condition of anonymity.

Grubb said that Repair California never sought contracts from the big signature-gathering firms, preferring instead to amass its own force of clipboard-wielding petitioners. “We never had the intention of going to them,” he said.

But an industry insider told the Guardian that the nonprofit did approach two of the major companies to sign a contract, but got turned down due to a consensus that the petition would lead to an overhaul of the industry. This person also suggested that the pending lawsuit was way off the mark, and speculated that Repair California was concocting it to try and win money, media attention, and public support.

Another person familiar with the industry put it this way: “None of the petition people wanted to carry it because it would slit their own throats. They all agreed not to do it — it could kill the goose that laid the golden egg.”

So far, the campaign for a constitutional convention has gathered only about 100,000 of the 1.1 million signatures needed by the end of April to qualify for the November ballot. It will have to spend an estimated $1 million more than anticipated, Grubb said, because many of the paid petition circulators are being brought in from outside California’s initiative-industry network.

Despite the extra cost, Grubb says he feels confident the campaign will be a success. “Popularity hasn’t been a problem,” he said, “except for with the signature gathering firms.”

The “jobs” shell game

Jesse Hawthorne Ficks
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0
The “jobs” shell game

Written with Nima Maghame

news@sfbg.com

While many San Francisco city officials have been trying to figure out how to close a projected budget deficit of more than $520 million, Mayor Gavin Newsom has spent the last month trying to make that spending gap even larger by aggressively pushing a variety of business tax cuts that economists say will do little to improve the local economy and could actually make it worse.

Newsom first proposed his so-called “local economic stimulus package” a year ago during his ill-fated run for governor, just as President Barack Obama was pushing his own economic stimulus plan. But unlike the federal government’s $787 billion plan, about a third of which involved tax cuts demanded by conservatives, Newsom proposed to cut local business taxes while also deeply slashing local government spending and laying off hundreds of city workers.

Most economists say that’s a terrible idea. In fact, a report issued at the time by Moody’s Investor Services made it clear that every dollar of direct government spending adds about $1.60 into the economy (or $1.73 if it’s on food stamps, the most stimulative spending government can make), whereas business tax cuts add only about $1 to the economy for every dollar spent.

We clashed with the Mayor’s Office at the time on our Politics blog (see “Mayor Newsom doesn’t understand economics,” 2/13/09), with Newsom’s spokesperson telling us the mayor was relying on the input of City Economist Ted Egan. But when we interviewed Egan about the issue, he agreed that it’s a bad idea to slash government spending to pay for tax cuts.

“We were in no way saying you should cut taxes to stimulate the economy, particularly if it means reducing government spending,” Egan told us then. And when we asked directly whether it’s better for San Francisco’s economy for the city to directly spend a dollar on payroll or to give that dollar away in a private sector tax break, he told us, “The consensus among economists is that most of the time government spending stimulates the economy more.”

The Board of Supervisors basically ignored Newsom’s proposal. But he revived it last month, expanding the proposals with even more private sector subsidies and making them the centerpiece of his Jan. 13 State of the City speech, publicly pushing it since then with a series of public events at businesses located in the city.

And this time — with the local economy still slow, projected city budget deficits bigger than ever, and little serious talk about how the city can bring in more money — it appears the proposals will be the subject of a series of hearings before Board of Supervisors’ committees in the coming weeks.

Newsom’s tax cut proposals include a proposal to waive the 1.5 percent payroll tax (the city’s main business tax) for all new hires; extend and expand the payroll tax exemption for biotech companies (see “Biotech’s bonanza,” p. 12); give small businesses tax credits for their spending on health plans; and allow developers to pass one-third of their affordable housing in-lieu fees onto future homeowners.

Newsom and his Press Secretary Tony Winnicker have spoken euphorically about the proposals, saying they’re desperately needed to spur the local economy. “We believe that enacting these tax incentives, particularly the payroll tax credit for new hires, is one of the single biggest things we can do for economic growth,” Winnicker said.

Despite repeated questions about the economists’ concerns over financing tax cuts with government spending cuts, we couldn’t get them to address the tradeoff directly. “The mayor will support critical public services,” was all Winnicker would say about the deep cuts that Newsom is expected to announce in his June 1 budget.

Sup. John Avalos, who chairs the Board of Supervisors Budget and Finance Committee, expressed more skepticism about the mayor’s proposals. “Do tax breaks have the intended effect of stimulating the economy? As we underfund government services, are we getting a net gain or are we getting something taken away? For the very small businesses in my district, it’s going to be trickle-down economics. It’s very unrelated and unmeasurable in benefit,” he told us.

David Noyola, board aide to President David Chiu, said his boss is supporting the biotech tax credit but reserving judgment on the rest. “It’s going to be a cost-benefit analysis,” Noyola said. “When we’re talking about jobs, we’re talking about public and private sector jobs, always.”

While Egan’s economic analysis predicts tax cuts will encourage some economic growth, even he is circumspect about the good it will do, particularly without finding a way to avoid deep cuts in city spending. “The truth of the matter is that our stimulus efforts are small because the city has relatively small power to affect the local economy,” Egan told us.

That’s the consensus economic opinion. Huge federal spending can help a national economy a little bit, but local economies are just different animals that local governments are largely powerless to really alter, particularly through tax cuts.

“I agree with Egan: city government has little power over the local economy,” Mike Potepan, an urban development economist at San Francisco State University, told the Guardian.

Both economists agree that tying tax cuts to job creation or development stimulus is better than general tax cuts, but that neither is good if it means laying off more city workers.

“Research shows that by cutting taxes you have more business activity where studies show it is likely to effect employment,” Potepan said. “On the other side, you have to think about revenue. Cities are going to have to balance their budgets, which could mean a cut in services.”

Author Greg LeRoy expresses a more critical perspective in his book The Great American Jobs Scam: Corporate Tax Dodging and the Myth of Job Creation (1995, Berrett-Koehler), amassing evidence from economic studies and CEO surveys that corporate tax breaks, even those tied to new job creation, have almost no effect on private companies’ decisions about where to locate and whether to hire.

“How can companies get away with this? Because the system is rigged. Corporations have it down to a science. They have learned how to chant ‘jobs, jobs, jobs’ to win huge corporate tax breaks — and still do whatever they wanted all along,” LeRoy writes. “That’s the Great American Jobs Scam: an intentionally constructed system that enables corporations to exact huge taxpayer subsidies by promising quality jobs — and lets them fail to deliver. The other benefit often promised — higher tax revenues — often proves false as well.”

While proposing to forgo collecting millions of dollars in payroll taxes (the Controller’s Office is still working on a projected total for the tax cut package), the Mayor’s Office also wants to spur development of new housing with a proposal that would delay collection of needed affordable housing money by more than a decade.

After hearing mostly from a large crowd of desperate developers and construction workers during a Jan. 21 hearing on the proposal, the Planning Commission approved the package on a 4-3 vote, with the mayor’s appointees in agreement and the board’s appointees in dissent. It will be considered by the Board of Supervisors Land Use Committee sometime after Feb. 12.

The most controversial part of the fee reform package involves reducing the fee developers pay to support affordable housing by 33 percent, then charging a 1 percent transfer tax to subsequent buyers of those homes. Egan estimates developers would save almost $20,000 per housing unit, and that it would take an average of 16 years for the city to recover that money. But for high-rise luxury condos, the city would eventually recover about $27,000 per unit.

“It’s a classic make-an-investment-now-to-get-more-later strategy,” Michael Yarne, who crafted the policy for the Mayor’s Office of Economic and Workforce Development at Newsom’s direction, told the Guardian.

