Chamber of Commerce

Will downtown go after IRV?

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By Tim Redmond

Interesting meeting at the Chamber of Commerce office yesterday. In attendance, I’m told by a good source, were Chamber CEO Steve Falk, Senior Vice President Jim Lazarus, Nathan Nayman from the Committee on JOBS, Pamela Brewster, vice-president for government affairs at Charles Schwab, Wade Rose, vice president at Catholic Healthcare West, and some other downtown types.

Among the topics: A campaign to repeal the city’s Ranked-Choice Voting system.

Downtown has never liked RCV, also known as Instant Runoff Voting. The Chamber and Committee on JOBS folks also dislike the fact that they’ve gotten their butts kicked in the past few supervisorial elections — and instead of finding better candidates, or recognizing that the electorate really isn’t interested in a pro-corporate Republican-style agenda, they’ve decided to go after “the system.”

I couldn’t reach Falk today, but Lazarus called me back. He said the Chamber had polled this year on both district elections and IRV, and found (no surprise) that the public loves district elections, and that trying to return to a citywide system was a nonstarter. And while support for IRV was also strong, the voters, according to the Chamber poll, would be willing to consider direct runoffs between the top two finishers if the voting were all done by mail.

That, presumably, would keep the cost down and the turnout up.

“The Chamber has always been in favor of direct runoffs,” Lazarus told me. That allows the top two candidates to directly address their differences on the issues. With multiple candidates in the race, the issues aren’t well defined.”

Steve Hill, who works at the New America Foundation and was one of the architects of IRV in San Francisco, pointed out that direct runoffs have been tried in San Francisco. “That what we used to have,” he told me. “And we saw regular attack ads and nasty campaigning. The Ethics Commission found a four-fold increase in independent expenditures during direct runoffs.”

In other words, direct runoffs allow groups like the Chamber and its allies to dump huge amounts of money into negative campaigns in a short election period. “Getting rid of IRV is a vote to empower special interests,” Hill said.

Lazarus told me he’s not sure what the next steps would be, and whether the Chamber would push a Charter Amendment campaign to repeal IRV. “We’ve talked about it,” he said. “That’s all.”

A bailout for the middle class

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OPINION I don’t need to remind you that our economy is in trouble. The current banking crisis has demonstrated to all of us just how fragile and susceptible to manipulation our current system is. President Obama has spent billions of dollars and untold hours trying to bail out our failing banks and financial institutions. Whatever your opinions about his efforts, I think we can all agree we should also be helping out American workers — the real engine of the economy. The Employee Free Choice Act, currently being debated in Congress, offers needed help.

In 1979, 23 percent of the American workforce earned the inflation-adjusted equivalent of $20 an hour. This level of pay, about $41,000 per year, is generally considered the minimum necessary for a family of four to live something like a middle-class lifestyle. I wish I could say that progress marched on, that every year after 1979 the percentage of workers earning the minimum to support a middle-class family grew. In fact, the opposite happened — today only 18 percent of American workers earn enough to support a family of four.

What happened to the other end of the spectrum during that time? In 1978, American CEOs earned 35 times what the average worker earned. Over the next 10 years, this ratio grew, so that in 1989 the average CEO was earning 71 times what the average worker was earning. By 2007, the ratio had grown to an unbelievable 275.

The causes of this imbalance are many, but one is declining labor union membership. In 1983, 17.7 million workers were members of unions, accounting for 20.1 percent of America’s workers. In 2008, only 16.1 million workers were unionized, accounting for 12.4 percent of our nation’s workforce. These numbers are critically important because union membership makes a large difference in the well-being of America’s workers. In 2008, the average union worker earned $886 a week, while the average nonunion worker was paid only $691.

With all the effort we’re putting in to a bailout of the banks, we need to be discussing a bailout of the middle class. We don’t have to wait for the Treasury Department to come up with the plan — it’s sitting there in Congress and is called the Employee Free Choice Act. The bill would give workers a fair, direct route to forming a union without illegal interference from corporations.

Unfortunately, the middle-class bailout is stuck in Congress. The U.S. Chamber of Commerce and the other shills for mega-corporations have turned up the pressure and succeeded in preventing the Employee Free Choice Act from moving forward in the Senate. Our own Sen. Feinstein recently said she wouldn’t vote for the bill because of the economic downturn, even though she cosponsored the legislation last year.

With the current state of our economy, we need a middle-class bailout — and we need it soon. Feinstein has the ability to make that happen. She should deliver the one bailout we all really need. *

Debra Walker is a San Francisco artist and progressive activist.

FOR THE RECORD


The caption for last week’s dine review should have referred to Fly, not Terzo.

If Manheimer is SF’s next top cop, will Newsom push Villa-Lobos in D6?

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frt_chief_manheimer.jpg
Is this the face of San Francisco’s next top cop?

Text by Sarah Phelan

Back in February, I asked mayoral spokesperson Nathan Ballard if San Mateo police chief Susan Manheimer was Newsom’s top pick to replace SFPD Chief Heather Fong.

I asked because the Community Leadership Alliance was promoting Manheimer hard and seems to have the insider edge within Camp Newsom.
(CLA lists the Chamber of Commerce’s Rob Black—Newsom’s unsuccessful pick to replace D6 Sup. Chris Daly in 2006—as honorary Chair, Scott Caroen as Chair, Troy Hammer, David Muhammad, Christopher Rosas and Joseph Alioto Veronese and Angela Alioto as advisers, and David James Villa-Lobos as director.)

Ballard’s reply, which I included in the Guardian’s story about San Francisco’s dysfunctional public safety system, was that, “It would be wildly premature to comment on the Mayor’s preference for police chief at this time. “

This was of course before Fong demoted veteran police office Greg Suhr to captain, before the domestic violence victim whose case was used to demote Suhr claimed that Suhr’s actions saved her life, various other candidates had their names leaked to the press, and before the Examiner’s Ken Garcia accused Fong of trying to burn down the whole department.

But now the Chronicle is claiming that Manheimer could very well be SF’s next top cop, because she spent 16 years in the SFPD before heading to San Mateo, the powerful SF Police Officers Association feels it can work with her, and the choice will allow Newsom to appear to be choosing a department outsider.

Suhr, Deputy Chief Kevin Cashman, and Pasadena Police Chief Bernard Melekian, are reportedly still in the running.

Meanwhile, I’m left wondering if Newsom is going to back CLA director Villa-Lobos for D6 in 2010, becausethe two are photographed posing together on CLA’s website and the group seems to have its finger on Newsom’s pulse.
david__gavin_3.7201807.jpg
David James Villa-Lobos poses with MGN

Shop local, City Hall!

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news@sfbg.com

On Dec. 3, 2008, just before noon, Mayor Gavin Newsom arrived at a press conference in Noe Valley to remind city residents why it’s important to shop locally. The mayor climbed out of his shiny new hybrid SUV, walked into the Ark Toy Company, showed charts and graphs, and talked about how money spent in town helps the local economy. Joined by Steve Falk, president of the San Francisco Chamber of Commerce, Newsom urged holiday shoppers to look first in San Francisco before buying something on the Internet or in some suburban mall.

The mayor’s shop-local press conference was a clear sign that the debate over the role of small business in the San Francisco economy is over. Everyone from the mayor’s business advisors to the Chamber of Commerce to small business advocates and progressive economists now agrees that small local businesses provide the vast majority of the jobs, keep their money in town, and generate more tax dollars, more wealth, and more prosperity for this city than the big out-of-town chains.

It was a picture-perfect scene, until KPIX-TV reporter Hank Plante asked the mayor an embarrassing question: Why, he wanted to know, did the Mayor’s Office buy Newsom’s new car in Colma?

Newsom said he didn’t have a clue.

Actually, the reason was pretty simple: the dealership in Colma submitted the lowest bid. But San Francisco lost out on the sales tax, a local Chevy dealer that was going out of business lost a local sale, San Francisco workers lost a commission — and in the end, the city almost certainly lost more on the deal than it saved with the Colma discount.

That’s the untold story behind the mayor’s promotion. San Francisco, as a buyer of goods and services worth hundreds of millions of dollars a year, does a terrible job at shopping local. Indeed, for years small business advocates have been trying to get city officials to make it easier for local merchants to get city contracts — and they’ve made very little progress.

"I’ve worked so hard on this, year after year, and nothing ever happens," Scott Hauge, a small business activist and organizer, told us. "After a while, I just threw in the towel."

Hauge is devoting his energy these days to statewide issues. But on the local level, there’s a growing sense that the city needs to do more to help small local businesses get their share of the massive public spending pie.

"The Small Business Commission has made it clear that this will be a priority over the next year," Regina Dick-Endrizzi, the commission’s acting director, told us.

Nobody knows exactly what percentage of city contracts for goods and services go to local businesses. Hauge said the Mayor’s Office did a limited survey about a year ago, but the data wasn’t very good. And while Newsom signed an executive order in 2005 directing departments to look for ways to patronize local businesses, there’s not much to show for it.

"I think probably less than 10 percent [of city spending] goes to local businesses," Hauge said.

Board of Supervisors President David Chiu, a former small business commissioner, agrees. "I think it’s accurate to say that at least 70 to 90 percent of all city contracts go to out-of-town businesses," he told us.

As Dick-Endrizzi pointed out, city purchasing has strict rules — and for good reason. "In most cases, you have to put out a request for proposals and take the lowest bid," she said. "If you didn’t have that, you’d have a big problem with favoritism."

But when the lowest bid is the only criterion, San Francisco businesses are at a distinct disadvantage.

"Say a city agency wants to buy five hammers," said Steven Cornell, owner of Brownie’s Hardware. "I have the hammers for $6, but somebody in Nowhere, Miss., can sell them for $5.99.

"Well, the shop in Mississippi doesn’t have to pay San Francisco’s minimum wage, doesn’t have to pay for sick days, doesn’t have to pay for health care … We’ve asked businesses to contribute to all these good social policies, then those businesses get penalized because someone else can sell something cheaper."

Cornell — who says he agrees that local businesses should pay well and give their workers benefits — is frustrated that when it comes to purchasing, the city doesn’t give anything back. "We lost S&C Ford, we lost Ellis Brooks Chevrolet," he said. "Those were all union jobs, with good benefits. And how many cars did the city buy from them?"

When Cornell was on the Small Business Commission, he remembered some small locally owned cabinet-making shops came to complain about a $4 million city contract for woodwork. "They told us that they lost the contract to a Canadian firm," he said. "The costs of operating in San Francisco were higher than in Canada, so they couldn’t compete."

"We do not as a city reflect the fact that we ask employers to do good things for their workers," Chiu added. "When we spend perhaps $1 billion a year in city contracts, those employers don’t have a level playing field."

Sure, on the surface and in the short term, the city gets a better deal when it awards contracts based entirely on price. But San Francisco has, as a matter of public policy, already decided there are good reasons to give minority-owned contractors some advantage in bidding, and that public contractors should pay prevailing union wages and offer benefits to domestic partners. Local enterprises get a modest advantage in some bids, but nowhere near enough to make up for the cost difference of operating in San Francisco.

And as Newsom himself has made clear, spending money locally has a long-term economic benefit that almost certainly outweighs the price differential in most bids. "When Newsom bought his car in Colma, the city lost the sales taxes, and lost the multiplier effect of the money being spent in town," Cornell noted.

In fact, a 2007 study by Civic Economics, sponsored by the San Francisco Locally Owned Merchants Alliance, showed that if city residents shifted just 10 percent of their purchasing from national chains to locally-owned businesses, the city would gain 1,300 new jobs and $200 million in economic activity every year.

Imagine the activity — the positive benefits to the local economy — that would come with the city shifting, say, 25 percent of its spending to local businesses.

Obviously the city can’t buy everything in town. "Nobody in San Francisco makes Muni trains," Cornell noted. But a lot of what city departments buy, from hammers and paper to cars and trucks, is available from local suppliers — or could be. "If the city made it known it was looking to buy something locally, some entrepreneur would come along and figure out a way to supply it," Cornell said.

So how could this work on a policy level? It’s not that complicated. The city controller, or the Human Rights Commission, which oversees contracting policy, could devise a formula showing how much the cost of complying with city laws like the minimum wage, health care, and sick days (laws that most of us, and many small businesses, fully support) drives up the cost of doing business in San Francisco. Then give local merchants an equivalent advantage in the bidding process.

In other words, if the hammers at Brownie’s Hardware cost 25 cents more than the hammers in Nowhere, Miss., because Cornell pays for his workers’ health insurance, he should only have to come within 25 cents of the cut-rate suppliers’ price to get the city’s business. And if the taxpayers have to fork over a few cents more to buy local hammers, the money will come back, and more, from the demonstrated benefits of shopping locally.

Chiu thinks that’s a good idea, and he’s already taken the first steps to forcing the city to shop local. Chiu introduced legislation in April requiring the city to set aside a portion of all contracts for locally-wned businesses and to increase the financial advantage local firms get in bidding.

And at Chiu’s request, the HRC will appear before the supervisors Land Use Committee May 11 to present the latest data on how much city spending goes to local businesses. "I’ve been asking for this for two years," Chiu said.

"It is unwise for our city not to take $1 of public money and give it to a local business that will pass that dollar onto its local employee, who will then spend it at another local business," he added. "The multiplier effect of this is that money spent locally is better for the economy, and for the taxpayers."

Editor’s Notes

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Tredmond@sfbg.com

The first time the Guardian made an issue of the role small businesses play in the local economy, official San Francisco freaked out.

It was 1985, and only a handful of people were talking about sustainable local economies, about the connection between environmentalism and community-based economics, about how malls and chains stores were ruining America, and how spending money locally would create more jobs, with less waste of energy, than shopping at Wal-Mart or Home Depot.

The Guardian hired MIT economist David Birch to produce a study on job generation in San Francisco. His conclusion: small, locally-owned, independent businesses generated the vast majority of jobs in San Francisco. That directly contradicted the fundamental thesis driving city planning at the time; the planners and the mayor (Dianne Feinstein) argued that high-rise office development was the city’s prime source of new jobs.

The day the study came out, the city planning director (Dean Macris) called in his senior staff and directed them to work all weekend poring over our study and trying to figure out how to discredit it. Feinstein ignored us. The supervisors continued to allow high-rises to sprout, damaging small business and the local economy. The Chamber of Commerce was so disdainful of small business that a group of Fisherman’s Wharf merchants quit in disgust.