“If it makes it feasible for projects to be started, then it is worth passing,” Tim Colen, a representative of San Francisco Housing Action, said at the Planning Commission hearing, expressing hope that it will help create desperately needed construction jobs and new market rate housing.

But affordable housing advocates and some progressives criticize the policy as completely backward, saying that affordable housing development is desperately needed now, during these tough economic times, rather than a policy that encourages more market rate housing and bails out bad investments made at the height of the real estate bubble.

“What the city needs to do is directly build affordable housing, for which there is a demand,” affordable housing activist Calvin Welch told us. “The problem is that the banks don’t want to lend these guys money because they know nobody can afford to buy houses at the prices that these guys are demanding.”

Debra Walker, who is running for supervisor from District 6 and voted against the proposal when it came before the Building Inspection Commission (the sole vote on a commission dominated by mayoral appointees), agrees.

“The whole argument is that it stimulates development, but it doesn’t,” Walker said, arguing that the incremental gains (about 25 housing units per year, Egan estimates) will be offset by delayed affordable housing construction. “There would be more economic stimulus by using the fee to build more affordable housing.”

Instead, it simply shifts resources to favored entities: from home owners to developers, in the case of the affordable housing fees, or in the case of the tax credits, from the public to the private sector. But Newsom’s office just doesn’t see it that way.

“The Guardian believes in protecting public sector employees over private sector employees,” was how Winnicker formulated our understanding of what the economists are saying. “Most people don’t work for the city, and if we can support private sector jobs, that adds to sales tax revenues and benefits the economy. Despite a short-term impact of the tax credit, that’s a benefit.”

Adam Lesser contributed to this report

 

Biotech’s bonanza

Jesse Hawthorne Ficks
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0
Biotech’s bonanza

By Adam Lesser

news@sfbg.com

It’s difficult to measure the value a biotechnology company receives from locating in San Francisco. Most measures are qualitative: scientists talk about synergy with other biotech companies in the area, the intellectual community that thrives at the University of California-San Francisco, and support offered at the California Institute for Quantitative Biosciences (QB3).

But the quantitative costs are easier to calculate, beginning with rents that often are two to three times higher than in the East Bay or South Bay. Add San Francisco’s 1.5 percent payroll tax, and companies can begin to attach a dollar figure to the premium of being in San Francisco.

To incentivize biotech companies to locate in San Francisco, Mayor Gavin Newsom is asking the Board of Supervisors to extend the six-year-old Biotech Payroll Tax Exemption. The exemption allows any new biotech company to get a full 7.5 years without paying local business taxes as long as it files for the exemption by Dec. 31, 2014.

At a time when San Francisco city officials are struggling to close a budget deficit of more than $500 million — for which Newsom hasn’t offered any significant revenue proposals to help bridge the gap — some are questioning why the city should continue giving millions of dollars in tax breaks to the thriving biotech industry.

The core question of whether the payroll tax credit has worked in bringing more biotech companies to San Francisco is complex. While Newsom boasted of attracting 54 new biotech companies in the last five years during his Jan. 13 State of the City address, analysis of the credit by Ted Egan, the city’s chief economist, indicated that only eight companies had applied for the credit by the end of 2008.

The thriving research environment at UCSF-Mission Bay and the establishment of the state taxpayer-funded California Institute for Regenerative Medicine have played significant roles in creating a favorable environment for young biotech companies. The last five years also have seen broad growth in biotech as scientific discoveries have accelerated. Would biotech companies have come to San Francisco regardless of the payroll tax exemption?

The city’s Office of Economic Analysis looked at the question of how effective the payroll tax exclusion actually has been in spurring biotech growth. Because the size of the incentive — an exemption from paying a 1.5 percent tax on its total payroll — is relatively small, Egan felt that there could not be a conclusive link between the exemption and biotech growth. But he did feel there was some benefit, writing in his analysis that “in fact, the primary worth of the incentive may lie in its marketing value and how it signals to the industry that San Francisco is a credible location for biotechnology.”

Between 2004 and 2008, the biotech tax credit cost the city $1.2 million. If costs stay on pace with 2008, the existing Biotechnology Tax Exclusion will cost at least an additional $2 million. There are no cost estimates yet on extending the credit to give all biotech companies the full 7.5 years of payroll tax exclusion.

The extension faces opposition. Sup. John Avalos, chair of the Board of Supervisors Budget and Finance Committee, has expressed concern about the effectiveness of tax credits.

“I’m not sure the city is going to be able to show a direct connection between taxes and the growth of the biotech industry. The verdict is still out for me,” Avalos told the Guardian. “We’ve created the whole infrastructure for the industry around Mission Bay. That could have a lot to do with companies coming to San Francisco.” The city donated a portion of the land the UCSF-Mission Bay campus was built on.

Allopartis Biotechnologies is a small biotech startup in QB3 at UCSF-Mission Bay that has received venture capital funding. It saved $3,670 in 2009 by qualifying for the payroll exclusion. Allopartis has six employees and focuses on developing technologies to convert biomass into sustainable fuels.

“You pay a premium to be in the city, and it’s worth it,” said Robert Blazej, cofounder of Allopartis. “We’d like to stay close to this nexus of innovation and collaborators. But it’s going to be challenging with the cost of square footage.”

Interviews with other growing San Francisco businesses showed that their biggest concern was the cost and availability of commercial real estate. Zynga, a social gaming company in Potrero Hill, plans to add 800 jobs over the next two years. Newsom has asked for an additional waiver on payroll taxes for all new hires over the next two years, regardless of industry.

“We considered moving out of San Francisco for a couple reasons. One is the availability of commercial real estate. The other is the payroll tax,” said Chief Financial Officer Mark Vranesh. “The large blocks of space we would be looking for are hard to find.”

But as the city tries to plug gaps in dwindling city services, concerns are mounting about how much the city can give away to companies under the premise that tax credits create new jobs. In the debate about the biotech tax credit, objections have been raised about the fundamental fairness of giving a tax break to one industry while others still pay their share. Similar next generation industries with large up-front research and development costs such as solar energy or fiberoptic Internet do not receive payroll tax waivers.

Economists such as the Tax Foundation’s Patrick Fleenor are quick to point out that there are no political advantages to taxing everyone equally. “The problem is a political one. If you tax everyone the same, there aren’t politicians creating little fiefdoms. There aren’t ribbon-cutting ceremonies,” he said.

Avalos has equated judging the effectiveness of tax credits at creating jobs to looking into a crystal ball. But the price tag of each tax credit is borne in the present as the city contemplates laying off hundreds of city workers.

Adding to the political infighting have been public complaints by Sup. Michela Alioto-Pier that Newsom is trying to take credit for the biotech payroll exclusion, which she originally proposed and helped legislate in 2004. She requested an extension for the biotech tax credit in November. Her office has defended the bill. “We’re creating a hub so that other biotech companies can come to San Francisco,” said Bill Barnes, Alioto-Pier’s legislative aide. “When she was courting biotech, she was hearing that the payroll tax was an impediment.”

But other cities charge local business taxes comparable to San Francisco’s payroll tax. And if there was ever an industry that has been heaped with support from the public sector, it is biotech.

Proposition 71 passed with 59 percent voter support in 2004 and established the CIRM, which provides grants and loans for stem cell research. Stem cell research is an area within biotech that has seen significant political support, particularly since the time of the Bush administration, when federal funding for embryonic stem cell research was heavily restricted.

But appearing to be doing something about the economy remains politically important, even if the actual benefits are somewhat dubious.