Today that battle is over. Done. The argument isn’t even an argument anymore. Everyone, from Mayor Gavin Newsom and the Chamber on down, agrees that locally-owned businesses are the lifeblood of the San Francisco economy. The mayor goes around urging people to "shop local."

But as we suggest in this special issue on San Francisco small business, the city itself isn’t doing such a great job at that. In fact, the public sector in general has been trained for so long to do business with the lowest bidder that the role a major institution like the city and county of San Francisco can play in boosting the local economy has gotten lost.

A 2007 study sponsored by the San Francisco Locally Owned Merchants Alliance shows that if local residents shifted just 10 percent of their purchases from big chains to local businesses, the city’s economy would pick up $200 million and 1,300 new jobs a year. Imagine if City Hall, BART, state agencies, the school district — every public sector agency in this city — did the same. *

No balance in two-year budget

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OPINION There’s no more important decision made by the Board of Supervisors than that of the city’s annual budget. Every year the board sets the city’s priorities by appropriating more than $6 billion. In good economic times, the board uses the budget process to set new policy directions for San Francisco. In bad times, the annual budget is the board’s only real chance to save vital services by making targeted appropriations while strategically reducing other parts of the budget.

That’s why a charter amendment to have only biannual budgeting is a bad idea.

The fact that a two-year budget is being pushed by the Newsom administration and the San Francisco Chamber of Commerce should give progressives pause. Unfortunately, downtown forces have successfully used the worst budget year ever to woo some progressive budget stakeholders.

Their argument sounds good on its face. A multiyear budget would help smooth out the highs and lows, requiring City Hall to deal with pending fiscal emergencies sooner. It would also mean every other year off from having to spend all that energy turning people out to endless budget meetings and lobbying to save the programs we care about.

But the way a two-year budget would actually play out would mean that progressive budget stakeholders would have only half the opportunities for budget input through the generally more responsive Board of Supervisors. Meanwhile, the Mayor’s Office would be able to centralize more power without having to get annual approvals from the board. In other words, a two-year budget would make the Office of Mayor even more insulated from the public and members of the board on the decisions that affect us the most.

Additionally, two-year budgets would be unwieldy and inaccurate. Over the past nine years of out-year projections by the Controller’s Office, the average difference between the projected and actual surplus or deficit was nearly $250 million. For example, last year the controller estimated our 2009-10 budget deficit would be about $46 million. This year it’s pegged at $438 million. Of course, as our real revenue data comes in, this number will surely change again. Unfortunately, we won’t know how much revenue we received for this upcoming budget year until we are a month or two into the following fiscal year.

There are serious flaws with our annual budget process. In difficult years, the mayor has too much unchecked power to make mid-year budget changes. Earlier this year, Mayor Gavin Newsom enacted a $118 million budget package that included tens of millions in health and human service cuts and more than 400 layoffs without approval of the Board of Supervisors. Meanwhile, when a majority of board members voted to cut pork from the mayor’s budget, he was able to avert that cut with his veto pen.

Leaving the decision about millions of dollars’ worth of service cuts in the middle of the year turns the democratic budget process — with checks and balances between the mayor and board — on its head. Correcting this problem with the current budget process would surely be a worthwhile effort.

Meanwhile, we must stay focused on this year’s budget process to preserve as many of the vital services as we can. *

Sup. Chris Daly represents District 6. Ed Kinchley is a labor activist.

 

Leno picks up single-payer campaign

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By Tim Redmond

State Sen. Mark Leno has taken on the long campaign to enact single-payer health reform in California. He’s announcing tomorrow (Wed) morning that he’s introduced SB 810, which follows (and is nearly identical to) SB 840, the landmark measure by former Sen. Sheila Kuehl that passed the Legislature and was vetoed by the governor.

The bill is remarkable in its simple premise: Everyone — consumers, businesses, government — will save money if the public sector takes over the role of providing health care from the private insurance industry. “We don’t have a health-care policy right now,” Leno told me. “We have a risk-management policy. When the private insurers talk about paying for health care, they cal lit a ‘medical loss.'”

By Leno’s estimates — and those of about every other credible analyst and study — businesses would see lower costs, individuals would pay lower premiums and the state would spend less on health care if only the insurance industry were out of the picture.

“We pay more for health care than any other industrialized country, and we get worse outcomes,” he said. “The system is broken.”

But it won’t be easy. Leno is confident that SB 810 will pass both houses of the Legislature — and that the governor will once again veto it. “And that’s why we need to make sure we elect a Democratic governor in 2010 who will promise to sign this bill in 2011,” he said. “And we need to start organizing now to defeat the referendum the insurance industry will put on the ballot in 2012 and the hundreds of millions of dollars they will spend to confuse Californians.”

In other words, it’s a long-term battle. I wonder if any of these business groups like the California Chamber of Commerce will come to their senses and recognize that this is about the most pro-business thing you could do in this state. Health-care costs are slamming small businesses, hurting our ability to compete as a state and a nation — and the entire economy of California is more important than the profits of one industry.

We shall see.

The wheels come off

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› sarah@sfbg.com

Criticism of Mayor Gavin Newsom’s handling of the city’s budget crisis has intensified since the mayor refused to attend consensus-building sessions at City Hall, instead choosing to promote his gubernatorial bid and push a flawed "local economic stimulus package" that will only make the deficit larger.

The wheels began to come off Newsom’s public relations machine when news hit that Newsom refused to attend roundtables that board president David Chiu convened to discuss the city’s financial emergency. These meetings marked the first time business and labor leaders were brought together since the mayor announced the city’s $575 million deficit two months ago.

"I’ve asked the mayor to convene these meetings, but obviously that hasn’t happened," Chiu told the Guardian last week. "He has said he plans to convene them soon."

Insiders say Chiu was told that the mayor, his chief of staff, and his budget analyst will not attend the roundtables until a June special election is off the table, but that Newsom is open to considering revenue measures for a November election. As a compromise, Chiu proposed moving the election to late summer.

Mayoral spokesperson Nathan Ballard told the Guardian that the mayor has been holding a series of meetings with labor, business, elected officials, and community leaders on the budget, but Ballard hasn’t yet fulfilled the Guardian‘s Sunshine Ordinance request for details and documents connected to those meetings.

"Some of those meetings have included Supervisor Chiu and other supervisors," Ballard said. "However, the mayor is not scheduled to attend meetings about a summer special election to raise taxes, which he opposes."

That position places Newsom squarely with the business community, which continues to maintain that it is too early to develop revenue measures and that structural budget reforms should be considered first.

On Jan. 29, Steve Falk, executive director of the San Francisco Chamber of Commerce, wrote to Chiu that "Any action to call a special election without the specifics of proposed tax measures and Charter amendments would be premature and doomed to failure. City government can take steps that either help to stimulate a quick recovery or, through the wrong actions, extend the downturn by placing greater burdens on local employers."

But labor groups believe that revenue boosts are necessary if San Francisco is to weather the economic tsunami, and that it’s unreasonable to demand that their members give back millions in negotiated pay raises while forgoing revenue options. These concerns, attendees report, are publicly aired at Chiu’s roundtables, and Newsom’s refusal to participate has left city workers feeling alienated.

"He wants Labor to come to the table, but the problem is, his whole approach is all stick and no carrot, all doom and gloom and no hope that there is revenue on the horizon," SEIU Local 1021’s Robert Haaland told the Guardian.

Noting that labor anticipates 2,500 layoffs in the coming year, on top of the 400 city workers who were laid off this month, Haaland said, "Our people provide frontline services. This is about the wheels of government coming off."

Sup. Bevan Dufty, who participated in Chiu’s roundtables with Sups. John Avalos and Sean Elsbernd, praised Chiu for bringing together stakeholders, even as he extended hope that Newsom will assume the leadership role. "It always helps to have people face-to-face," Dufty said. "David primed the pump, got people to start talking. I’m looking forward to the mayor taking it to the next level."

Dufty said Newsom was "disappointed with the board’s override of his veto [of the June special election], doesn’t see a June election working, and doesn’t understand why the board is reluctant to let it go…. But from our point of view, it’s hard to ask employees to give back $90 million in negotiated benefits if they are going to be laid off in three months anyway."

Falk, who represents almost 2,000 local businesses, wrote that "The business community recognizes that a $500 million budget shortfall can only be bridged through a combination of reductions in the size of city government, program consolidations, work-rule reforms, and new fees and revenues. However, any solution must be the product of discussions with all affected parties at the table. To date, these meetings have not happened."

Chiu replied to that letter by inviting key business and labor groups to his Feb. 8 City Hall roundtable. Attendees report that a productive dialogue ensued, and two days later, when the board overturned Newsom’s veto of its special election legislation, the impacts of that first roundtable were palpable.

"I respect the mayor’s perspective, but I believe that by getting on with the election, less damage will be done," Chiu explained as the supervisors pushed ahead with their plans to hold a special election this summer.

Elsbernd opposed the election but expressed frustration with the current situation: "The city is facing a multi-year problem. People are missing the big picture here. I don’t want to be part of brokering a deal that is simply going to be a Band-Aid. Let’s fix the problems now. "

"You could tell the impact of Sean having sat in on the discussions," Dufty observed. "Instead of ‘Get over it, this is the way it’s going to be,’ he understands that we have to work together."

Falk told the Guardian that he found Chiu’s roundtable "very productive."

"Everyone is feeling the pain of this recession," Falk continued. "People are losing jobs, businesses are losing sales, which results in layoffs, which results in a bigger strain on the city’s services. It’s all connected."

But he also noted that a special election on taxes requires a two-thirds vote. "That is a very difficult hurdle," Falk noted, "which is why we have to consider all the pieces, and as we do, the more we realize that June is out of the question."

Chiu continues to reach out to his critics, countering arguments that a special election will cost $3.5 million — and will be impossible to do by summer — with the observation that, done right, it could result in $50 million to $100 million in additional revenues and thereby spare some vital jobs and programs.

"We’re facing a $565 million budget deficit, so if we can raise $100 million, we’ll still have to cut $465 million. But it would save us from making the most painful cuts," Chiu said, noting he would support pushing the election to no later than Aug. 31 "if there were more firm agreement on elements of a plan that must include structural reforms, layoffs and wage concessions, and new revenues."

But Ballard said, "The mayor doesn’t support more revenue without real reform," while promising that Newsom would shortly announce "new cost-saving reforms."

Unveiled the next morning, Feb. 11, during a mayor’s breakfast with business leaders, Newsom’s so-called local economic stimulus package included more spending on tourism marketing, targeted reduction in the payroll and property taxes, a $23 million interest-free revolving loan program for local businesses, and tax relief for Healthy San Francisco participants. The package, which must be approved by the board, would actually increase the city’s budget deficit.

Chiu says he is open to discussing most ideas in Newsom’s economic stimulus package, but that he’s concerned about widening the deficit, telling us, "That is why this needs to be done in the context of an overall revenue package and not in a vacuum."

Money talks

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› news@sfbg.com

The economy’s a mess, and the housing crisis, financial meltdown, and skyrocketing unemployment rates have left a lot of San Franciscans short of cash. But the flow of big downtown money into political campaigns hasn’t slowed a bit.

In fact, a tally of all 2008 monetary and in-kind political contributions logged in the SF Ethics Commission Campaign Finance Database shows that even in the face of the worst financial crisis since the Great Depression, money spent on local political campaigns in the city swelled to a whopping $20.6 million. That grand total, which does not include loans or so-called "soft money" like independent expenditures, is higher than that of any previous year recorded in the Ethics database, which tracks campaign spending back to 1998.

A review of the entire database paints of picture of how influence money flows in San Francisco: Six of the top 10 donors over the past 10 years are big businesses and downtown organizations that promote the same conservative political agenda. The campaign cash often wound up in the same few political pots — a handful of supervisorial campaigns and some coordinated political action committees.

And despite spending ungodly sums of money, downtown lost more races than it won.

More than half the total money spent in 2008 came from one source: Pacific Gas and Electric Co., which plunked down $10.2 million last fall for the No on Proposition H campaign against the San Francisco Clean Energy Act. That November ballot measure, which lost under PG&E’s barrage, would have paved the way for public power, initiating a process to make the city the primary provider of electric power in San Francisco with a goal of 50 percent clean-energy generation by 2017.

The powerful utility wasn’t only the biggest spender last year — it claims the No. 1 slot on a list of all campaign contributions spanning from 1998 to 2008, which the Guardian compiled using Ethics data. PG&E dropped a juicy $14.7 million into local political campaigns over that period, beating out runner-up Clint Reilly by more than $10 million.

Below are brief introductions to the 10 biggest spenders, 1998-2008.

They’ve got the power. The colossal sums PG&E has forked over to influence ballot measures over the years puts the utility in a category all its own. SF isn’t the only municipality where the company has poured millions into defeating a public power proposal. In 2006, when Yolo County put measures on the ballot to expand the Sacramento Municipal Utility District (SMUD), which would have edged PG&E out of the service area, the utility spent $11.3 million to try and keep it from happening.

Pay to the order of Clint Reilly. Reilly, the former political consultant, now runs a successful real estate company. While his name routinely comes up on the roster of campaign contributors, he owes his status as No. 2 to his 1999 campaign for SF mayor, into which he poured some $3.5 million of his own money. "Most of the money we give is for Democratic candidates or progressive politicians, or neighborhood-oriented issues," said Reilly, who also served as president of the board of Catholic Charities.

Committee on really high-paying jobs? Third in line is the Committee on Jobs, a political action committee that aims to influence local legislation affecting business interests. The PAC is bankrolled in part by the Charles Schwab Corporation, Gap, Inc., and Gap founder Don Fisher — all of whom surface on their own in our Top 30 list. With a grand total just shy of $3 million, the committee coughed up about $100,000 in campaign-related spending in 2008. Much of that funding went to similar political entities, including the SF Coalition for Responsible Growth, the SF Chamber of Commerce 21st Century Committee, and the SF Taxpayers Union PAC (see "Downtown’s Slate," 10/15/2008). This past November, the COJ also backed the Community Justice Court Coalition, formed to pass Proposition L, which would have guaranteed first-year funding for Mayor Gavin Newsom’s small-crimes court in the Tenderloin. Prop. L failed by 57 percent.