“It’s a big political game that the mayor is playing. He wants to paint progressives as anti-jobs, which is ridiculous, and paint himself as the mayor for jobs,” Avalos told us. “We would be cannibalizing government services for the private sector.”

Newsom has been vague about whether he accepts that tradeoff or even understands its implications to city coffers and the local economy. Newsom Press Secretary Tony Winnicker recently told us, “He thinks it’s good policy to spur private sector job growth.”

Later, he added: “While not every company has taken advantage of it, we feel extending it sends the right message,”

Editor’s Notes

David Talbot
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Editor’s Notes

tredmond@sfbg.com

Progressives don’t have to be afraid of economic development, don’t have to be afraid of promoting business and creating private-sector employment. And we don’t have to be terrified of a mayor who wants to label anyone who opposes Reagan-era economic policies as anti-jobs.

The thing is, San Francisco needs to promote the biggest engine of new employment — small business — and needs to encourage entrepreneurship and innovation. But there’s enough good economic science out there, enough evidence of what works and what doesn’t, that we don’t have to be stupid.

The most obvious example of that is tax cuts. We talk about the mayor’s tax plans this week — and what’s most remarkable is the consensus among economists, even the city’s own economist, that what Newsom is proposing won’t work.

If cutting specific taxes for certain businesses — say, waiving the 1.5 percent payroll tax for biotech — would actually lead local companies to hire hundreds of new people, it might be worth the budget pain. But that’s not going to happen. If allowing developers to pay their affordable housing fees years down the road would put thousands of construction workers back on the job, you could make the case for it — but nobody with any sense really thinks that’s likely.

What do we know would create employment opportunities? Well, a giant affordable housing bond, hundreds of millions in city money going to build new apartments, would generate construction jobs. But what most small businesses really need, what would really encourage hiring, is credit. If San Francisco took the money it’s going to expend (and tax cuts are an expense; let’s be honest) and put all of it into a revolving microloan fund for community businesses, we’d get a lot more jobs. In fact, almost any way that San Francisco spends that money on direct services would create more jobs than these tax cuts.

That’s not politics or ideology or anything else. It’s just reality.

Why Newsom drives me nuts

Zelda Bronstein
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2

This is the kind of thing that drive me nuts about the Newsom administration.


A few days ago, SF Appeal ran an item on a speech Newsom gave about condo conversions. The mayor wants to let more people turn rental units and tenancy-in-common units into condominiums; that, Newsom argues, will bring more revenue into the city treasury (those conversion permits are expensive).


But there’s a reason why the city limits to 200 the number of units that can be converted in any one year. Turning a rental unit into a condo reduces the number of rentals available, and turning a rent-controlled unit into a condo (or into a TIC and then a condo) cuts into the affordable housing stock.


And a majority of the supervisors, who recognize the impact the mayor’s plan would have on tenants (by making it easier to take rental units off the market), are dubious.


Okay, that’s a difference of opinion. You don’t have to make it personal. And yet, at his press conference, the mayor insisted that



“Half of the members of the board have been beneficiaries of condo conversions, and yet they deny it to other people.”


As the Appeal pointed out, that’s simply untrue.




A majority of Board members own their homes, according to a check of property records: mayoral allies Michela Alioto-Pier, Sean Elsbernd and Carmen Chu all enjoy the benefits of owning and equity, as do Sophie Maxwell and progressive Budget chairman John Avalos.



Eric Mar and David Chiu rent, according to a City Hall source. Chris Daly lives in a condo, but “my condo has always been a condo,” according to the supervisor (and according to the Assessor-Recorder’s Office, Daly at least bought his condo as a condo and not a tenancy-in-common or conversion).


By all accounts, progressive Ross Mirkarimi is on the condominium-conversion waitlist (an older news report says Ross owns a TIC and is on the conversion list; we’ll check in with him to confirm, he is at this moment still in committee). Mirkarimi and Bevan Dufty would be the two Board members conflicted-out of any votes on condo-conversions; Dufty went from a condo to a TIC after his daughter was born.


“And nobody was evicted,” the Bev told us today.


Okay, as I see it only one supervisor is even in a position to benefit from the condo conversion law. So I asked Tony Winnicker, the mayor’s press secretary, whether Newsom had been misquoted. Apparently not. So why did ne make an innacurate statement that insulted half the members of the board?


Winnicker:



His comments came in the context of the polarized politics of San Francisco which pit tenants vs homeowners to the benefit of no one. He was speaking that many Boardmembers enjoy the benefits of homeownership and that opposing the condo conversion proposal denies those benefits to others who are already living in TICs and displacing no one through condo conversion.


But there’s a big distinction between what Winnicker is talking about and what Newsom actually said. It’s entirely possible to be a homeowner in this city without evicting anyone and without taking a rental unit off the market. That’s what most of the homeowning board members have done.


As for TICs “displacing no one,” that’s wrong, too. The number one cause of no-fault evictions in this city is the use of the Ellis Act to clear the tenants out of a building to create a TIC. The only thing holding the TIC epidemic in check is the fact that the TIC ownership model is complex and a bit tricky. The minute you can convert those TICs into condos, you open the floodgates for a lot more of them — and that means a lot more evictions.


Newsom can make the case for condo conversions just fine without making factually inaccurate statements that insult the supervisors. Instead he pulls this shit. And then he complains about the supervisors not wanting to work with him


Drives me nuts.


 


 


 


 

Newsom’s perplexing attack on San Francisco’s economy

Sasha Cuttler
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4
Newsom’s perplexing attack on San Francisco’s economy

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

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

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

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

 

Joseph Stiglitz: Muddling Out of Freefall

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Joseph Stiglitz: Muddling Out of Freefall

Here is our monthly installment of Joseph E. Stiglitz’s Unconventional Economic Wisdom column from the Project Syndicate news series. Stiglitz is University Professor at Columbia University and the winner of the 2001 Nobel Prize in economics. His new book is Freefall.

NEW YORK – Defeat in the Massachusetts senatorial election has deprived America’s Democrats of the 60 votes needed to pass health-care reform and other legislation, and it has changed American politics – at least for the moment. But what does that vote say about American voters and the economy?

It does not herald a shift to the right, as some pundits suggest. Rather, the message it sends is the same as that sent by voters to President Bill Clinton 17 years ago: “It’s the economy, stupid!” and “Jobs, jobs, jobs.” Indeed, on the other side of the United States from Massachusetts, voters in Oregon passed a referendum supporting a tax increase.

The US economy is in a mess – even if growth has resumed, and bankers are once again receiving huge bonuses. More than one out of six Americans who would like a full-time job cannot get one; and 40% of the unemployed have been out of a job for more than six months.

As Europe learned long ago, hardship increases with the length of unemployment, as job skills and prospects deteriorate and savings gets wiped out. The 2.5-3.5 million foreclosures expected this year will exceed those of 2009, and the year began with what is expected to be the first of many large commercial real-estate bankruptcies. Even the Congressional Budget Office is predicting that it will be the middle of the decade before unemployment returns to more normal levels, as America experiences its own version of “Japanese malaise.” 

As I wrote in my new book Freefall, President Barack Obama took a big gamble at the start of his administration. Instead of the marked change that his campaign had promised, he kept many of the same officials and maintained the same “trickle down” strategy to confront the financial crisis. Providing enough money to the banks was, his team seemed to say, the best way to help ordinary homeowners and workers.

When America reformed its welfare programs for the poor under Clinton, it put conditions on recipients: they had to look for a job or enroll in training programs. But when the banks received welfare benefits, no conditions were imposed on them. Had Obama’s attempt at muddling through worked, it would have avoided some big philosophical battles. But it didn’t work, and it has been a long time since popular antipathy to banks has been so great.

Obama wanted to bridge the divides among Americans that George W. Bush had opened. But now those divides are wider. His attempts to please everyone, so evident in the last few weeks, are likely to mollify no one.

Deficit hawks – especially among the bankers who laid low during the government bailout of their institutions, but who have now come back with a vengeance – use worries about the growing deficit to justify cutbacks in spending. But these views on how to run the economy are no better than the bankers’ approach to running their own institutions.

Cutting spending now will weaken the economy. So long as spending goes to investments yielding a modest return of 6%, the long-term debt will be reduced, even as the short-term deficit increases, owing to the higher tax revenues generated by the larger output in the short run and the more rapid growth in the long run.

Trying to “square the circle” between the need to stimulate the economy and please the deficit hawks, Obama has proposed deficit reductions that, while alienating liberal democrats, were too small to please the hawks. Other gestures to help struggling middle-class Americans may show where his heart is, but are too small to make a meaningful difference.

Three things can make a difference: a second stimulus, stemming the tide of housing foreclosures by addressing the roughly 25% of mortgages that are worth more than the value the house, and reshaping our financial system to rein in the banks.

There was a moment a year ago when Obama, with his enormous political capital, might have been able to achieve this ambitious agenda, and, building on these successes, go on to deal with America’s other problems. But anger about the bailout, confusion between the bailout (which didn’t restart lending, as it was supposed to do) and the stimulus (which did what it was supposed to do, but was too small), and disappointment about mounting job losses, has vastly circumscribed his room for maneuver.

Indeed, there is even skepticism about whether Obama will be able to push through his welcome and long overdue efforts to curtail the too-big-to-fail banks and their reckless risk-taking. And, without that, more likely than not, the economy will face another crisis in the not-too-distant future.

Most Americans, however, are focused on today’s downturn, not tomorrow’s. Growth over the next two years is expected to be so anemic that it will barely be able to create enough jobs for new entrants to the labor force, let alone to return unemployment to an acceptable level.

Unfettered markets may have caused this calamity, and markets by themselves won’t get us out, at least any time soon. Government action is needed, and that will require effective and forceful political leadership.

Joseph E. Stiglitz, winner of the 2001 Nobel Prize in economics, served as Chairman of the Council of Economic Advisers from 1995 to 1997. He is the author of the recently published bestseller, Freefall: America, Free Markets, and the Sinking of the World Economy.

Copyright: Project Syndicate, 2010.
www.project-syndicate.org
For a podcast of this commentary in English, please use this link: http://media.blubrry.com/ps/media.libsyn.com/media/ps/stiglitz122.mp3

 

Drinking the tea, ignoring the facts

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Drinking the tea, ignoring the facts

Listening to members of the Tea Party movement on KQED’s Forum this morning, I and many callers to the show were struck by the basic inaccuracy of their core beliefs, these revanchist delusions about what’s in the U.S. Constitution and how this country really operates.

There’s a lot of justifiable anxiety out there over the state of the country, and the Tea Party movement has tapped into that with bumper sticker slogans that are just broad enough to capture alienated Americans from across the political spectrum. One recent poll shows that 41 percent of respondents are sympathize with the movement, stronger support than either major political party now enjoys.

But facts should matter, and they just don’t to many teabaggers or their high priestess, Sarah Palin, who is headlining the current national Tea Party convention in Nashville. For example, the two self-described “patriots” on this morning’s show railed against all the unconstitutional actions of the runaway federal government in ways that reveal an astonishing ignorance about the document they claim to prize so highly.

An East Bay woman from Bay Area Patriots, Heather Gaas, complained that the “government takeover” of the health care system is specifically prohibited by the constitution, seemingly unaware that there is no takeover, and even if there was, the federal government is specifically empowered to “regulate commerce” and see to the country’s “general welfare.”

North Bay teabagger Gary Hahn claimed that a free market system with minimal government is enshrined in the Constitution, another false claim. The words “capitalism” or “free market” aren’t in the Constitution, which doesn’t prescribe an economic system for the country and would even allow socialism to exist if we had to votes to approve it.

Luckily, while host Dave Iverson did little to correct the teabaggers’ inaccuracies on the first half of the show, a series of callers did that work on the second half. One caller, who was a self-described Tea Party member and Ron Paul supporter, criticized the hypocrisy of the guests’ for criticizing “big government” while supporting its wars and imperial overreach, sounding the anti-war position that is also an element of this broad and unfocused movement.

And that’s really why we shouldn’t read too much into this movement’s power and its implications (check out this interview for an insightful take on why conservatism no longer contributes anything useful to American politics). The Tea Party is best understood as a primal scream rather than a political movement. I’m a big government progressive, yet I share the teabaggers’ outrage over the Wall Street bailouts and the corruption and unresponsiveness of the two major political parties.

We may even share a few revanchist impulses, concerns that powerful forces have steered this country away from what it once was. But my concern is with Big Corporations that have eroded basic egalitarian principles expressed from the Declaration of Independence (the right to “life, liberty and the pursuit of happiness,” talk about radical!) to the New Deal, not with Big Government (except for its biggest and most wasteful element, the bloated military budget).

But the revanchist fantasies of most tea baggers long for a time that is no longer possible, when there was still a frontier on which rugged individualists could stake their claim, for that “shining city on the hill” that their god, Ronald Reagan, once conjured up in the national mind’s eye. They want to smite their liberal enemies and restore this country to a position of deserved greatness, an attitude that frankly scares the crap out of me, with its echoes of 20th Century fascism.

The realities of today are much more complex than the teabaggers’ simplistic beliefs. They want to deeply cut government spending, despite the damage that would do to the fragile economy. They want us to get tough with the terrorists, unaware that every bomb we drop has the potential to create new enemies. They want more power for the “real Americans,” however racist and divisive that judgment is made.

Yet their primal scream shouldn’t be ignored because it is the manifestation of frustration that cuts across a wide swath of the country that is fed up with politics as usual. But in the teabaggers’ ignorance of the Constitution and the basic social contract on which any country or government is based, we can see just how much work there is to do before we have an educated and engaged citizenry that is even capable of participating in a democracy. So this is still a party worthy of our attention.

 

Recalling Sophie Maxwell

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Written with Adrian Castañeda

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Does it make sense to try and recall termed-out D. 10 Sup. Sophie Maxwell?


A group of District 10 residents has turned in 8,008 signatures in an effort to recall Sup. Sophie Maxwell. Election department staff says that 7,529 signatures must be verified for the recall attempt to go forward.

‘We think it’s going to be a little tight,” said an election department worker, who preferred to remain anonymous.

Department of Elections staff have 30 days to count and verify the submitted signatures, but they predict the process could be completed as early as Thursday afternoon (Feb. 4) or Friday morning (Feb. 5).

Meanwhile, Maxwell is termed-out in January 2011–a mere 11 months away. And 15 candidates have already filed to enter the D. 10 race this fall, with a dozen others variously threatening to throw their hats in the ring.

But if the recall effort gets the green light and is placed on the June 8 ballot, and if Maxwell actually gets recalled as a result of that vote, Mayor Gavin Newsom would then get to appoint his choice of successor to her seat. And if that successor happens to be one of the candidates vying for Maxwell’s seat, wouldn’t that person have an enviable edge come the November election?

Bayview activist Daniel Landry insists the recall effort would be effective. 
“We’re sending a message to anyone who wants to be a supervisor of D-10, you must recognize the will of the voters,” Landry said.