Bluegrass billionaire. San Francisco investment banker and billionaire Warren Hellman has dropped nearly $1.2 million over the years into local political campaigns, our results show. Dubbed "the Warren Buffet of the West Coast" by Business Week for his sharp financial prowess, Hellman co-founded Hellman and Friedman, an investment firm, in 1984. Hellman is known for putting on Hardly Strictly Bluegrass, an annual SF music festival. While he tends to contribute to downtown business entities such as the Committee on Jobs and the Golden Gate Restaurant Association, in 2008 he devoted $100,000 to supporting a June ballot measure, Proposition A, that increased teacher salaries and classroom support by instating a parcel tax to amp up funding for public schools.

Fisher king. Don Fisher, founder and former CEO of Gap, Inc., is another one of SF’s resident billionaires. While Gap, Inc. turns up in 17th place in our results, Fisher himself has poured more than $1.1 million into entities such as the Committee on Jobs, SFSOS, the San Franciscans for Sensible Government Political Action Committee, and other conservative business groups. Fisher’s total includes money from the "DDF Y2K family trust," a Fisher family fund that shows up in Ethics records in 2000. In that year, $100,000 from that trust went to support the Committee on Jobs’ candidate advocacy fund, and another $40,000 went to a pro-development group called San Franciscans for Responsible Planning.

Not a very affordable campaign, either. Sixth up is Lennar Homes, the developer behind the massive home-building project at Hunters Point Shipyard, which the Guardian has covered extensively. The vast majority of its $1 million reported spending was directed to No on Prop. F, a campaign sponsored by Lennar to defeat a June ballot measure that would have created a 50 percent affordable-housing requirement for the Candlestick Point and Hunters Point Shipyard development project. The measure failed, with 63 percent voting it down.

Chuck’s bucks. Charles Schwab Corp., which set up shop in San Francisco in the mid-1970s, is an investment banking firm that reports having $1.1 trillion in total client assets. The corporation ranks seventh in our Top 30 list, with some $973,000 in donations. In 27th place is Charles R. Schwab himself, the company’s founder and chairman of the board (and the guy they’re referring to in those "Talk to Chuck" billboards posted all over SF). If Schwab’s individual and corporate donations were combined, the total would be enough to bump Warren Hellman out of fourth place. Schwab’s dollars are infused into the Committee on Jobs, the San Francisco Association of Realtors, the Golden Gate Restaurant Association, SF SOS, and other downtown-business interest organizations. "We’re a major company here in the Bay Area and a major employer," company spokesperson Greg Gable told the Guardian. "We’re interested in political matters across the board — it’s not limited to any one party." But it’s limited to one pro-downtown point of view.

The brass. The San Francisco Police Officer’s Association is another major player, spending some $913,000 since 1998 on political campaigns. The organization backed candidates Carmen Chu, Myrna Lim, Joseph Alioto, Denise McCarthy, and Sue Lee for supervisors in 2008, contributions show. All but Chu lost.

At your service. SEIU Local 1021 and SEIU 790 crop up frequently in Ethics data, with a grand total of about $860,000 in spending over the years. SEIU representatives recently turned out en masse at a Board of Supervisors meeting to urge the supervisors to support a June 2 special election to raise taxes in order to boost city revenues and save critical services from the hefty budget cuts that are coming down the pipe.

Friends in high places. No real surprises here: the Friends and Foundation of the San Francisco Public Library contributed its money to, well, ballot measures that would have affected the library. In 2000, for example, the F and F plunked $265 thousand into an effort called the "Committee to Save Branch Libraries — Yes on Prop. A."

Top 30 San Francisco campaign donors, 1998-2008

1. Pacific Gas & Electric $14,831,486
2. Clint Reilly $4,138,089
3. Committee on Jobs $2,970,857
4. Warren F. Hellman $1,191,970
5. Don Fisher (incl. Don & Doris Fisher Y2K trust) $1,164,286
6. Lennar Homes $1,002,861
7. Charles Schwab Corporation $973,176
8. S.F. Police Officers Association $913,834
9. SEIU Local 1021 & SEIU Local 790 $860,979
10. Friends & Foundation of the S.F. Public Library $858,082
11. California Academy of Sciences $818,154
12. Residential Builders Association of S.F. $753,857
13. Steven Castleman $665,254
14. S.F. Association of Realtors $647,299
15. S.F. Chamber of Commerce $614,824
16. SEIU United Health Care Workers West & Local 250 $585,937
17. Gap, Inc. $573,959
18. California Issues PAC $556,238
19. Corporation of the Fine Arts Museums $541,474
20. Wells Fargo $464,899
21. Building Owners & Managers Association of S.F. $464,027
22. Bank of America $429,316
23. Golden Gate Restaurant Association $422,685
24. SF SOS $407,491
25. AT&T Inc. and affiliates $404,704
26. Clear Channel $391,783
27. Charles R. Schwab (individual) $362,250
28. Yellow Cab Cooperative $344,907
29. S.F. Apartment Association $280,376
30. San Franciscans for Sensible Government PAC $279,009

Downtown marshals its forces

2

By Tim Redmond

The folks who got their collective asses kicked in last fall’s elections also got the message — that their politics, their candidates and their messages aren’t working — and they’re quietly meeting to map out a new strategy to try to take back some seats on the Board of Supervisors in 2010.

A meeting earlier this week, convened by former SFSOS staffer Ryan Chamberlain, drew representatives of the Chamber of Commerce, the Committee on JOBS and candidates like Scott Wiener, a Democratic County Central Committee member who is planning to run in District 8.

“What we’re doing isn’t working,” Chamberlain told us. “The progressives are winning.”

So downtown is looking to build grassroots operations — and the message right now is “quality of life.” That means cracking down on homeless people, cleaning up the streets, more cops, probably a move toward allowing more condo conversions (homeowners tend to vote more moderate than renters, so these folks love the idea of having more owners and fewer renters in town).

Chamberlain wouldn’t give us a list of who attended, but one source familiar with the meeting told us the Chamber and JOBS were well represented. Wiener confirmed that he was there, but wouldn’t say anything else about the meeting. Sup. Sean Elsbernd told us he was invited, but couldn’t make it.

So let’s remember: The progressive victories last November were hard-fought. This is still a battle for the soul of the city, and the other side isn’t anywhere near ready to concede. In fact, the downtown guys have plenty of money and sophisticated political strategists and they’re lining up candidates.

Newsom still MIA

1

By Tim Redmond

You know the mayor is in serious trouble when his business allies say he’s missing in action. From the Chron this morning:

Scott Hauge, a San Francisco business owner who is president of the advocacy group Small Business California, said the meetings that Chiu organized this week were the first occasions small business has been brought into City Hall talks since budget negotiations started heating up several weeks ago.

“The mayor has not brought us to the table, which is very frustrating because we are the major employers in San Francisco and we are really hurting right now,” said Hague, adding that he’s worked with every mayor since Dianne Feinstein and that it is unprecedented to have a board president, not the mayor, convene these types of discussions.

While nobody who has been attending Board President David Chiu’s meetings will talk about the details, I’m getting the clear impression that business (including the Chamber of Commerce and the Committee on JOBS) and labor (particularly SEIU Local 1021) are actually making progress toward a July special election that could help prevent a total meltdown in city services.

And Newsom didn’t even send a representative to the meetings.

My favorite comment from the mayor:

“But I guess the question is, what more can I do? I can make things up to do today in order not to go down there (to San Jose)

Newsom has to “make things up to do today?” How about talking to the key stakeholders and trying to arrange a deal on a budget that everyone can live with?

Nathan Ballard, the mayor’s press flak, told us that

The mayor has been meeting with labor, business and the supervisors to work together on solutions.

But nobody in business or labor or on the board of supervisors seems aware of that.

Without a net

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› news@sfbg.com

The Board of Supervisors heard more than four hours of public comment at its Jan. 27 meeting, as hundreds of labor representatives, public-health workers, homeless advocates, hospital staffers, and others crowded into the board chambers to sound off on the deep budget cuts that many charged would leave they city’s critical-services safety net in shreds.

The message was chilling.

On the ground, the budget cuts Mayor Gavin Newsom is proposing translate into staggering losses in services that segments of the city’s most disadvantaged populations rely on. Among those who will lose their jobs: some San Francisco General Hospital staffers who are trained to watch the cardiac monitors. "They are the first responders when someone goes into cardiac arrest," nurse Leslie Harrison told the board during public comment. "This is a life and death job — literally."

The Huckleberry House, which was established in 1967 and provides assistance to more than 7,000 homeless youth each year, may face closure.

Homeless shelters are already being forced to turn away two out of three clients seeking a bed due to lack of space, according to Coalition on Homelessness Executive Director Jennifer Friedenbach.

Demand for hot meals from the St. James Infirmary, a clinic for uninsured sex workers, has tripled since the onset of the recession, Executive Director Naomi Akres told the Guardian. As a result of the cuts, the clinic will lose its ability to continue either the food program or an outreach program that aims to get people off the streets.

Other areas that face funding reductions, according to a tally of midyear reductions issued by the mayor’s office, include some programs that administer STD testing and HIV prevention services, the Adult Day Health programs at Laguna Honda Hospital, aid for foster care, and the Single Room Occupancy Collaborative (which assists low-income tenants living in dilapidated hotel rooms across the city). San Francisco’s Human Services Agency will lay off 67 staffers.

Of the $118 million in midyear cuts rolled out by the mayor’s office last December, some $46 million will be shed from health, human welfare, and neighborhood-development services.

The midyear reductions, which will begin to take effect Feb. 20, are aimed at addressing a steep drop-off in revenue for the 2008–09 fiscal year. Now, health and human services providers and others across the board are anxiously looking ahead to the next round of blows, which will be dealt to address a projected $576 million deficit for the 2009–10 fiscal year, which begins in July. That figure could be reduced to $461 million after budget cuts, according to Deputy Controller Monique Zmuda.

Newsom has known about the gravity of the current budget problem since late October, when City Controller Ben Rosenfield issued a memo projecting fiscal disaster. "Since the adoption of the budget in July, the City’s economic outlook has significantly worsened, particularly since the onset of the global financial market upheavals that began in September," the memo states. It goes on to predict a worst-case scenario of $125 million in tax-revenue shortfalls for the 2008–09 fiscal year.

Cuts in frontline services don’t have to be the only answer. Supervisor Chris Daly has introduced an alternative budget proposal, which includes reductions in funding for management positions, cuts in the city’s subsidy to the symphony, and a reduction in the size of the mayor’s press office in an effort to free up funds that could then be diverted back to critical services. "I don’t think any of the choices are good. There’s really only the lesser of the evil," Daly noted at the meeting.

The choices the city faces were described in clear terms. "I’m sorry to say it, but you have some tough decisions in front of you," Friedenbach told supervisors when it was her turn at the podium during public comment. "You have to choose between abused children, or the symphony. You have to choose whether you want to decimate the mental-health treatment system — or do you want to get rid of the newly hired managers since the hiring freeze? You have to decide whether you want to cut half of the substance-abuse treatment system — or do you want to create a new community justice center that will have nowhere to refer its defendants?" Rather than choose, however, supervisors voted 6–5 to send Daly’s alternative package back to the Budget and Finance Committee for further consideration. The swing vote was Board President David Chiu, who was elected president with the support of the progressive bloc.

Had Chiu voted for Daly’s alternative, it wouldn’t have mattered much — the mayor would almost certainly have vetoed it.

Eight supervisors — enough to override a veto — did demonstrate a willingness to move forward with a June special election. With Supervisors Sean Elsbernd, Michela Alioto-Pier, and Carmen Chu dissenting, the board voted to waive deadlines that would have prevented new tax measures from being placed on a June 2 ballot.

Several different tax ideas are under discussion. According to a list of preliminary estimates calculated by the Office of the Controller, slight increases over the current rates of taxes levied on business registration, payroll, sales, hotel-room stays, commercial utility users, parking, property transfers, and Access Line fees together could bring the city an estimated $121.6 million per year.

Other proposals include creating parcel taxes for both residential and industrial property, gross-receipts taxes on rental income for commercial and residential properties, a local vehicle license fee, and a residential utility users tax. If all of those proposed new taxes were voted into effect, the city would have the potential to raise an additional $112.9 million.

The problem: under state law, unless the mayor and supervisors unanimously declare an emergency, any tax increase would require a two-thirds vote to pass.

Supervisor John Avalos voiced strong support for the special election. "I think that the people of this city are still grappling with the meaning of the crisis that we’re in," Avalos told his colleagues.

Avalos amended out the possible new parcel tax, increased parking tax, and utility-users taxes, and instead proposed two new revenue measures that could be added to the ballot: a vehicle-impact fee, and "a possible new tax to discourage the consumption of energy that produces a large carbon footprint."

It won’t be easy to pass any of these proposals. Business interests are mobilizing against the very idea of a special election. In an e-mail newsletter distributed by the San Francisco Chamber of Commerce, a "call to action" urged supporters to contact Supervisors and voice opposition to the emergency election.

The language in the Chamber of Commerce message closely resembled that of Small Business California, which put out a message to the small-business community warning that higher taxes "would be the straw that breaks the already strained back of our local businesses, resulting in more layoffs and acceleration of our downward spiral."

Labor organizer Robert Haaland asked supervisors why they would be afraid of allowing voters to decide on the tax-revenue measures. A poll commissioned by his union, SEIU Local 1021, demonstrated that a significant portion of voters would rather raise revenues than allow vital services to disintegrate.

Even if new revenue is raised, Haaland told us, no one is under the illusion that there won’t be painful cuts. "Everyone’s going to feel some pain," he said. "It’s a question of how much pain."

Bad budget ideas

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EDITORIAL There’s nothing easy about solving a half-billion-dollar budget shortfall, and most of the people involved in the grisly process of making the numbers add up at San Francisco City Hall know there will be blood on the floor. Labor unions representing city workers know there will be layoffs, salary concessions, or both. Community-based organizations handling critical front-line services know they’ll have to reduce staff and curtail their mission-driven operations. The supervisors know that a lot of good projects and great ideas won’t get funded this year.

The mayor, unfortunately, isn’t acting as if this were a crisis at all — he’s been out of town more than he’s been around the past few weeks. The San Francisco Chamber of Commerce and, sadly, some small business leaders, are refusing to accept the idea that taxes — some taxes, not enough to stave off deep cuts, but enough to prevent disaster — ought to be part of any budget package.