D 10 candidate Ed Donaldson warns that any supervisor that does not understand the complexity of the city’s largest district can expect a similar backlash. He says the recall effort is evidence of District 10’s diversity.
“There is no one homogenous voice in the community,” Donaldson said.
He says that the current grass-roots organizing that brought about the recall effort is a result of changing political structure in the area, but is not yet on par with the other districts in town.
“We still allow our politics to be controlled from downtown,” Donaldson observed.

D 10 candidate Espanola Jackson warns that if Newsom appoints someone, that person had better listen to the wishes of the community, or else they will face a similar fate to Maxwell.

“What the mayor needs to understand is that if we can get the signatures in two weeks to recall Sophie, we can get them on whoever he appoints as well,” Jackson said.

But D 10 candidate Eric Smith worries that the recall effort will backfire. He cites a recent community meeting in the Bayview on the Department of Park and Recreation’s budget, as an example of why folks are turning to this seemingly desperate strategy.

“People were emotional, angry and desperate, because they feel no one listens to them,” Smith said. “That’s part of the problem here; they would rather have a supervisor go down swinging for them, rather than watch one seemingly side with Lennar, PG&E and the Mayor on issues contrary to their interests. At the DCCC [Democratic County Central Committee] last week, everyone except Chris Daly voted against the recall in support of Sophie.”

Smith added that Daly’s vote, “likely had more to do with his belief that this was a waste of time and had no chance of actually succeeding, but you’ll have to ask him.”

Daly, for his part, says he doesn’t believe the recall effort will qualify.

“Jake McGoldrick introduced an item in committee when he was a supervisor that the Board then passed that doubles the numbers of signatures required for a recall to qualify,” Daly said, noting that under the old recall rules the current effort would likely have succeeded in getting onto the ballot.

“And I don’t think the DCCC’s resolution against the recall effort was accurate,” Daly added. “It was long on the fact that Sophie isn’t guilty of malfeasance, but the truth is that a recall is a tool of democracy that is available and can be applied in cases where a representative is not being responsible to the needs of their district. So, while I’m not supportive of recalling Sophie, it would be patronizing for me to say that thousands of D. 10 residents don’t know what they are doing. The Democratic Party (with a capital D) is working against democracy (with a small d) in a patronizing way in a district that has a disproportionately high number of low-income folks and people of color. There is a significant level of disgruntlement, if that is a word, in District 10, and its residents have lodged a pretty real and significant complaint.”

Aaron Peskin, who chairs the DCCC’s executive board and is the former President of the San Francisco Board of Supervisors, also predicts that the effort to recall Maxwell is probably headed nowhere.

“There’s no way they got the numbers,” Peskin said. “You’re lucky if 50 percent of that shit runs.”

Peskin proffers three reasons why recalling Maxwell is against the community’s own interests.
“First, recalls are an instrument to be used when a representative has committed malfeasance, and not because you disagree with the political positions of a person who has been duly elected three times,” Peskin said. “Second, this elected official is in her last eleven months in office. So, it’s a huge waste of time and money. And third, for those not satisfied with their current supervisor, any representative that the mayor might nominate would be far, far worse.”

Smith also worries that the recall effort is akin to the community shooting itself in the foot.

“If Sophie gets recalled, (and that is a very big if), the Mayor will insert someone and we may be right back where we started from, or worse. That’s the terrible irony and one of the biggest problems in District 10. Folks are so mad, they’re willing to do whatever it takes to make them feel they have a voice in the outcome, even if it’s potentially worse. The same thing happened with the Navy and the Restoration Advisory Board. Some of the same folks who were frustrated by the process, tried to send a signal to the Navy that they weren’t being heard and for all their well- intentioned efforts, got the RAB dissolved. I truly feel for them, it’s absolutely heartbreaking, but at times, they can be their own worst enemy.”

To Smith’s mind, a recall has the potential for exacerbating the very problems the effort is purported to be about.

“This isn’t about malfeasance, or not showing up for work,” Smith observed. “It’s about being heard, respected and listened to. I don’t think any other Supervisor has ever had the challenges that Sophie has had to face here; the Bayview, the Hunters Point Shipyard’s toxic super-fund site, the homicide rate, unemployment, poor public transportation, dwindling services and community resources have made D10 one of the City’s largest melting pots of discontent. It’s just one of the reasons I’m running. The health, welfare, quality of life issues and the environment are the things I put above everything else out here, particularly above special interests and big money.”

“We will soon know how valid those signatures are; I can tell you that the many of the folks behind it feel very confident about it,” Smith continued. “But Sophie still has a lot friends in D10 who will not vote her out, so even if this makes the ballot, there is no guarantee it will carry. There are many, many folks who still love and support Sophie, so the folks who signed the recall petition will have to overcome the balance of the 37,000 D.10 voters who may not want to see her go and have a vested interest in seeing a fair electoral process in November, untainted by a Mayoral appointee, an appointee that would have implied advantage over any of the candidates in November.”

Smith has asked many folks why they are launching a recall when Maxwell only has 10 months left on the job.

“For them, it’s about making a statement; they want everyone to know that ‘They’re mad as hell and not going to take it anymore,’” Smith said. “They also want to send a signal to the D10 candidates that this is what you will face if you don’t listen to them. D10 is not for the squeamish, those easily intimidated or the faint of heart.”

On a side note, Smith observed that “we will need the world to come out to defeat Proposition 16″, the PG&E ballot measure in June. “And, depending on the turn out, many of the folks needed to come out for that, may also play a role as it relates to Sophie’s recall.”

Asked what she thought of the effort to recall her, Maxwell characterized it as “strange” and “destabilizing.”

‘It seems to me that this effort is destabilizing the community,” Maxwell said. “When you undercut the leadership, you destabilize a community in transition. At a time when these folks could have something to say about the future, they are looking at the past. It’s about backward thinking. It’s about not having the best interests of the community. It’s about egos. Because if this is for the community, then why not bring something to the table that’s about bringing some direction to the district?”

One of the last straws, in the minds of some recall signature gatherers, was Maxwell’s 2009 vote against a resolution that would have advised the Navy to restore its community-based Restoration Advisory Board. This board, which was established in 1994, had consistent access to the many technical and environmental documents surrounding the proposed clean-up of the heavily polluted Hunters Point Shipyard.

The RAB, whose primary fucntion was to share information on investigations and clean-ups at the shipyard, was also able to vote on the Navy’s proposed solutions and to request more information and/or speakers and experts so its members could educate themselves on related public health and safety issues. But early last year, the Navy announced that it was dissolving the RAB, citing dysfunctional behavior and off-topic discussions that were getting in the way of the RAB’s intended purpose.

The move to dissolve the RAB came just as the Navy was poised to take a series of important decisions on some of the most polluted and radiologically-impacted parcels on the shipyard. And many in the community saw the timing of the RAB’s dissolution as evidence that the Navy was going to ignore their wish to have these parcels dug out and hauled away, and not capped (a wish shared by the 87 percent of voters who supported Prop. P in 2000.)

But despite the outcry that followed the RAB’s 2009 dissolution, Maxwell voted to tell the Navy to either restore the RAB or find other ways to involve the community–thereby giving the Navy the choice, some felt, to ignore the community’s desire to reinstate the RAB.