And along with the cuts — which, as Rebecca Bowe reports on page 11, will have far-reaching implications for San Franciscans — a number of really bad ideas have been floated, most of them quick fixes that would generate cash for now, but lead to serious problems later.

Among the worst ideas the mayor has put forward — in fact, it’s one of the worst budget ideas we’ve ever heard — is the notion of increasing the number of condominium conversion permits from 200 per year to 1,500 per year, and possibly allowing every property owner waiting for a conversion permit to get one, now, for a price.

It’s true that selling off condo conversion permits would bring in revenue. Raffling off building permits and planning code variances would bring in money, and so would selling development rights in city parks, and so would auctioning off appointments to boards and commissions. There are lots of stupid ways to generate cash, and the fact that a proposal would be lucrative is not by itself an argument in favor of it — even in times like these.

There’s a good reason the city limits condo conversions. Nearly every piece of property that becomes a condominium was once a rental unit, and the speculative pressure to take rent-controlled apartments and turn them into market-rate condos is immense. It’s bad enough that tenants — particularly those with relatively low rent — face eviction every day because of the state’s Ellis Act and the push by real-estate interests to create tenancies in common. Without conversion limits, the number of those evictions would soar; rent control would be eviscerated, the cost of housing would rise, and the economic cleansing of San Francisco would roll forward another few giant steps.

Newsom and his real-estate industry allies like to say that this sort of proposal is painless, since nobody has to pay higher taxes. Only people who want to convert their units, and are willing to pay a high fee for the right, would wind up paying. But that’s silly — the tenants of San Francisco would pay the cost — an immense cost — while the wealthier property owners made profits.

Selling off the taxi medallions (see "Don’t privatize the cab medallions, 1/21/09), another Newsom idea, fits in the same category. In the short term, it could bring millions into the city coffers. Long term, it would turn control of the taxi industry back to speculators and big companies, hurting the drivers and the public.

The mayor (and Sup. Sean Elsbernd) also like to talk about eliminating set-asides — those parts of the budget that voters have earmarked for particular purposes. But most of that money (the Children’s Fund, for example) goes to worthy programs: eliminating the "set-aside" protecting doesn’t save any money unless you cut those programs.

There are plenty of good budget ideas out there (see "Beyond the bloody cuts, 12/17/08). But the supervisors ought to make it clear that the bad ones are off the table.

PS: Where were all these anti-tax folks in the Chamber and the small business community, and supervisors like Elsbernd, when the city had a chance to bring in millions without any new taxes — by creating a public power system or raising utility franchise fees? They were siding with Pacific Gas and Electric Co. That’s part of the reason we’re in this fix.

Business community attacks tax proposals

1

By Steven T. Jones

San Francisco’s business community has launched a coordinated campaign against calling a special election in June for new revenue measures, which the Board of Supervisors will consider at Tuesday’s meeting.

The board voted 8-3 this week to declare a fiscal emergency and consider various tax measures to help offset $118 million in midyear budget cuts made by Mayor Gavin Newsom and to close a deficit for the next fiscal year projected to be more than $550 million. All eight supervisors will be needed to call the election.

But the San Francisco Chamber of Commerce and Scott Hauge (who didn’t return my calls for comment) of Small Business California have both blasted out calls to oppose the move, using the same talking points and nearly identical language that complains, “City Hall is rushing to hold a June 2009 Special Election so it can put proposals for hundreds of millions of dollars in new taxes before San Francisco voters.”

In reality, current proposals call for less than $100 million in new taxes. Business leaders and Mayor Gavin Newsom (who also opposing the June election) have known since at least Halloween about the size of this deficit (which is roughly half of the city’s discretionary spending) and could have worked with progressives on the procedural issues they’re citing. So this has nothing to do with “a rush,” but is one more example of fiscal conservatives offering knee-jerk opposition to any new taxes.

Still, the business community will be putting intense pressure on the board, particularly the swing votes: Supervisors Bevan Dufty and Sophie Maxwell. So if you think the people should have a say in sparing some of the deepest cuts to city services by making rich people, drivers, or profitable businesses pay a little more in taxes, now’s the time to make your voice heard.

The District Six dance begins

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12909WKR.JPG12909KIM.JPG
Walker, Kim

By Tim Redmond

Chris Daly will be the district six supervisor for the next two years (minus a couple of weeks), but already the dance to replace him is underway — with some surprising names floating around.

It’s no secret that Debra Walker is running, and with her long record on land-use and planning issues and her LGBT community leadership, she starts out as the leading progressive in the race. SOMA activist Jim Meko has joined the fray, too.

And the rumor mill is abuzzin with talk that School Board member Jane Kim, who by all accounts has a bright political future, is considering the race. Kim recently moved to D6, and we’ve heard from a number of people who’ve been contacted by Kim supporters about a possible supervisorial bid. Kim herself is a bit more coy: “I’m not announcing a campaign,” she told me. But she didn’t entirely rule it out: “Right now, I’m not a candidate. I haven’t decided what I’m going to do in 2010; everything’s on the table.”

And then there’s Michael Yarne, who last year left Martin Builders to take a job with the Mayor’s Office of Economic Development. Mayor Newsom doesn’t have a clear horse in that race yet (Rob Black, who works for the Chamber of Commerce, may run again, but he lost last time and is clearly a Chamber toadie, so his hopes in the liberal district aren’t that good). Yarne told us that he’s been contacted by people who think he’d be a good candidate, and he hasn’t entirely ruled it out, but “there’s no way I could run right now because I don’t live in the district.” Yarne rents in D9.

For my money, Kim is one of the brighest young stars in local politics, and she ought to stay on the school board, where she’s doing a great job, for another term, then start looking at other offices.

Mom and pop lose their voice

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› rebeccab@sfbg.com

Bank of America and Pacific Gas and Electric Co. are quite the opposite of mom-and-pop operations, yet two of the seven members appointed to San Francisco’s Small Business Commission hail from these corporations, much to the chagrin of true small business leaders.

In a heated e-mail fired off to an assortment of City Hall staffers Jan. 13, Small Business Commissioner Michael O’Connor criticized the Mayor’s Office for diluting the commission — which was set up to go to bat for the little guy — with big business appointees.

Meanwhile, funding for the Small Business Assistance Center was almost eliminated last month by the Board of Supervisors. And a report that was supposed to streamline the unwieldy permitting process for small businesses, which the administration was required to complete under the 2007 measure Proposition I, never materialized.

At a time when small businesses are struggling in the face of a dour economic landscape, strong advocacy on their behalf is needed now more than ever. But even as former Small Business Commissioner David Chiu ascends to the presidency of the Board of Supervisors, small business leaders are decrying their lack of support in City Hall.

The Small Business Commission is a seven-member body composed of three members appointed by the Board of Supervisors and four appointed by Mayor Gavin Newsom. Set up to serve as an advocate for the small business community, the commission was also chartered to oversee the Office of Small Business, a branch of the city’s Office of Economic and Workforce Development.

Last May, the office opened its Small Business Assistance Center, created to lend startups a helping hand with navigating the bureaucratic maze of permits, fees, licenses, and other hoops to be jumped through to legitimately set up shop in the city.

Regina Dick-Endrezzi, acting director of the Office of Small Business and one of four people staffing the center, says there’s a real need for the service. She said that about 99 percent of all San Francisco businesses fall into the category of "small," which she defines as having fewer than 100 employees, making it one of the most important sectors of the city’s economy.

Since the center opened, more than 1,300 small business clients have received assistance there, according to Dick-Endrezzi. Many lack the resources and capital that larger enterprises might have at their disposal, so SBAC case managers act as counselors for people who are trying to get a new business off the ground.

Entrepreneurs have sought help with things like obtaining a permit to open a vegan taco truck, acquiring a license to start a cleaning business, or filing for tax credits for an organic baby food business, to name a few examples. "This is something we really need," Dick-Endrezzi told the Guardian, "and this is something politics shouldn’t get in the way of."

Nonetheless, the center and the commission haven’t been spared from controversy. In December, the Board of Supervisors considered slashing SBAC funding. The $800,000 annual budget was ultimately granted, but it weathered midyear budget cuts of around 10 percent.

Now a new issue of contention has emerged: O’Connor has sounded the alarm that the SBC is becoming weakened by mayoral appointees who represent the large corporate interests that are often quite different from those of small businesses.

The conflict went public at the Jan. 12 SBC meeting when it came time to elect a new vice president. Richard Ventura, who heads a consulting firm and serves as executive director of the downtown-based Hispanic Chamber of Commerce, had just won commissioners’ approval to serve as president. Before a second round of votes were cast, O’Connor — who served as president for two years but declined to try for the post again — voiced his fervent opinion that "an actual small business owner" should be chosen for the other leadership slot.

"I think we need the balance of a small business owner in either the presidency or the vice-presidency position," said O’Connor, who owns the Independent music venue in the Western Addition. "If we have a president and a vice president that both come from downtown, and if three out of the four mayoral appointees on this commission are from downtown, I will be incredibly embarrassed to be on this commission. And I’m sorry, this is nothing personal — I like everybody on this commission — but small business is in a fight for its life, in this building and in City Hall."

Despite his plea, Commissioner Irene Yee Riley — a retired Bank of America executive — was elected. Although not a small business owner, Yee Riley told commissioners that she was qualified to serve as vice president thanks to her "many years of experience working with small business owners as a banker."

"I’m retired, and I have time, so I want to use this opportunity to give back to the community," she added.

Yee Riley won after receiving one vote more than Commissioner Janet Clyde, a bartender and general managing partner of Vesuvio Cafe in North Beach. "I live in the Mission District in a solid working-class neighborhood that is rapidly changing," Clyde told the other commission members during her pitch. "I know the challenges of small businesses operating far from the power and economic center of San Francisco, and I intend to work to recommend their interests … even in this difficult budgetary time."

The following morning, a dismayed O’Connor vented his frustration in an e-mail to mayoral staffers, typing "Small Business Commission … or … Big Business Commission" into the subject line. Installing commissioners with ties to large corporations rather than direct small business experience constitutes "a neutralization of the only real voice small businesses have in San Francisco," he charged.

The most recent mayoral appointee to the SBC was Darlene Chiu (no relation to David Chiu), a spokesperson for PG&E who formerly served as deputy director of communications for the Mayor’s Office. When the Guardian queried the Mayor’s Office last March on what qualifications a PG&E spokesperson brought to the Small Business Commission, Press Secretary Nathan Ballard responded with this statement: "Darlene has first hand knowledge of the challenges facing small businesses in San Francisco. She grew up working in her family’s … retail businesses in Chinatown, managing nine to l5 employees. She will also bring her knowledge of city government and communications to the commission, which will be important to the successful operations and promotion of the assistance center." (See "Newsom to small business: drop dead!" March 18, 2008 Bruce Blog.)

But since her appointment last March, public records show that Chiu has missed four of the monthly meetings. Excessive absenteeism at city commission meetings briefly emerged as an issue in September 2006, prompting Newsom to introduce a new standard with a working goal of 100 percent attendance for commissioners.

Meanwhile, not everyone agrees with O’Connor’s assertion that "San Francisco’s Office of Economic Development seems to believe small business is just an annoying little rock in its shoe."

"The Office of Economic Development is incredibly committed to keeping this commission strong," counters Jennifer Matz, managing deputy director of the Office of Economic and Workforce Development, who played a role in starting the Small Business Assistance Center. "Michael is very disappointed about what happened, but I don’t think it reflects a lack of commitment to small business on the part of the city or the Mayor’s Office."

Matz said the challenge to the SBAC came from the Board of Supervisors — not the Mayor’s Office — when they considered revoking the center’s funding. She also contends that the Small Business Commission’s voting record doesn’t demonstrate a downtown vs. small business split.

From January 2008 to this January, commissioners voted unanimously 34 out of 38 times, the record shows. But it’s on the divisive issues where small and big businesses differ that can have the most impact.

Sup. Chiu served on the Small Business Commission before being elected to the Board of Supervisors. He said commission members usually saw eye-to-eye on most items that came before the commission regardless of whether they were board or mayoral appointees. But for him, the frustration was that "it didn’t feel that either the mayor or the Board of Supervisors were focused on small business."

In his new capacity as board president, he said measures that aid small businesses will be moving up on the list of priorities. For example, he has asked for a hearing on why the report on streamlining small business regulations, which Prop. I required the Office of Small Business to complete by 2007, was never done.

Although doubts about the commitment to small business seemed to be cast on all sides, everyone we spoke with seemed to agree on one point: in these stormy economic times, San Francisco’s small businesses need all the help they can get.

Two reports released in December by the U.S. Bureau of Labor Statistics and Automatic Data Processing (ADP) provide some insight into the challenges facing small businesses nationally. BLS reported that 524,000 jobs were lost during December, bringing the 2008 total to 2.6 million lost jobs — the highest since 1993.

The ADP report showed that 281,000 jobs had been shed from companies with fewer than 50 employees. This signifies a drastic increase in job losses from this sector: between October and November, small businesses cut just 79,000 employees, according to ADP, and between September and October, they let go of 25,000 employees.

"That was the first time since 2002 that small businesses had net job losses," says Scott Hauge, president of Small Business California. What’s frightening, he says, is that the small business sector traditionally acts as an economic stabilizer.

During the battles it the mid-1980s over accelerating downtown office building construction, the Guardian commissioned a study from noted MIT economist David Birch that found that small business accounted for most net job creation in San Francisco, and that catering to corporate demands downtown actually cost the city jobs.

Yet now, with the small business community sometimes serving as a political football tossed between downtown and City Hall, the city’s economic base is in trouble and hoping for help from political leaders who are now contemputf8g deep budget cuts.

————

Here’s a list of all the small business commissioners:

Commissioner Darlene Chiu
Occupation: Communications, PG&E
Appointed by: mayor

Commissioner Janet Clyde
Occupation: General managing partner / bartender, Vesuvio Cafe
Appointed by: Board of Supervisors

Commissioner Kathleen Dooley
Occupation: Florist / owner, Columbine Design
Appointed by: Board of Supervisors

Commissioner Gus Murad
Occupation: Owner, Medjool (restaurant) and Elements (hotel)
Appointed by: mayor

Commissioner Michael O’Connor
Occupation: Co-owner, The Independent (music venue)
Appointed by: Board of Supervisors

Commissioner Irene Yee Riley
Occupation: Retired senior vice president and market executive, Bank of America
Appointed by: mayor

Commissioner Richard Ventura
Occumpation: Executive director, San Francisco Hispanic Chamber of Commerce
Appointed by: mayor

————-

Previous Guardian coverage:

>>Volume 20.02 (PDF) An exclusive Bay Guardian study in 1985 challenges the convention wisdom that downtown development creates jobs. Instead, our study by an MIT economist shows that small business have created virtually all the new jobs in San Francisco since l980.

>>Volume 21.02 (PDF) Our updated study in l986 shows that as highrises have gone up, downtown San Francisco has lost jobs. In fact, all the net new jobs in the city have come from new and small businesses in light industrial areas and the neighborhoods

>>October 1, 2003 (PDF) The Guardian’s small business agenda for San Francisco

Six aren’t enough

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› news@sfbg.com

The historic Jan. 8 vote electing Sup. David Chiu as president of the Board of Supervisors — rare for its elevation of a freshman to the post and unprecedented for a Chinese American — clearly illustrates the ideological breakdown of the new board.

The six supervisors who claim membership in the progressive movement (Chris Daly, Ross Mirkarimi, David Campos, John Avalos, Eric Mar, and Chiu) gave Chiu the presidency after their efforts to give it to Mirkarimi or Avalos fell short, while the other five supervisors voted for Sup. Sophie Maxwell in each of the seven rounds, refusing to support any of the progressive picks.

But there are limits to what a bare majority of supervisors can do in San Francisco, particularly when the mayor is threatening vetoes and the city is wrestling with a budget deficit of gargantuan proportions. Overriding a mayoral veto or approving some emergency measures requires eight votes.

So the first question is whether Mirkarimi and Daly can come together after their split divided progressives and led to Chiu as a compromise candidate. But the second, more important, question for progressives is whether they can attract swing votes such as Maxwell and Bevan Dufty when the need arises.

The answers to those questions could start coming immediately as supervisors consider proposals to close a looming $575 million budget gap, including the proposal for a special election on revenue measures in June. Mayor Gavin Newsom opposes that election, so the board would have to muster eight votes in the next month to move forward with it.

They might even need more than that. A confidential memo to supervisors and the mayor by the City Attorney’s Office that was obtained by the Guardian sorts out the complex requirements needed to approve new taxes, including the requirement of unanimous board approval to place tax measures that can be passed with a simple majority vote on the ballot this year.

So President Chiu, who pledges to bring his colleagues together, certainly has his work cut out for him.

 

POLITICS AND POLICY

Achieving a unanimous vote on anything significant or controversial seems impossible right now. Mirkarimi is unhappy with Daly for thwarting his presidential ambitions; Maxwell and Dufty are unhappy with progressives for keeping her out of their club; and Chiu must quickly learn his new job during a time of unprecedented turmoil.

Chiu told his colleagues that he was “incredibly humbled” by an election that he didn’t think he’d win, and said that he is “acutely aware that I am new to the institution and the body.” But observers say Chiu’s temperament, intelligence, and connections to both the business community and the progressive movement could serve the city well right now.

“I think Chiu is a great choice. He has the humility that will help him,” outgoing Sup. Jake McGoldrick told the Guardian.

This compromise pick for president was praised by all sides, from the progressive coalition that feted him after the vote at a party at the SoMa club Temple. Rob Black, government affairs director for the San Francisco Chamber of Commerce, told reporters that “David seems to be someone who is very willing to listen and willing to ask questions.”

“We have a progressive supervisor running the board,” Mirkarimi told the Guardian as he walked back to his office following the vote. Or, as Daly told us, “In the end, the progressive coalition stuck together and I’m happy about that.”

Walking back to Room 200 after the vote, Newsom told reporters that Chiu was “an outstanding choice” who represents “a fresh air of progress.” Asked whether he expects to have a better working relationship with Chiu than with outgoing president Aaron Peskin, Newsom replied, “That’s a gross understatement.”

“We’re looking forward to working with the new Board of Supervisors,” Newsom spokesperson Nathan Ballard told the Guardian after the vote. “The mayor has a long relationship with David Chiu. In fact, he was on our short list to be named assessor just a few years ago.”

Yet at the progressive party that night, Chiu sounded like a rock-solid member of that group, promising to help Mirkarimi with police reform, Campos with protecting undocumented city residents, Mar with strengthening city ties to the schools, and Avalos with safeguarding progressive budget priorities.

“I think this is the best outcome we could have,” Mirkarimi told the Guardian shortly after Chiu was elected. “I was the deciding vote that delivered Sup. David Chiu, the first Asian American president of the board. That doesn’t mean that the seasoned experience of Maxwell and myself wasn’t hard to pass by.”

In fact, both Dufty and Maxwell groused about the progressive bloc’s opposition to Maxwell, noting her positions on issues such as public power, affordable housing, and transportation issues. “The people that voted for me did so because they felt I would at least listen to them,” Maxwell told us, expressing frustration at not being accepted “by the board’s progressive clique” which, she noted, “are all males.”

“I think David will be great,” Dufty told the Guardian. “Obviously there was a desire to have someone strongly aligned with the progressive movement. I think it’s a mystery that Sophie isn’t considered part of the progressive movement.”

Progressives are going to have to work at resolving those differences if they are going to play a leadership role in the midyear budget cuts and prevent an expansion of the bloc of five supervisors who stuck with Maxwell and often align with the mayor.

“There has been tension between Ross and myself, but also between Sophie and Ross,” Daly told us. “Sophie is feeling that she might be a progressive, too. And some of the things we do on the board need eight votes. The rift between Ross and I is little. The real question is, when do we get Bevan and Sophie back?”

After fending off a progressive challenger in his reelection bid two years ago, Dufty seemed to move to the left, only to return to Newsom’s centrist faction — which mixes social liberalism with fiscal conservatism — in the last year. He prevented progressives from being able to override a mayoral veto of their decision to cancel $1 million in funding to Newsom’s Community Justice Center. And on Jan. 6, the old board delayed a vote on a mayoral veto of an ordinance that amends the Planning Code to require Conditional Use hearings and permits for any elimination of existing dwelling units through mergers, conversions, or demolitions of residential units, something sought by the tenant groups that are an important part of the progressive coalition.

Those issues, and the thicket that is the budget debate, illustrate what Daly admitted to us last week: “We can’t run this city with six votes.”

 

THE BUDGET MESS

The most pressing problem facing the new board is the budget, which requires $125 million in midyear cuts for the current fiscal year and will be an estimated $575 million out of balance for the fiscal year that begins in June. Chiu’s first move to deal with it — one lauded by progressives — was to name Avalos as budget chair.

“John Avalos has more experience on budget issues than me,” Daly, who chaired the Budget Committee for two years, said of his former board aide. But even Avalos was awestruck by the tsunami of bad budget news hitting the city, telling us, “I was visibly shaken.”

Mirkarimi and Elsbernd, the Budget Committee’s two other current members, also admit they face a daunting task.

“We can’t put a Band-Aid on the problem,” Elsbernd told the board last week. “This is not just about San Francisco now, but about San Francisco 20 years from now. We need to think about the next generation.”

Mirkarimi agrees with Elsbernd, at least in terms of the enormity of the problem.

“We cannot be incrementalist. We can’t dance around the edges,” Mirkarimi told his colleagues, shortly after making the surprise announcement that he’s expecting a child in April with Venezuelan soap opera star Eliana López, who he’s dated since meeting her last year at a Green Party conference in Brazil. Elsbernd and his wife are also expecting their first child.

Progressives strongly argue that such a large budget deficit can’t be closed with spending cuts alone, so one of Peskin’s final acts was to create legislation calling a special election for June 2 and having supervisors hold hearings over the next month to choose from a variety of revenue measures, but Newsom and the business community opposed the move.

“Basically, it’s not fully baked. It will take a citywide coalition (à la Prop. A) to win something like this and the coalition just hasn’t been built yet,” Ballard told the Guardian. Even Mirarimi echoed the sentiment, telling the Guardian, “I’m not opposed to a June election, but you can’t put something on the June ballot that’s half-baked because I doubt we could win in November if we put something half-baked on in June. My preference is that we work harder to create alliances to assure a healthy chance of getting something on the ballot and delivering a victory.”

Yet many progressives and labor leaders say it’s important to bring in new revenue as soon as possible, particularly because the cuts required by the current budget deficit would slash about half the city’s discretionary spending and devastate important initiatives like offering health coverage to all San Franciscans.

“For Healthy San Francisco to survive, the Department of Public Health has to have a minimum level of funding,” said Robert Haaland, a labor representative with the public employee union SEIU Local 1021. “Given the cuts that have been proposed, it’s not going to survive.”

While Peskin was criticized for acting prematurely, the City Attorney’s Office memo indicated that he couldn’t have waited and still allowed supervisors to play the lead role in determining what ended up on the June ballot. The memo was requested by Daly.

“In response to your specific inquiry about maximizing the amount of time a committee could deliberate the underlying measures and ensuring that the Board would have enough time to override a Mayoral veto, the emergency ordinance and the resolution calling for the special election should be introduced today,” the City Attorney’s Office wrote Jan. 6, the day Peskin introduced his revenue package.

Even then, supervisors would need to vote to waive certain election procedures, such as the 30-day hold for proposed ballot measures, and to move expeditiously forward with hearings, selection of the tax measures, and preparation of findings related to the special election and declaration of fiscal emergency.

The City Attorney’s Office wrote that the package needs final approval by Feb. 17. “We recommend that to meet this deadline, the Board adopt the resolution at its January 27 meeting and that the Mayor sign the resolution no earlier than February 2,” they wrote.

But Newsom has indicated that he would veto it, thus requiring eight supervisors to override. “Aaron had the right to do what he did, but in some ways he rushed the discussion, so it’s been a bit rockier than it otherwise might have been,” Dufty told us, noting that he’s still open to supporting a June ballot measure. “There is no way to avoid spending cuts, and we need more revenues and more givebacks from public employees … I think labor is spending a significant amount of time with the mayor, and he’s making a strong effort to work with the board. I’m trying to encourage us all to work together to the maximum extent possible.”

In fact, San Francisco Labor Council director Tim Paulson told the Guardian he couldn’t talk about the tax measures yet because of intense ongoing discussions. Ballard said Newsom might be open to tax measures in November, telling the Guardian, “Ideally we could do it all by streamlining government, reducing spending, etc. But the mayor lives in the real world and so he is open to the possibility of a revenue measure with a broad base of support.”

So, can the new board president help coalesce the broad base of support that he’ll need to avoid cuts that would especially hurt the progressive base of unions, tenants, social service providers, affordable housing activists, and others who believe that government plays an important role in addressing social problems and inequities?

“In light of the global meltdown, national slowdown, local crisis, and largest budget deficit in history, I believe this board understands the importance of unity and working together,” Chiu told his colleagues. “We don’t have time for the politics of personality when we have the highest murder rate in 10 years, when businesses are failing, and the budget deficit grows exponentially.”

Cut half the general fund?

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by Tim Redmond

I’m not kidding. That’s what the numbers right now suggest. San Francisco over the next year could face a budget deficit of $576 million — almost half of the entire discretionary money that the city has to spend.

Mayor Gavin Newsom, frankly, is entirely missing in action on this one. He’s been hiding out, doing his budget discussions in secret, playing Where’s Waldo (even showing up that the board meeting without a budget plan) and leaving City Hall and thousands of city workers, nonprofits and activists wondering what the hell is going on. The lack of leadership is mind boggling.

In the vacuum, the Coalition to Save Public Health has proposed a series of alternative cuts, and Sup. Aaron Peskin, writing in tomorrow’s Bay Guardian, suggests that the board consider them. The proposals include eliminating unnecessary jobs that pay more than $100,000 a year, cutting back the mayor’s seven-person PR staff, cutting the money the city gives to the Opera and Symphony and re-opening the police and fire contracts. These are all good ideas — and they might, in the best of all circumstances, add up to ten or 20 percent of the deficit.

The reality is that the mayor is going to be making some brutal cuts now — and it will be much worse in a few months, when the supervisors have to deal with the next fiscal year’s budget. You can’t cut half a billion dollars out of San Francisco city government without eliminating a lot of essential programs. Public health? Decimated. Parks and Rec? A wreck. Muni? Service will get way worse, fares may go up, and the city’s commitment to public transit will be at risk. What’s the city do for you? Get ready to give it up.

And you think the job market is bad now and the recession starting to hit the city hard? Imagine when a few thousand city employees join the unemployment lines.

So what are we supposed to do? Let me make a suggestion.

The worst thing a government agency can do in a recession is cut spending. The feds can borrow money and keep spending, but the city can’t. So we simply need to face the fact that this is an emergency, a crisis, the worst situation since the 1930s – and we need to look for new revenue.

We can’t mess around with half steps, either. We need big money, right now – and the best, most fair and progressive way to get that is with an income tax.

Now, the city can’t just impose an income tax on residents, the way New York City and Philadelphia do. The California Constitution pre-empts that. But the city CAN levy a tax on all income earned within the city. So the commuters pay, too (although residents who live here and work somewhere else don’t; it’s an imperfect world). Oakland passed a tax on income earned in the city in the 1970s, and the issue went all the way to the state Supreme Court, which ruled in Weekes v. City of Oakland that the tax was perfectly legal (the City Council dropped the tax anyway). Here’s an opinion on it.

The nice thing about income taxes is that they hit the rich harder than the poor. In fact, San Francisco could exempt, say, the first $100.000 of income, then use a progressive scale to make sure that only well-off people paid anything, and the richest paid the most. Even in a recession, there are rich people in this town, people who have done very well under the Bush tax cuts – and shifting money from the rich to the poor during a recession is excellent economics.

And an income tax could actually bring in enough cash to make a real difference.

Of course, the rich people who pay it can deduct the local tax from their state and federal returns – so a lot of the money actually comes to SF from Washington and Sacramento.