And last night, the Navy, along with a flotilla of police and special agents, showed up at the Bayview YMCA to share its plan to reformulate the Navy’s original Community Involvement Plan—a plan that angered many meeting goers ( the majority of which were former RAB members,) since it didn’t appear to aim at reinstating the RAB. But to give the Navy credit, once it became clear that meeting attendees were underwhelmed by its plan, Navy officials scrapped their original agenda and allowed the community to speak instead about their wounds from the past and their hopes for the future. It remains to be seen where the Navy will go next, but those interested in tracking these developments can visit the Navy’s website for updates.

Maxwell for her part defended her vote–and pointed the finger at the Navy.

“The Navy has an obligation to get out its plans to the public,” Maxwell said. “People are getting information in many ways, these days, not just by coming to meetings. The Navy has just got another $92 million towards the shipyard clean up, but does anyone know what this means? It means that instead of taking years to clean up groundwater at the shipyard, we can spend that money on it, now. And if folks knew what capping really means, maybe they wouldn’t be against it. Mission Bay is capped. Schlage Lock will be. And all of them are brown fields.”

Maxwell worries that democracy is not currently being well served within her district, but not by her.
“There are folks who are trying to block real information from getting out, and if only your view can get out, that’s not democracy,” Maxwell said.

But so far, she’s not willing to publicly support anyone in the November D. 10 race.
“I’m waiting for people to have a better understanding of what this community is, what the common thread running through it is, and how to use rank choice voting,” she said.

And despite the current recall effort—and the insults regularly hurled her way with a voracity and meanness not generally seen in other supervisorial districts, Maxwell said she has truly enjoyed serving as D. 10 supervisor.

“When people say that it’s an honor to serve as an elected official, I really know what they mean, because I really feel that. Democracy is challenging, it’s messy and it’s invigorating. I think a lot of what’s going on in my district is about people using people. But what has changed for these folks? Their lives have gotten worse, not better. And they are going after me, because I am not part of their group. I have tried to stay focused on the issues.”

 

Is the California Constitutional Convention campaign getting blacklisted?

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By Rebecca Bowe
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Repair California, a nonprofit organization leading the charge for a California constitutional convention, is preparing a lawsuit against signature gathering firms that it claims are illegally boycotting the campaign. The nonprofit hasn’t divulged exactly which firms it is going after.

In a letter sent yesterday to a signature-gathering company whose name was redacted, an attorney with the firm Hanson Bridgett charges that the company is part of a statewide boycott against Repair California. The letter also states that there is evidence that people acting on behalf of the company engaged in “dirty tricks” like intimidation tactics and throwing away petitions containing valid signatures.

Repair California is circulating petitions to gather enough signatures to ask voters on the November 2010 ballot if the state’s constitution should be opened up for revision at a statewide convention, the first time in 130 years that such a meeting would be called.

The Bay Area Council, a business group, is the driver behind the push for a constitutional convention. The idea has been endorsed by organizations across the political spectrum united by their conviction that California’s government is broken. A top priority for the campaign is to change the two-thirds majority vote requirement that makes it exceedingly difficult for the California Legislature to raise taxes and pass a state budget.

A letter prepared by Attorney Steve D. Miller on behalf of Repair California explains that the campaign tried to tap several different signature-gathering firms to circulate petitions, but the firms refused. Repair California has “reason to believe” that the refusal stemmed from an organized boycott against the campaign, the letter states, which drove up the price for the nonprofit’s signature gathering efforts.

“Their motivation is uncertain, but they are closely and undeniably tied with interest groups in Sacramento,” Repair California communications director John Grubb wrote in a widely disseminated email. “They have also cited fears about reform of the initiative process itself.”

Here’s an excerpt from the letter, prepared by Attorney Steven D. Miller:

We write to warn you to immediately stop engaging in a pattern of conduct that is not only in violation of State and Federal Antitrust law, but that also violates our client’s Constitutional rights. A failure to immediately cease these unacceptable activities will result in our taking appropriate legal steps to protect our client’s rights. To qualify its ballot measures for the ballot, Repair California has attempted to engage the services of several petition gathering firms and the firms have refused. We have reason to believe your firm has agreed with other State-wide signature gathering firms to boycott Repair California’s business. … In addition, we believe that people actually or apparently acting on your behalf are engaged in behavior intended to threaten and intimidate persons who are circulating petitions for Repair California.

Cheap dates

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Cheap dates

By Chloe Roth

Crosby, Stills, and Nash once crooned, “If you can’t be with the one you love, love the one you’re with.” If you’re lucky enough (or unlucky, for the V-Day scrooges out there) to find yourself paired up with anyone on this recession-doomed Valentine’s Day, you might be worried about how to show appreciation for your significant other while staying within your budget. The Beatles aptly sang, “I don’t care too much for money, money can’t buy me love.” And unless you’re currently in love with an escort, they are absolutely right. So this Feb. 14, whether you’re engaged in a truly loving and reciprocal relationship, passing time with a willing partner while you look for the ideal one, or courting a gold-digging opportunist, you can show the one you’re with a good time without doling out a lot of cash.

After all, “cheap date” doesn’t have to be a pejorative term used to describe the town bicycle (yeah, yeah, everyone’s had a ride). In the current economic climate, “cheap date” may describe your only option, but fret not! If you can’t afford an expensive five-course meal or want to steer clear of the overpopulated movie theaters (i.e. avoid seeing the cheesy rom-com your partner picked out), there are plenty of alternatives. Here are a few non-dinner-and-a-movie examples of how to show your honey a good (and affordable) time in either San Francisco or the East Bay.

BIG KID ACTIVITIES

When you were six, falling down in public was routine and relatively painless (given you didn’t have very far to fall). It’s a little different now that you’re an adult, especially if your clumsy face-plant happens in front of someone you’re trying to get into bed. But, really, what better way to get to know someone than through total humiliation? For many cold-weather novices (and too-cool-for-Brian-Boitano snobs), ice-skating offers the perfect opportunity for mutual embarrassment and, thus, subsequent bonding. On Valentine’s Day, the Yerba Buena Ice Skating and Bowling Center (750 Folsom, SF. www.skatebowl.com, 415-820-3532) is open to the public from 1-2:30 p.m. and 4-5:30 p.m. Admission for adults is $8 (or $11 with skate rental), a pretty low price to pay for feeling like a kid again. If you find yourself on the other side of the Bay Bridge and still fancy a skate, head over to Oakland Ice Center (519 18th St., Oakl. 510-268-9000, www.oaklandice.com). It’s open for public skating on from 1-3 p.m. and 3:15-5:15 p.m. (also $8, $11 with skate rental).

THE GROPE-A-DOPE DETOUR

If you skip the Valentine’s Day movie but still hope to get some R-rated action from an old-fashioned guy or gal, take advantage of San Francisco’s topography and drive up to Twin Peaks (501 Twin Peaks Road, SF.). It’s timeless, it’s free, and it’s quintessentially San Franciscan. Plus, who doesn’t love the classic make-out session at a lookout point? If you’re lucky, sneaking some of this old-fashioned romance into your night will get you one step closer to the set of twin peaks you’ve been trying gain access to since your first date. Or, if you’d like to catch a view of the Bay from Berkeley, drive up to Indian Rock (950 Indian Rock Ave., Berk.) or the Lawrence Hall of Science (Centennial Dr., Berk. www.lawrencehallofscience.org).