Passing something like this would be a huge political challenge – it would have to go on the ballot, and nobody wants new taxes, and the Chamber of Commerce types would howl and raise huge sums to defeat it. It could only work if the entire City Hall establishment, starting with the mayor, was willing to go out and campaign, hard, for the measure. Make it temporary – the tax would expire in two years. Make it progressive – nobody who is hurting financially would pay a heavy burden. And tell the voters: We tax the rich, or we close libraries, and eliminate Muni lines, and take cops off the streets, and close fire stations, and let sick people die because they can’t see doctors – and watch the local economy fall even deeper into recession as city spending plummets.

Because that’s what we’re talking about here. These are the choices.

There’s a good chance the state will have a special election in the spring – a tax measure could go on the ballot then. Or the city could hold its own special election. And if the city income tax doesn’t fly, I’m open to something – anything – else. But is has to be big, and we have to move on it now.

Any takers?

Hank Plante busts the mayor!

3

Why did Mayor Newsom buy a $51,000 Chevy car in Colma when the only Chevy dealership in San Francisco is going out of business? Scroll down for the KPIX video showing how Hank Plante busts the mayor.

By Bruce B. Brugmann

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Photo by Paula Connelly

Newsom’s driver and new Chevy Hybrid Tahoe SUV vehicle, parked in front of the Ark toy store on 24th Street, during a press conference launching the Shop Local–Get More campaign. The city bought the car from a dealership in Colma for $51,000.

It was marvelous. Simply marvelous. Hank Plante busts the mayor.

Let me set the scene: The reporters and small business leaders on Wednesday (Dec. 5) were packed in the Ark, a toyshop on 24th Street, for a press conference to launch formally the “Shop Local–Get More” campaign aimed at getting San Franciscans and everyone else to shop local in San Francisco this holiday season.

Steve Falk, president of the San Francisco Chamber of Commerce, laid out the chamber’s extensive program for its members to give substantial discounts to customers. Gerald Johnson, owner of the Ark, explained how his store would give 10 per cent off your next purchase with a purchase of more than $100. Mayor Newsom, who rolled in late in his city car, gave a zippy little talk about the values of shopping local and helping out the merchants and business community during tough times.

Newsom is at his best at these informal occasions, a little pep talk here, a genial smile and gesture there, lots of jutting jaw, no tough questions please. Then came time for questions and Newsom visibly relaxed for what he hoped would be some Noe Valley soft balls.

Hank Plante, the savvy political editor of KPIX Television (Channel 5), was positioned in the front of the crowd with his television cameraman and his camera was whirring away. He led off with a timely question.

“Mr. Mayor, you want people to shop in San Francisco. You know the car dealerships are in trouble. Can you tell us why you didn’t buy your new official city car here in the city?”

Newsom replied testily, “Uh, I have no idea. Thanks for the Gotcha question and I don’t have a clue. I didn’t have anything to do with the purchase of that car.” He said he would find out what happened and get back with the answer.

Plante reported the exchange in the KPIX newscast that night. He said, “We’re losing our last Chevy dealership” in San Francisco. He said that the new car was a Chevy Tahoe Hybrid SUV that cost $51,000 at a dealership in Colma. He pointed out that the Chevy was one of the “most visible purchases the mayor made this year.” Marie Brooks, from Ellis Brooks Chevy dealership on Van Ness Avenue, told Plante, “I think it’s wrong for one of our city officials to buy anything outside the city.” Ellis Brooks is a family-owned car dealership and one of the oldest and most famous local names in selling cars in Northern California.

Plante reported that Newsom kept ducking the question and later refused to allow the press corps to take a picture of him leaving the press conference in his gleaming black hybrid car parked in front of the toy store (see pic above.) KPIX showed video footage of Newsom not getting into the car and walking down 24th street.

Plante had nailed a point that has been agitating the small (and big) business community for years. Scott Hauge, a prominent small business leader and founder and president of Small Business California, was at the press conference and picked up on the point immediately. In his followup email to small business people in the city, Hauge noted he had attended the press conference “where the mayor was promoting a shop SF campaign.

“I applaud the mayor and others like the SF Chamber, Bay Guardian, Small Business Commission and Hotel Council for their efforts. What I didn’t hear was anything the city will do to require SF City agencies to buy from SF companies located in SF.”

Then Hauge zeroed in. “SF government does not have a very good track record in this area. In fact the mayor was asked why he did not purchase his hybrid vehicle in SF and he said he didn’t know why. Now is the time to push this issue. SF businesses have a higher cost of doing business because of mandates imposed on us. It seems to me that the least the city can do is buy from SF businesses.” I think he’s spot on.

And so Plante, Hauge, the Guardian, and small (and big) business in San Francisco are waiting anxiously for Newsom’s explanation why he bought a $51,000 city Chevy vehicle in Colma and not in San Francisco where our last Chevy dealership is on hard times and going out of business. And we are all waiting even more anxiously to hear what the mayor plans to do to correct this Shop- outside -San Francisco-syndrome and get the city working to spend its tens of millions of dollars of city tax dollars on businesses and services in San Francisco.

P.S. Full disclosure: the Guardian is a sponsor of the Shop Local campaign. And we sent a delegation to the press conference: Sales and Marketing Director Jennifer Lachman, Vice President of Operations Daniel B. Brugmann, Online and Print Advertising Coordinator Rebecca Frank, Assistant to the Publisher Paula Connelly who took the press conference photos, and myself. We are happy to pitch in on this critical and timely endeavor to put as much instant cash as possible into our local businesses and our community.

Our contribution, as a locally owned, independent newsweekly, is our own Shop Local campaign featuring a key marketing line derived from an analysis provided by the Business Alliance of Local Living Economies (BALLE), using a formula created by the consulting firm Civic Economics. This data is dramatic. It shows that if our 600,000 or so Guardian readers would spend $l00 with locally owned, independent businesses in San Francisco during the holiday season, that would inject $99 million into the San Francisco economy. Immediately.

That’s nearly $15 million more dollars than the city would see if that money were spent on chain stores that send their revenues back to headquarters. That’s because money spent at local businesses tends to stay and circulate in the community and create more local jobs and economic activity and of course more tax dollars for the city. The Guardian is also leading a national Shop Local campaign among alternative papers that would put several billion dollars in total into local economies all over the country. As Guardian Executive editor Tim Redmond puts it, “A sustainable community needs a sustainable economy, and that starts with locally owned, independent businesses.”

Unsolicited advice for the mayor and anybody else at City Hall who keeps sending our money outside of town: check the policy of the San Francisco International Airport that mandates locally owned small businesses get most of the juicy airport franchises. That policy works and works well. When I go through the airport, I always stop to get something to eat at Klein’s Deli. Klein’s was named after Deborah Klein, a Guardian circulation manager in the mid- 1970s who became a restaurant entrepreneur in San Francisco. For many years, she ran Klein’s Deli on 20th Street atop Potrero Hill. B3

Click here to watch yesterday’s KPIX newscast.

Click here to see Guardian photo coverage of the press conference.

Shop Local, get more

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By Paula Connelly

Today Mayor Newsom held a press conference to announce the ‘Shop SF. Get More’, an economic promotion campaign for December / January. This promotion is a collaboration between SF Economic & Workforce Development, SF Office of Small Business, SF Convention and Visitor Bureau, SF Chamber of Commerce, Hotel Council, MTA, MUNI, DPT, BART, Chronicle, Examiner, Business Times and Bay Guardian to encourage people throughout the nine county Bay Area to shop in San Francisco. The Bay Guardian has been promoting small business and sustainable economic programs for years and this holiday season is urging its readers to spend $100 of their holiday money at locally owned, independent businesses – a move that would pump nearly $100 million into the city’s recession-plagued economy.

The press conference was held Wednesday, December 3, 11:45am, at the Ark Toy Store, which is located at 3845 24th St (near Sanchez), in Noe Valley San Francisco.

Visit the San Francisco Visitor and Conventions Bureau’s website: www.onlyinsanfrancisco.com to lean about Shop Local offers from participating businesses or visit www.sfbg.com/local to find out how to win $500 in the Guardian’s Shop Local Reader’s Contest.

2.jpg
Ark Toy Storefront in Noe Valley

5.jpg
Gavin Newsom kicks off the Shop Local campaign
http://cbs5.com/video/?id=42754@kpix.dayport.com

Decongest me

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› sarah@sfbg.com

San Francisco could raise $35 million to $65 million for public transit improvements annually by charging drivers $3 to cross specific downtown zones during peak travel hours, according to a San Francisco County Transportation Authority congestion pricing study.

The aim of those fees, SFCTA staffers say, is to reduce congestion, making trips faster and more reliable, neighborhoods cleaner, and vehicle emissions lower, all while raising money to improve local and regional public transit and make the city more livable and walkable — improvements they hope will get even more folks out of their cars.

London, Rome, and Stockholm already have congestion pricing schemes, but plans to charge congestion fees in New York got shelved this July, reportedly in large part because of New Jersey officials’ fears that low-income suburban commuters would end up carrying a disproportionate burden of these fees.

As a result of New York’s unanticipated pressing of the pause button, San Francisco now stands poised to become the first city in the United States to introduce congestion pricing. But the plan requires approval from both local officials as well and the state legislature.

As SFCTA executive director Jose Luis Moscovich told the Guardian last week, "The state has control over passage of goods and people. Therefore, if we want to restrict that in any way, e.g. charging a congestion fee, [we] have to get the state’s permission."

If a congestion pricing plan is to go forward, it will need the support of Mayor Gavin Newsom. Wade Crowfoot, the mayor’s climate change advisor, told us, "It’s obvious that the mayor embraces the concept, as he laid out in his 2008 inaugural address."

But Newsom isn’t signing the dotted line just yet. "The mayor wants to make sure that there are no negative impacts that would make people not want to come to San Francisco, or would harm low-income people who live in areas that are not served by public transit and have no other choice but to drive," Crowfoot said.

"We are encouraging the [Transportation Authority] to do vigorous public outreach so that no one feels blindsided," Crowfoot added.

But as SFCTA executive director Jose Luis Moscovich explained Nov. 25 to the supervisors, who also constitute the transportation authority board, even if San Francisco gets the legislative green light, it could take two to three years to implement a congestion pricing plan.

"We’re not making a proposal," Moscovich said. "We’re just showing the initial results of our analysis."

That said, it’s clear Moscovich believes congestion pricing is feasible and would contribute to local, regional, and statewide transit goals.

TOO MANY PEOPLE


With San Francisco planning to accommodate 150,000 new residents and 230,000 new jobs over the next 25 years, Moscovich’s principal transportation planner, Zabe Bent, outlined four scenarios last week that would mitigate impacts in already congested areas.

These scenarios involve a small downtown cordon, a gateway fee with increased parking pricing downtown, a double ring that combines gateway crossings with additional fees downtown, and a cordon that imposes fees on crossings into the city’s northeast corner. (See www.sfmobility.org for details, including maps of the four possible zone scenarios.)

It seems likely the SFCTA will pursue the double ring or northeast cordon option.

As Bent told the board, "If the zone is too small, people will drive around it. And drivers within the zone could end up driving more, thereby eroding anticipated congestion benefits."

But all four scenarios aim to alleviate an additional 382,000 daily trips and 30 percent extra time lost to traffic congestion that would otherwise occur by 2030, according to SFCTA studies.

"We won’t reach environmental goals through clean technology alone," Bent explained. "Even if everyone converted to a Prius, the roads would still be congested."

Observing that it already costs at least $4 to get into the city by car — on top of $2 per gallon for gas and high parking fees — Bent argued that congestion, which cost the city $2 billion in 2005, reduces San Francisco’s competitiveness and quality of life.

Stockholm raised $50 million a year and reduced congestion by 22 percent with congestion fees, while London raised $200 million a year and reduced congestion by 30 percent.

In San Francisco, the SFCTA used computer models to determine that by charging $3 per trip at peak hours, the region would get maximum benefits and minimum impacts.

Discounts would be available for commercial fleets, rentals, car shares, and zone residents, Bent said, with toll payers getting a $1 "fee-bate" and taxis completely exempt.

As Moscovich noted, "Taxis are viewed as an extension of the public transit system."

BIG BUSINESS GRUMBLES


With concerted public outreach scheduled for the next two months, and business groups already grumbling about even talking about any increases to the cost of shopping and commuting with the economy in meltdown, Moscovich warned the supervisors not to wait until after the next economic boom hits, before planning to deal with congestion.

"Now is the right time to study it, but not implement it yet," Moscovich said.

Kathryn Phillips of the Sacramento-based Environmental Defense Fund told the Board that in Stockholm, public support grew to 67 percent once a congestion fee was in place.

"People saw that it reduced congestion, provided more public transit services, and made the city more livable and walkable," Phillips said.

BART director and Livable City executive director Tom Radulovich believes that free downtown transit would make the fees more palatable. "Fares could be collected when you get off the train if you travel outside of the zone," Radulovich said.

Noting that BART is approaching its limits, Muni Metro needs investments, and parking fees are an effective tool for managing congestion, Radulovich added. "Congestion pricing’s main criteria should not be to make traffic move faster. I don’t want to create more dangerous streets, but generally speaking, I think that plan is on the right track."

As for fears that San Francisco’s plans could tank at the state level because of concerns about working-class drivers being unfairly burdened, Radulovich noted that SFCTA studies at Doyle Drive determined that only 6 percent of peak hour drivers are low-income.

"The vast majority are earning more than $50,000 a year," Radulovich said. "And since the number of low-income drivers is very small, they could be given discounts. The real environmental justice issue here is what current congestion levels are doing to people living downtown, who are mostly low-income. They put up with inhumane levels of traffic and congestion, which affects the health and livability of their neighborhoods."

Dave Synder, transportation policy director for SPUR (San Francisco Planning and Urban Research Association), said he believes the regressive tax argument is a misleading attack.

"The truth is, that without the revenues this program will bring, the MTA will have to cut service for poor people, not increase service to meet increased demand for people who can no longer afford to drive," Synder told us.

But several local business groups are claiming that San Francisco doesn’t have a congestion problem compared to European cities.

Ken Cleveland of San Francisco’s Building Owners and Managers Association, said he believes that reports of congestion in San Francisco "are more hype than reality.

"We have no problem compared to London, Rome, and Stockholm," Cleveland said. "Congestion fees may work when you have a huge city with millions of people crammed in, like in London, Manhattan, Rome, but not in San Francisco."

Cleveland urged a hard look at what this increase means for people who drive now. " Fees of $160 a month would be "a real hit" on the middle and working classes, he said.

Jim Lazarus of the San Francisco Chamber of Commerce said he opposed a local cordon, but supports a regional congestion pricing program. "Look out the window at 10.45 a.m., and you’ll see that there is no congestion on Montgomery and Pine," Lazarus told us, noting that unlike London, which covers 600 square miles, San Francisco only has a 49-square-mile footprint.

"If you decide not to go into downtown London, the odds are your taxes, jobs, and revenues will still go into London’s coffers," he said. "That’s not the case in San Francisco. So from a small business point of view, it doesn’t make sense."

Bent says the SFCTA’s study provides numbers that are irrefutable, in terms of showing how travel times are impacted by congestion, during peak hours. "We’re talking about modest improvements in speed, but significant improvements in travel time," Bent said.

The proposed fees won’t affect shoppers, museum-goers, or those going out at night, but would benefit all users of the public transit system, Moscovich said.

"We’re not designing for London, we’re designing for San Francisco," Moscovich told the Guardian. "And this is not an anti-automobile program. This is an effort to achieve a balanced transportation system."

With the congestion fee revenue reinvested in transportation infrastructure, Moscovich adds, public transit will be less crowded, and provide more frequent, faster service.

"It all makes perfect internal sense: folks with the least resources are likely to benefit the most," said Moscovich, who predicts that San Francisco will agree on some form of congestion pricing.

"The mayor wants to be seen as a leader in initiating climate change commitment, and transportation is one of the first ways to achieve this," he said. "Especially since 50 percent of San Francisco’s greenhouse emissions occur during peak hour travel."

"We’re trying to change behavior, not just engineering. We don’t want people in cars. … For every pollution-free Prius, you have diesel buses and older cars sitting in traffic idling, essentially eroding any benefits. The best way to optimize results is to get some cars out of the peak hour."

Sup. Jake McGoldrick, who is president of the SFCTA board and has supported the congestion fee-pricing system since it was implemented in London, said that "business will have to step up [and] make a willing suspension of disbelief to see that enhanced mobility will enhance business opportunities.

"There will be no need to get mauled at the mall," McGoldrick predicts. "San Francisco has wonderful things to offer, not just a sterile, homogenous, single-purpose environment. You can’t match museums and cultural amenities out at the malls. San Francisco is a cultural center, not just a strip mall."

McGoldrick, who is termed out in January, said that the new Board "will lean very positively toward doing this." He added that state representatives, including Sens. Leland Yee and Mark Leno and Assembly Members Fiona Ma and Tom Ammiano "will see the benefits.

"They should be willing to carry the banner because of the long term benefits for their grandchildren," McGoldrick said.

(The Board will consider the congestion pricing scenarios and impacts Dec. 16. See www.sfmobility.org for details of public workshops and meetings.)

The people’s election

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› news@sfbg.com

By midnight Nov. 4, the drama was long over: John McCain had conceded, Barack Obama had delivered his moving victory speech — declaring that “change has come to America” — and the long national nightmare of the Bush years was officially headed for the history books.

But in San Francisco, the party was just getting started.

Outside of Kilowatt, on 16th Street near Guerrero, the crowd of celebrants was dancing to the sounds of a street drummer. In the Castro District, a huge crowd was cheering and chanting Obama’s name. And on Valencia and 19th streets, a spontaneous outpouring of energy filled the intersection. Two police officers stood by watching, and when a reporter asked one if he was planning to try to shut down the celebration and clear the streets, he smiled. “Not now,” he said. “Not now.”

Then, out of nowhere, the crowd began to sing: O say can you see /By the dawn’s early light …

It was a stunning moment, as dramatic as anything we’ve seen in this city in years. In perhaps the most liberal, counterculture section of the nation’s most liberal, counterculture city, young people by the hundreds were proudly singing The Star Spangled Banner. “For the first time in my life,” one crooner announced, “I feel proud to be an American.”

Take that, Fox News. Take that Sean Hannity and Rush Limbaugh and Sarah Palin and the rest of the right-wing bigots who have tried to claim this country for themselves. On Nov. 4, 2008, progressives showed the world that we’re real Americans, too, proud of a country that has learned from its mistakes and corrected its course.

President Obama will let us down soon enough; he almost has to. The task at hand is so daunting, and our collective hopes are so high, that it’s hard to see how anyone could succeed without a few mistakes. In fact, Obama already admitted he won’t be “a perfect president.” And when you get past the rhetoric and the rock star excitement, he’s taken some pretty conservative positions on many of the big issues, from promoting “clean coal” and nuclear power to escautf8g the war in Afghanistan.

But make no mistake about it: electing Barack Obama was a progressive victory. Although he never followed the entire progressive line in his policy positions, he was, and is, the creature of a strong progressive movement that can rightly claim him as its standard-bearer. He was the candidate backed from the beginning by progressives like Supervisors Chris Daly and Ross Mirkarimi (a Green). And only after his improbable nomination did moderates like Mayor Gavin Newsom and Sen. Dianne Feinstein jump on the bandwagon.

From the start, the young, activist, left wing of the Democratic Party was the driving force behind the Obama revolution. And while he has always talked to the Washington bigwigs — and will populate his administration with many of them — he would never have won without the rest of us. And that’s a fact of political life it will be hard for him to ignore, particularly if we don’t let him forget it.

For a few generations of Americans — everyone who turned 18 after 1964 — this was the first presidential election we’ve been able to get truly excited about. It was also the first presidential election that was won, to a significant extent, on the Internet, where progressive sites like dailykos.com raised millions of dollars, generated a small army of ground troops, and drove turnout in both the primaries and the general election. The movement that was built behind Obama can become a profound and powerful force in American politics.

So this was, by any reasonable measure, the People’s Election. And now it’s the job of the people to keep that hope — and that movement — alive, even when its standard-bearer doesn’t always live up to our dreams.

The evidence that this was the People’s Election wasn’t just at the national level. It showed up in the results of the San Francisco elections as well.

This was the election that would demonstrate, for the first time since the return of district elections, whether a concerted, well-funded downtown campaign could trump a progressive grassroots organizing effort. Sure, in 2000, downtown and then-Mayor Willie Brown had their candidates, and the progressives beat them in nearly every race. But that was a time when the mayor’s popularity was in the tank, and San Franciscans of all political stripes were furious at the corruption in City Hall.

“In 2000, I think a third of the votes that the left got came from Republicans,” GOP consultant Chris Bowman, who was only partially joking, told us on election night.

This time around, with the class of 2000 termed out, a popular mayor in office and poll numbers and conventional wisdom both arguing that San Franciscans weren’t happy with the current Board of Supervisors (particularly with some of its members, most notably Chris Daly), many observers believed that a powerful big-money campaign backing some likable supervisorial candidates (with little political baggage) could dislodge the progressive majority.

As late as the week before the election, polls showed that the three swings districts — 1, 3, and 11 — were too close to call, and that in District 1, Chamber of Commerce executive Sue Lee could be heading for a victory over progressive school board member Eric Mar.

And boy, did downtown try. The big business leaders, through groups including the Committee on Jobs, the Chamber, the Association of Realtors, Plan C, the newly-formed Coalition for Responsible Growth, and the Building Owners and Managers Association, poured more than $630,000 into independent expenditures smearing progressive candidates and promoting the downtown choices. Newsom campaigned with Joe Alioto, Jr. in District 3 and Ahsha Safai in District 11. Television ads sought to link Mar, John Avalos, and David Chiu with Daly.

Although the supervisors have no role in running the schools, the Republicans and downtown pushed hard to use a measure aimed at restoring JROTC to the city’s high schools as a wedge against the progressives in the three swing districts. They also went to great lengths — even misstating the candidates’ positions — to tar Mar, Chiu, and Avalos with supporting the legalization of prostitution.

And it didn’t work.

When the votes were counted election night, it became clear that two of the three progressives — Avalos and Chiu — were headed for decisive victories. And Mar was far enough ahead that it appeared he would emerge on top.

How did that happen? Old-fashioned shoe leather. The three campaigns worked the streets hard, knocking on doors, distributing literature, and phone banking.

“I’ve been feeling pretty confident for a week,” Avalos told us election night, noting his campaign’s strong field operation. As he knocked on doors, Avalos came to understand that downtown’s attacks were ineffective: “No one bought their horseshit.”

A few weeks earlier, he hadn’t been so confident. Avalos said that Safai ran a strong, well-funded campaign and personally knocked on lots of doors in the district. But ultimately, Avalos was the candidate with the deepest roots in the district and the longest history of progressive political activism.

“This is really about our neighborhood,” Avalos told us at his election night party at Club Bottom’s Up in the Excelsior District. “It was the people in this room that really turned it around.”

The San Francisco Labor Council and the tenants’ movement also put dozens of organizers on the ground, stepping up particularly strongly as the seemingly coordinated downtown attacks persisted. “It was, quite literally, money against people, and the people won,” Labor Council director Tim Paulson told us.

Robert Haaland, a staffer with the Service Employees International Union and one of the architects of the campaign, put it more colorfully: “We ran the fucking table,” he told us election night. “It’s amazing — we were up against the biggest downtown blitz since district elections.”

The evidence suggests that this election was no anomaly: the progressive movement has taken firm hold in San Francisco, despite the tendency of the old power-brokers — from Newsom to downtown to both of the city’s corporate-owned daily newspapers — to try to marginalize it.

Political analyst David Latterman of Fall Line Analytics began the Nov. 5 presentation at the San Francisco Planning and Urban Research Association election wrap-up by displaying an ideologically-coded map of San Francisco, drawing off of data from the Progressive Voter Index that he developed with San Francisco State University political science professor Rich de Leon. The PVI is based on how San Francisco residents in different parts of the city vote on bellwether candidates and ballot measures.

“Several of the districts in San Francisco discernibly moved to the left over the last four to eight years,” Latterman told the large crowd, which was made up of many of San Francisco’s top political professionals.

The two supervisorial districts that have moved most strongly toward the progressive column in recent years were Districts 1 (the Richmond) and 11 (the Excelsior), which just happened to be two of the three swing districts (the other being District 3–North Beach and Chinatown) that were to decide the balance of power on the Board of Supervisors this election.

Latterman said Districts “1, 3, and 11 went straight progressive, and that’s just the way it is.”

In fact, in many ways, he said this was a status-quo election, with San Francisco validating the progressive-leaning board. “A lot of people in the city didn’t see it as a chance for a drastic change citywide.”

In other words, keeping progressives in City Hall has become a mainstream choice. Whatever downtown’s propaganda tried to say, most San Franciscans are happy with a district-elected board that has brought the city a living-wage law and moved it a step toward universal health insurance.

The fate of the local ballot measures was another indication that Newsom, popular as he might be, has little ability to convince the voters to accept his policy agenda.

Voters rejected efforts by Newsom to consolidate his power, rejecting his supervisorial candidates, his Community Justice Center (as presented in Measure L), and his proposed takeover of the Transportation Authority (soundly defeating Proposition P) while approving measures he opposed, including Propositions M (protecting tenants from harassment) and T (Daly’s guarantee of substance abuse treatment on demand).

Asked about it at a post-election press conference, Newsom tried to put a positive spin on the night. “Prop. A won, and I spent three years of my life on it,” he said. “Prop B. was defeated. Prop. O, I put on the ballot. I think it’s pretty small when you look at the totality of the ballot.” He pointed out that his two appointees — Carmen Chu in District 4 and Sean Elsbernd in District 7 — won handily but made no mention of his support for losing candidates Lee, Alicia Wang, Alioto, Claudine Cheng, and Safai.

“You’ve chosen two as opposed to the totality,” Newsom said of Props. L and P. “Prop. K needed to be defeated. Prop. B needed to be defeated.”

Yet Newsom personally did as little to defeat those measures as he did to support the measures he tried to claim credit for: Measures A (the General Hospital rebuild bond, which everyone supported) and revenue-producing Measures N, O, and Q. In fact, many labor and progressives leaders privately grumbled about Newsom’s absence during the campaign.

Prop. K, which would have decriminalized prostitution, was placed on the ballot by a libertarian-led signature gathering effort, not by the progressive movement. And Prop. B, the affordable housing set-aside measure sponsored by Daly, was only narrowly defeated — after a last-minute attack funded by the landlords.

All three revenue-producing measures won by wide margins. Prop. Q, the payroll tax measure, passed by one of the widest margins — 67-33.

Latterman and Alex Clemens, owner of Barbary Coast Consulting and the SF Usual Suspects Web site, were asked whether downtown might seek to repeal district elections, and both said it didn’t really matter because people seem to support the system. “I can’t imagine, short of a tragedy, district elections going anywhere,” Latterman said.

Clemens said that while downtown’s polling showed that people largely disapprove of the Board of Supervisors — just as they do most legislative bodies — people generally like their district supervisor (a reality supported by the fact that all the incumbents were reelected by sizable margins).

“It ain’t a Board of Supervisors, it is 11 supervisors,” Clemens said, noting how informed and sophisticated the San Francisco electorate is compared to many other cities. “When you try to do a broad-based attack, you frequently end up on the wrong end (of the election outcome).”

We had a bittersweet feeling watching the scene in the Castro on election night. While thousands swarmed into the streets to celebrate Obama’s election, there was no avoiding the fact that the civil-rights movement that has such deep roots in that neighborhood was facing a serious setback.

The Castro was where the late Sup. Harvey Milk started his ground-breaking campaign to stop the anti-gay Briggs Initiative in 1978. Defying the advice of the leaders of the Democratic Party, Milk took on Briggs directly, debating him all over the state and arguing against the measure that would have barred gay and lesbian people from teaching in California’s public schools.

The defeat of the Briggs Initiative was a turning point for the queer movement — and the defeat of Prop. 8, which seeks to outlaw same-sex marriage, should have been another. Just as California was the most epic battle in a nationwide campaign by right-wing bigots 30 years ago, anti-gay marriage measures have been on the ballot all over America. And if California could have rejected that tide, it might have taken the wind out of the effort.

But that wasn’t to be. Although pre-election polls showed Prop. 8 narrowly losing, it was clear by the end of election night that it was headed for victory.