THE SIP AND SOAK SERIES

If you’re in the East Bay and you’d like to get your date a little drunk in the middle of the afternoon (and why wouldn’t you?), take them to the Takara Tasting Room (708 Addison, Berk., 510-540-8250, www.takarasake.com). The popular local sake company offers five different courses of sake tasting for a mere $5. And since sake has an average alcohol content of 15 percent (that’s 3 times more than most beers), you can get a pretty nice buzz going. If you want to continue on a more pampering route, then head over to Piedmont Springs (3939 Piedmont, Oakland 510-652-9191, www.piedmontsprings.com) for a little soak in a rustic redwood tub. Sure, you could do the whole candle-lit bath thing at home, but who wants to spend the next day cleaning up puddles, soap rings, and melted wax when you could, well, not? Piedmont Springs offers private outdoor tubs ($15), saunas ($13), and their popular combination room ($20). And if you’d like to plan a little sip-and-soak series in SF, check out the Valentine’s Day lineup at the San Francisco Brewer’s Guild’s Beer Week 2010 (www.sfbeerweek.org/feb14). Then once you’re nice and drunk, head to one of SF’s more affordable spas: Kabuki Springs & Spa (1750 Geary, SF. 415-922-6000, www.kabukisprings.com), or Imperial Day Spa (1875 Geary, SF. 415-771-1114, www.imperialdayspa.com). Side note: please remember that hot-tubbing while inebriated is not the safest thing to do, so be smart about it. Drowning does not a romantic Valentine’s Day make.

FREE FLASHMOB FLIRTING

If it’s nearing the evening and you’re still seeking a last-minute hookup, the best (and strangest) place to look would be the Great San Francisco Pillow Fight (Embarcadero, SF. www.pillowfight.info), held annually in Justin Herman Plaza. When the Ferry Building clock strikes 6 p.m., grab a pillow you’re willing to destroy and start some feathery flashmob chaos. If you’re not familiar with the term “flashmob,” Wikipedia (that ever-reliable source of real information) defines it as “a large group of people who assemble suddenly in a public place, perform an unusual action for a brief time, then quickly disperse.” If all goes well, you’ll go home afterwards, sweaty and covered in feathers, and perform more unusual acts with your newfound Valentine.

Progressives should care about pension reform

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Progressives should care about pension reform

OPINION In today’s failing economy, with double-digit unemployment and huge government deficits, progressives have a strong interest in ensuring that San Francisco’s pension system remains viable.

After years of working and contributing a percentage of their income to a pension fund, city employees receive a guaranteed annual pension based on an employee’s years of service and his or her pay level at retirement. In the private sector, most employees participate in a 401(k)-type of retirement plan, in which the pension is based on the amount contributed to the fund.

Under the city charter, the city is only required to pay into the pension fund when its liabilities exceed its income. When the fund loses money, as it has in recent years, the city is required to make up the difference.

In 2005, investments losses brought the fund below the break-even mark, requiring the city to pay $175 million in retiree pension and health premiums. Today, that number has grown to $525 million — an increase of 200 percent. Two years from now, in 2013, the amount will grow to $675 million, eclipsing what it costs to run San Francisco General Hospital for one year.

While headlines reporting pensioners who receive $100,000 or more raise the public’s ire, most retired city workers receive modest pensions. Still, there are abuses to the pension system that must be eliminated. A recent civil grand jury report found that some police and firefighters engage in pension “spiking” by promoting employees in their last year of service to increase the amount of their pensions. That practice has cost the city $132 million.

The question of how to address the city’s growing pension liability is now before the Board of Supervisors. A proposed charter amendment would change the contribution levels for police and fire employees hired after July 2010 from 7.5 percent to 9 percent and base pensions on the last three years of the employee’s salary to reduce pension spiking.

Some argue that the measure unfairly targets labor and city workers by eliminating pension formulas that have been used for decades. But with the city’s $522 million budget deficit, if San Francisco’s pension problem isn’t fixed, escalating pension costs will ultimately force city officials to confront this choice: make huge service cuts and layoffs or be unable to meet the city’s retirement obligations to its retired workers. That’s why we have to act now.

Other pension funds have faced this reality. One San Francisco union leader whose fund is paid by its workers told me that his union voted to reduce future pension benefits while increasing the amount of employees’ contributions. “It was a bitter pill, but we knew we had to do it,” he said.

The proposed charter amendment doesn’t go this far and only has a minimal impact on the city’s present pension liabilities since it only changes contribution levels for future employees. However, if the amendment reaches the June ballot, these modest reforms should not become a wedge issue.

Having a sustainable pension fund that protects the futures of workers without bankrupting the city is a progressive value. Progressives should also support ending pension abuses that only benefit a small number of workers at the expense of taxpayers and other workers who contribute to the fund. Pension reform is one step, among others, that must be taken to restore San Francisco’s fiscal stability.

Jeff Adachi is San Francisco’s public defender.

Building the movement

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Building the movement

Frustrated by deep cuts to education spending and quality, momentum is building across California in support of the “Strike and Day of Action to Defend Public Education” on March 4.

Students, laborers, and faculty throughout the University of California system are trying to expand on last semester’s organizing efforts by strengthening ties to groups from all tiers of the public education system. But questions linger about the best way to proceed and what exactly the event should look like.

“I think that the regents and [UC President Mark] Yudof are very fearful of what would happen if the students and workers united. They could be unstoppable,” said Bob Samuels, president of the University Council-American Federation of Teachers (UC-AFT).

That collaboration is exactly what many grassroots organizers are hoping to achieve, although their central message is not limited to participants in the UC system alone. They argue that fee increases and cutbacks at the universities are symptomatic of a greater problem, namely the denigration of free and low-cost public education.

“This emerged as a movement of students and workers at the university level. What we’re doing now is going beyond the UCs,” said Blanca Misse, a graduate student and member of the Student Worker Action Team (SWAT).

By reaching out to members of preschool, K-12 public school, community college, and California State University communities, organizers hope to turn March 4 into a rallying moment for the entire public education system in the state. Organizers also want to ensure that the UC system isn’t funded at the expense of other institutions of public learning.

“We need to be fighting for money and political power,” Misse added. “The committees need to mobilize all of the fighting sectors and show them our strength.”

At the Jan. 17 meeting of the Berkeley March 4 organizing committee, one of many ad hoc groups set up across the state, a gathering of about 35 union members, graduate students, community activists, and undergraduates discussed what the day should look like locally. They also reported back on their attempts at organizing the local community, including garnering union support and reaching out to high school students.

Javier Garay noted that at a meeting of the Oakland Education Association, a union of public school workers, “89 percent of the nearly 800 attendees voted in solidarity with the March 4 Day of Action, possibly including a strike.”

Yet the most heated discussions centered on how to unite the interests and power of the university population behind the broader fight for public education funding.

During the meeting, Tanya Smith, president of the local chapter of the University Professional and Technical Employees union (UPTE), stressed the importance of “not being an ivory tower” by extending activism “beyond Berkeley’s campus and reaching out to the political center in Oakland.”

Student activist Nick Palmquist, a fourth-year development studies student at UC Berkeley, admitted that the “tuition issue” is a big motivating factor for college students. At the same time, he noted, “Students have a lot of potential to see the bigger picture. We’re trying to expand the consciousness of the movement.”

That movement stretches back to the beginning of the school year, when students realized that Yudof and the Board of Regents were planning on making up for the $814 million budget cut from 2008-09 and the additional $637 million cut in 2009-10 with layoffs, furloughs, and a possible fee hike.

On Sept. 24, 2009, groups organized strikes and walkouts across the University of California system, including an estimated 5,000-person protest in the legendary Sproul Plaza at UC Berkeley.

Exactly one month later, several hundred people gathered on the Berkeley campus for the Mobilizing Conference to Save Public Education. According to the invitation, the purpose of the conference was “to democratically decide on a statewide action plan capable of winning this struggle, which will define the future of public education in this state, particularly for the working-class and communities of color.”