Part of the reason: two religious groups, the Catholics and the Mormons, raised and spent some $25 million to pass the measure. Church-based groups mobilized a reported 100,000 grassroots volunteers to knock on doors throughout California. Yes on 8 volunteers were as visible in cities throughout California as the No on 8 volunteers were on the streets of San Francisco, presenting a popular front that the No on 8 campaign’s $35 million in spending just couldn’t counter — particularly with so many progressive activists, who otherwise would have been walking precincts to defeat Prop. 8, fanned out across the country campaigning for Obama.

“While we knew the odds for success were not with us, we believed Californians could be the first in the nation to defeat the injustice of discriminatory measures like Proposition 8,” a statement on the No on Prop. 8 Web site said. “And while victory is not ours this day, we know that because of the work done here, freedom, fairness, and equality will be ours someday. Just look at how far we have come in a few decades.”

San Francisco City Attorney Dennis Herrera, joined by Los Angeles City Attorney Rocky Delgadillo and Santa Clara County Counsel Ann C. Raven, filed a legal challenge to Prop. 8, arguing that a ballot initiative can’t be used to take away fundamental constitutional rights.

“Such a sweeping redefinition of equal protection would require a constitutional revision rather than a mere amendment,” the petition argued.

“The issue before the court today is of far greater consequence than marriage equality alone,” Herrera said. “Equal protection of the laws is not merely the cornerstone of the California Constitution, it is what separates constitutional democracy from mob rule tyranny. If allowed to stand, Prop. 8 so devastates the principle of equal protection that it endangers the fundamental rights of any potential electoral minority — even for protected classes based on race, religion, national origin, and gender.”

That may succeed. In fact, the state Supreme Court made quite clear in its analysis legalizing same-sex marriage that this was a matter of fundamental rights: “Although defendants maintain that this court has an obligation to defer to the statutory definition of marriage contained in [state law] because that statute — having been adopted through the initiative process — represents the expression of the ‘people’s will,’ this argument fails to take into account the very basic point that the provisions of the California Constitution itself constitute the ultimate expression of the people’s will, and that the fundamental rights embodied within that Constitution for the protection of all persons represent restraints that the people themselves have imposed upon the statutory enactments that may be adopted either by their elected representatives or by the voters through the initiative process.

As the United States Supreme Court explained in West Virginia State Board of Education vs. Barnette (1943) 319 U.S. 624, 638: ‘The very purpose of a Bill of Rights was to withdraw certain subjects from the vicissitudes of political controversy, to place them beyond the reach of majorities and officials and to establish them as legal principles to be applied by the courts. One’s right to life, liberty, and property, to free speech, a free press, freedom of worship and assembly, and other fundamental rights may not be submitted to vote; they depend on the outcome of no elections.'”

As Board of Supervisors President Aaron Peskin told the Guardian later that week: “Luckily, we have an independent judiciary, because the voters of California have mistakenly taken away a class of civil rights.”

But if that legal case fails, this will probably wind up on the state ballot again. And the next campaign will have to be different.

There already have been many discussions about what the No on 8 campaign did wrong and right, but it’s clear that the queer movement needs to reach out to African Americans, particularly black churches. African Americans voted heavily in favor of Prop. 8, and ministers in many congregations preached in favor of the measure.

But there are plenty of black religious leaders who took the other side. In San Francisco the Rev. Amos Brown, who leads the Third Baptist Church, one of the city’s largest African American congregations, spoke powerfully from the pulpit about the connections between the civil rights struggles of the 1960s and the fight for same-sex marriage.

The next time this is on the ballot, progressive and queer leaders will need to build a more broad-based movement. That is not only possible, but almost inevitable.

The good news — and it’s very good news — is that (as Newsom famously proclaimed) same-sex marriage is coming, whether opponents like it or not. That’s because the demographics can’t be denied: the vast majority of voters under 30 support same-sex marriage. This train is going in only one direction, and the last remaining issue is how, and when, to make the next political move.

The progressives didn’t win everything in San Francisco. Proposition H, the Clean Energy Act, was taken down by one of the most high-priced and misleading campaigns in the city’s history. Pacific Gas and Electric Co. spent more than $10 million telling lies about Prop. H, and with the daily newspapers virtually ignoring the measure and never challenging the utility’s claims, the measure went down.

“This was a big, big, big money race,” Latterman said. “In San Francisco, you spend $10 million and you’re going to beat just about anything.”

But activists aren’t giving up on pushing the city in the direction of more renewable energy (see Editorial).

Latterman said the narrow passage of Prop. V, which asked the school board to consider reinstating JROTC, wasn’t really a victory. “I would not call this a mandate. I worked with the campaign, and they weren’t looking for 53 percent. They were looking for 60-plus percent,” Latterman said. “I think you’ll see this issue just go away.”

Neither Latterman nor Clemens would speculate on who the next president of the Board of Supervisors will be, noting that there are just too many variables and options, including the possibility that a newly elected supervisor could seek that position.

At this point the obvious front-runner is Ross Mirkarimi, who not only won re-election but received more votes than any other candidate in any district. Based on results at press time, more than 23,000 people voted for Mirkarimi; Sean Elsbernd, who also had two opponents, received only about 19,000.

Mirkarimi worked hard to get Avalos, Chiu, and Mar elected, sending his own volunteers off to those districts. And with four new progressives elected to the board, joining Mirkarimi and veteran progressive Chris Daly, the progressives ought to retain the top job.

Daly tells us he won’t be a candidate — but he and Mirkarimi are not exactly close, and Daly will probably back someone else — possibly one of the newly elected supervisors.

“It’s going to be the most fascinating election that none of us will participate in,” Clemens said.

The danger, of course, is that the progressives will be unable to agree on a candidate — and a more moderate supervisor will wind up controlling committee appointments and the board agenda.

One of the most important elements of this election — and one that isn’t being discussed much — is the passage of three revenue-generating measures. Voters easily approved a higher real-estate transfer tax and a measure that closed a loophole allowing law firms and other partnerships to avoid the payroll tax. Progressives have tried to raise the transfer tax several times in the past, and have lost hard-fought campaigns.

That may mean that the anti-tax sentiment in the city has been eclipsed by the reality of the city’s devastating budget problems. And while Newsom didn’t do much to push the new tax measures, they will make his life much easier: the cuts the city will face won’t be as deep thanks to the additional $50 million or so in revenue.

It will still be a tough year for the new board. The mayor will push for cuts that the unions who supported the newly elected progressives will resist. A pivotal battle over the city’s future — the eastern neighborhoods rezoning plan — will come before the new board in the spring, when the recent arrivals will barely have had time to move into their offices.

Obama, of course, will face an even tougher spring. But progressives can at least face the future knowing that not only could it have been a lot worse; for once things might be about to get much better.

Amanda Witherell and Sarah Phelan contributed to this report.

Backroom brokers

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› tredmond@sfbg.com

It’s not the invisible hand of Adam Smith tossing hate mail on your doorstep this fall like ugly confetti. It isn’t a distinct and independent group of candidates and civic organizations that just happen to be saying the same things, either. There is a carefully orchestrated campaign going on to undermine the progressive agenda, block affordable housing and clean energy, and give Mayor Gavin Newsom a majority on the Board of Supervisors.

It’s well funded; it’s serious; it’s based on lies — and it’s a threat to rent control, sustainable environmental policies, universal health care, the city’s living wage law, and the rest of the accomplishments and goals of the progressive majority on the board.

If that sounds overblown, listen to what the organizers of this campaign are saying themselves.

On Aug. 15, after progressives took control of the Democratic County Central Committee and installed Sup. Aaron Peskin as chair, John Keogan, the head of a year-old organization called the San Francisco Coalition for Responsible Growth, a pro-downtown group founded to counter the progressive movement, announced his intentions in a letter to allies.

"CRG are [sic] preparing for an all-out attack with other like-minded groups and now is our time to stand-up [sic] and be counted," Keogan wrote. He asked members to support "taking SF on a sharp turn to the right."

Those "other like-minded groups," according to campaign finance reports, are a Who’s Who list of downtown-based organizations that have consistently fought to roll back tenant protections and slash government spending on social services: the Building Owners and Managers Association, the Committee on Jobs, Pacific Gas and Electric Co., the Association of Realtors, the Chamber of Commerce, Plan C, and the Police Officers Association.

By law, political candidates can only raise and spend limited amounts of money. But organizations like BOMA, the Realtors, and Plan C can put as much cash as they want into supporting and opposing candidates — as long as the efforts are "independent."

But the orchestration of the attacks on supervisorial candidates Eric Mar, John Avalos, and David Chiu, and the support for their conservative rivals, Sue Lee, Ahsha Safai, and Joe Alioto, is so sophisticated it’s impossible to believe that these groups and candidates aren’t working together.

Between Sept. 9 and Oct. 20, public records show, the groups spent a combined $363,754 ($178,177 in District 1, $104,308 in D3, and $81,269 in D11) on independent expenditures attacking Avalos, Mar, and Chiu and supporting their opponents. They also spent $20,000 supporting Eva Royale in her long shot race for the solidly progressive District 9 seat.

The landlords and downtown aren’t the only ones organizing. All that spending, and the threat of even more to come considering the hundreds of thousands of dollars these downtown groups still have in the bank, has served to unite tenant and labor groups in ways unseen in previous San Francisco elections.

"There’s an unprecedented coalition between tenants and labor," labor activist Robert Haaland told us. "We’re working together to defeat the landlord candidates, who are also anti-labor."

"We have a tremendous fear that the spending and progress on health care and social services will be rolled back," Tim Paulson, president of the San Francisco Labor Council, told us. "Anything less than our candidates [being elected in each of the three swing districts] will pose a real danger to the movement."

NEWSOM’S SLATE


One of the central players in this attempt to take the city away from the progressives and hand it over to downtown is Mayor Gavin Newsom, who is actively supporting Alioto, Lee, and Safai.

Eric Jaye, the mayor’s chief political advisor, has no formal role in the three district campaigns, but Newsom rarely makes a move in local politics without consulting Jaye. In fact, when reporters call the mayor’s press office to ask for comments on local candidates and initiatives, they are typically referred to the private consultant.

Jaye told us he’s talked to all of Newsom’s candidates. "I told them to run on district issues," he said.

The mayor and the latest member of the Alioto clan to seek office (Joe’s sister, Michela, is already on the board) have walked precincts together. And Newsom is so involved with the downtown effort he’s skipping a major Democratic Party gala (where he was slated to get an award) to spend time instead with the Republican-led Coalition for Responsible Growth (CRG).

Jaye’s main job this fall is running the PG&E campaign against the Clean Energy Act, Proposition H. So far PG&E has spent more than $10 million on the effort, and that number will grow in the final week before the election. Part of that same campaign has been propping up Newsom ally Carmen Chu, who has benefited from thousands of dollars of PG&E spending on her race. Chu’s face is all over PG&E’s No on H fliers.

Another central operator is Alex Tourk, the former Newsom aide who resigned after learning that the mayor had been sexually involved with Tourk’s wife. Tourk is now running the CRG operation.

"They brought me on board to do a volunteer campaign that, yes, they funded, but which seeks to inform voters in a non-partisan fashion where the candidates in D1, 3, and 11 stand on key issues," he said.

That campaign’s goal was to get 10,000 people to mobilize — he called them, using a term popularized by Richard Nixon, the "silent majority."

Tourk maintains that door-hangers the group has been distributing don’t endorse any candidates or push any initiatives. But the messages fit exactly with the overall downtown strategy — they seek to discredit the progressives by linking them with controversial ballot measures such as Proposition V, which would urge the School Board to save the military recruitment program, JROTC.

The supervisors have nothing to do with JROTC, but downtown and the Republican Party are using it as a wedge issue.

CRG is facing some political heat of its own: SF Weekly reported in its Oct. 22 issue that CRG’s recently elected president, engineer Rodrigo Santos, accepted money for professional work from someone who had business before the Building Inspection Commission while he served as commission president. Santos is a Republican, like several key Newsom appointees.

Making matters worse are revelations that Mel Murphy, vice president of the inspection commission and a CRG member, distributed invites in City Hall to an Oct. 17 CRG fundraiser for Safai and Alioto. City officials aren’t supposed to do political work at City Hall.

Alioto’s filings show that on Oct. 17, he received $500 from the firm of Santos and Urrutia’s structural engineer Kelton Finney and $250 from S&U engineer Calvin Hom.

PG&E’S FAKE DEMOCRATIC CLUBS


Political consultants Tom Hsieh Jr. and Jim Ross are involved in the District 1 race (Hsieh also responded to the Guardian on Safai’s behalf) — and are using PG&E and downtown money to support Sue Lee.

Beyond Chron reported Oct. 27 that Hsieh has been sending robocalls in Cantonese to voters saying that Lee is endorsed by the "San Francisco Democratic Party Club." Actually, the Democratic Party endorsed Mar.

What is this new "party club" anyway? Well, the Web site reported, the club started raising money just two weeks ago, and already has collected $30,000 from PG&E, $2,000 from the Chamber of Commerce, $5,000 from GGRA (Golden Gate Restaurant Association), and $70,000 from the Committee on Jobs. Another new club, called the Richmond Reform Democratic Club, is opposing Mar — and has $18,000 from the Committee on Jobs, $5,000 from PG&E, and $2,000 from BOMA.

In television ads paid for by the Realtors, a voiceover tries to link Mar, Avalos, and Chiu to Sup. Chris Daly, whose popularity outside his district is low — although neither Mar nor Chiu has much of a discernable connection to Daly. Avalos was a Daly City Hall aide.

One of the Realtors ads was so utterly inaccurate and deceptive — it claimed Chiu and Avalos support decriminalizing prostitution, when both have publicly opposed the decriminalization ballot measure — that Comcast pulled the ad off the air when Chiu filed a complaint.

Fog City Journal uncovered what appears to be illegal collusion between the police union and Safai. Although candidates are barred from coordinating with groups making independent expenditures on their behalf, POA president Gary Delagnes told FCJ editor Luke Thomas that Safai had given the group a photo of him to use on a mailer, a copyrighted image that Thomas took. Safai denied wrongdoing, but refused to answer further inquiries about the matter.

It’s a pitched battle — labor, the tenants, and the Democratic Party against the landlords, PG&E, downtown interests, and the Republicans. It’s pretty clear which side you want to be on.

Steven T. Jones, Sarah Phelan, and Amanda Witherell contributed to this report.