After an intense day of discussion, the body voted to establish March 4 as a “statewide strike and day of action.” Though it remains unclear how the different interests would come together (the call left demands and tactics open for debate), the message was clear: to save public education, diverse groups need to stand together cohesively.

Tensions escalated dramatically in November when the regents approved a 32 percent fee increase. At UCLA, where the regents held the meeting, an estimated 2,000 students gathered in demonstration and protest.

UC Berkeley student Isaac Miller told the Guardian, “I think we left there feeling like even though the fee increase went through, this is a long-term fight. It was really empowering to connect to students from all over the UC community.”

Meanwhile, a three-day protest at UC Berkeley culminated in a day-long occupation of Wheeler Hall on Nov. 20. As the protesters outside multiplied in support of the occupiers, they expressed solidarity with their causes as well as anger at the fee hike.

Callie Maidhof, a graduate student and spokesperson for the occupiers, said at the time, “One of the reasons behind this particular action is that students realized that not only is the state an unreliable partner, so is the administration. The only thing students can do at this point is reach out to each other.”

Maidhof was referring to a frequently repeated refrain from the regents and Yudof: “The state is an unreliable partner.” They argue that their hands are tied by the budget shortfall and the UC system has to figure out ways to sustain itself apart from increasingly erratic state funding. “The message is if the state fixes the budget, all our problems will be over,” said Mike Rotkin, mayor of Santa Cruz and a former lecturer at UC Santa Cruz.

So when a Jan. 21 San Francisco Chronicle article (“Regents to Back UC Students’ Protest at Capitol”) reported that the regents and Yudof agreed to stand alongside the students in Sacramento on the March 4 Day of Action, many were shocked and angered. “This is a complete turn-around for them,” Palmquist said. “They were never in support of our efforts. But now they feel threatened and they also feel like they can capitalize on them.”

In an open-letter response, several unions wrote back: “This is a cynical publicity stunt, and we do not buy it.”

Victor Sanchez, president of the UC Students Association (UCSA), said the article misrepresented what Yudof and the Regents said. “The regents and Yudof agreed to participate with students on a separate March 1 day of activism, not March 4,” he said. Calls and e-mail to Yudof’s office to confirm were unreturned at press time.

Sanchez explained that the March 1 activities are the culmination of UCSA’s annual Student Lobbying Conference, which takes place in Sacramento from Feb. 28–March 1. Its actions focus primarily on lobbying the Legislature. That approach is more in tune with the administration’s message that the problem lies in Sacramento.

UCSA’s demands include increasing funding for higher education by $1 billion, creating alternative sources of revenue through comprehensive prison reform, preserving the California grant program, and passing Assembly Bill 656.

Sponsored by Assembly Majority Leader Alberto Torrico (D-Fremont), AB 656 would place a severance tax on oil companies and divert revenues toward higher education. “It is strategic for us to focus resources in Sacramento, because that’s where the negotiations are happening,” Sanchez said. “But we also understand that we’re fighting a two-front war and need to hold both the Legislature and the administration responsible.

“At the end of the day, it is our event and our day of action,” he continued. “We made it clear we aren’t going to change our demands. We stand in solidarity with the March 4 organizers. We’re all advocating a common goal, and folks are going to apply complementary pressure. Our end goal is prioritizing education, and we need to move forward with that collective mentality.”

If all this seems confusing, that’s because it is. The groups that have formed in reaction to cuts to public education are numerous, amorphous, and have slightly different agendas. Some subscribe to the position that the fault and solution primarily rests in Sacramento, while others argue that the administration and appointed, rather than elected, regents are to blame. Most agree with Sanchez that both are part of the problem.

As community organizers build toward March 4, it is clear that the day will be significant. The real question is, if students can maintain their momentum and their newfound network with other sectors of public education, what will happen on March 5 and beyond?

Hollywouldn’t

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Hollywouldn’t

FILM In its 12th year, is the San Francisco Independent Film Festival entering awkward adolescence? One sign of growing pains, or maybe just a hankering to rebel, is its inaugural Winter Music Fest, which wraps up a week of shows Thurs/4, the same day films begin unspooling. Its lineup of variably notable local bands probably appealed to fans of the Mission Creek Music Festival and Noise Pop. But I gotta ask: doesn’t this town already have enough indie-rock festivals?

It sure has enough film festivals. IndieFest, for example, umbrellas over the summertime Another Hole in the Head horror fest (named, ironically, to mock the overabundance of fests in SF) and the autumn DocFest. I can see the need, I suppose — there’s a lotta independent horror that’s worthy of notice (IndieFest 2008 was one of the first platforms for Paranormal Activity, a micro-budget effort that became a huge mainstream hit in 2009.) Last year’s DocFest unleashed Cropsey, one of the best (if least-seen) true-crime tales in recent memory. In a time when even Hollywood is struggling, outlets like IndieFest provide crucial exposure for work made outside the system, often by first-time filmmakers working with meager funds. This year all the films screen at the Roxie, hardly a flashy venue. Seeking gloss at IndieFest? Maybe someone’ll dress up in Maude’s Viking fantasywear at the annual Big Lebowski party.

So, it’s a low-key festival, infused with DIY spirit, created by film lovers for film lovers. And they’ve been at it for over a decade. I dig that. Usually, I can find a handful of films to pimp in fest-preview articles like this, but to be truthful, 2010 proved a little challenging. (Give Godspeed a pass, for instance.) Closing-night film Harmony and Me, directed by Bob Byington, stars Justin Rice (who’s in indie-rock band Bishop Allen, and who I quite liked in Andrew Bujalski’s 2005 Mutual Appreciation). It reminded me of a lo-fi, quirkier, less art-directed (500) Days of Summer (2009), with its emotionally clueless lead character and breakup theme. It also inspired a breakup of my own: mumblecore, I wanted to like you. I’ll always embrace Bujalski’s films, especially 2002’s Funny Ha Ha. But it’s over. (Please don’t make a stridently poignant, chatty, self-consciously witty movie about our relationship.)

Exponentially more inspiring is local documentary Corner Store, Katherine Bruens’ portrait of Yousef Elhaj, who runs a liquor store at 15th and Church streets in the “Mistro” (as one neighborhood interviewee dubs it, because it’s neither Castro nor Mission). For 10 years, Elhaj, a Palestinian Christian, has lived at his store, carefully tidying the aisles and charming all who enter. He’s patiently saving money and waiting out the incredibly long paperwork process, first of getting his own green card, then of arranging for his family to come to San Francisco. Much of Bruens’ film takes place in Bethlehem, where Elhaj travels to visit his family (including a teenage son who’s not sold on the idea of uprooting to America). More than just a one-man story, Corner Store uses Elhaj’s journey to explore life in modern-day Palestine, leaving both grim and joyful impressions.

Also worth checking out: The Art of the Steal, Philadelphia documentarian Don Argott’s absorbing look at the Barnes Collection, a privately-amassed array of post-Impressionist paintings (including 181 Renoirs) worth billions — and the many people and corporate interests that schemed to control it. This film opens theatrically in March, justifiably. Fans of The Class (2008) shouldn’t miss West of Pluto, a Quebec-set, semi-improvised peek into the secret lives of teenagers. And surely there are more winners that my jaded ass hasn’t managed to see yet. Isn’t that always the fun of IndieFest — digging up those sparklers in the rough?

SAN FRANCISCO INDEPENDENT FILM FESTIVAL

Feb 4–19, most shows $11

Roxie Theater

3117 16th St., SF

www.sfindie.com

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