Mayor

Editorial: How to create jobs in San Francisco

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

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

Gavin watch: The Lt. Gov. rumors

Zelda Bronstein
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Gavin watch: The Lt. Gov. rumors

The rumors that Newsom is going to announce imminently that he’s running for Lt. Governor turned out to be a bit premature.

But I am still hearing from very solid sources that he’s seriously considering jumping into the race — and while the San Francisco left didn’t back his run for governor, this would be a very different campaign. The Lt. Gov. isn’t really in charge of anything, but has a certain amount of power, not just from the platform and the ability to issue press statements (one of Newsom’s favorite hobbies), but because that person gets a seat on the state Lands Commission (offshore oil drilling) and the U.C. Regents (education cuts). Newsom would most likely be fine on both issues.

And the truth is, we all know Newsom doesn’t really want to be a wine clerk.

And lieutenant governors are often well positioned to move on to higher offices it worked for John Kerry, for example (and for Gray Davis, if you call that working). I think Newsom would love to position himself to run for U.S. Senate when Dianne Feinstein, who will be 79 when her current term expires in 2012, decides to retire.

And, of course, from the perspective of progressives infuriated with what he’s done as mayor, it would get him out of town a year early, and let this district-elected board appoint a new chief executive.

That’s got all sorts of talk started, with the typical Chronicle-style “Oh My God Aaron Peskin could be mayor” stuff (and let’s be serious — Peskin would be a way better mayor than the current occupant of Room 200) to serious discussion about how this will affect the 2011 mayor’s race.

If any of the current contenders could round up six votes, it would be a major boost; that person could then run as an incumbent.

I don’t think this board would ever choose state Sen. Leland Yee, who is positioning himself for the run. City Attorney Dennis Herrera? Maybe — but given how pissed some of the progressives are about the Sanctuary Ordiance, it would be a stretch.

Sfist is running a poll, and right now it looks like the readers like Ross Mirkarimi but think Peskin or David Chiu is a more likely winner.

And trust me, even the thought of Gavin leading town has that scramble already heating up.

 

 

How to create jobs in SF

David Talbot
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How to create jobs in SF

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

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

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

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

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

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

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

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

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

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

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

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

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

 

The Gavin and Leah Show

Sasha Cuttler
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With rampant rumors that Mayor Gavin Newsom will announce his candidacy for lieutenant governor as soon as today – and with San Francisco Bicycle Coalition executive director Leah Shahum today announcing a leave of absence – it’s interesting to see the two paired up in Newsom’s latest You Tube video.

While Newsom has been a terrible mayor in many ways – from his frustrating fiscal conservatism to his petulant approach to politics and working with progressive supervisors – he’s actually not too bad on some of the greening initiatives he discusses in this video (which was the subject of our Nov. 18 cover story, “Seizing space”).

Newsom’s war on the public sector

David Talbot
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Newsom’s war on the public sector

 

By Calvin Welch

OPINION With the Feb. 10 release of the Controller’s Office economic analysis of Mayor Gavin Newsom’s proposed tax cuts to businesses, combined with its December 2009 analysis of the Newsom administration’s proposed fee cuts to market-rate condo developers, we now have a clear and objective measurement of this administration’s response to the biggest economic collapse in San Francisco since the Great Depression: the mayor hopes to create 4,400 jobs (of the 39,000 jobs lost in San Francisco since the start of the downturn) and 40 to 50 new market-rate condos over the next two years at the cost of $72 million in lost tax revenues.

The plan includes no affordable housing — zero, zip, nada — below-market rate housing for moderate-income San Franciscans. Instead, the developer fees that fund parks, transit, and other critical neighborhood infrastructure projects promised for the Market Street, Octavia Street, and eastern neighborhoods plan areas will be postponed indefinitely.

Those impacts don’t include the loss of public sector jobs and services. The report rather coyly notes that “the potential impacts of the city revenue decline on public services, and indirectly on the economy, is not considered because the city could adjust to that impact in many ways.” The analysis warns: “However, if the stimulus does not directly incentivize job creation, it may not overcome the loss of public sector employment that the subsidy’s revenue would pay for.”

That last point that needs some attention.

Newsom’s “stimulus” is targeted solely at the private sector, with no requirement that the companies slated to get tax breaks and fee reductions actually perform — either through job growth or housing development. It cuts public sector employment and public sector-led infrastructure development — affordable housing, transit lines, parks and playgrounds — when it’s clear that both public employment and infrastructure development would be a direct stimulus to the local economy.

Quick, name the biggest employer in San Francisco. How about the second biggest — or fourth, sixth, or seventh? Well, they’re all in the public sector: the City and County of San Francisco, the University of California, San Francisco, the State of California, the San Francisco Unified School District, and the U.S. Postal Service top the list. As of 2008, some 85,000 jobs in San Francisco — 15 percent of all jobs in the city — were in the public sector. More than half were in education, and the bulk of the rest were in health and human services.

The Newsom administration’s war, and it is a war, on the public sector is economic suicide. We should look at stimulus as saving as many public sector jobs — especially in education and health and human services — as we can and finance as much local infrastructure development as we can afford. That’s real economic stimulus. What Newsom is proposing is the same old, inside-the-box, tried and failed trickle-down that got us in this ditch in the first place.

Calvin Welch has spent the last four decades working for sane economic development policies in San Francisco.

Newsom’s gonna run? That’s what we’re hearing

Zelda Bronstein
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Newsom’s gonna run? That’s what we’re hearing

Gavin Newsom’s going to announce his campaign for Lt. Governor in a few days.

That’s what inside sources are telling us, anyway. (And the rumor’s been circulating for a bit.) The mayor has been making a lot of phone calls in the past few days, checking in with supporters and lining up allies. And he’s ready to make the leap.

(Other sources say just the opposite, but such is San Francisco politics.)

The move makes a lot of sense from Newsom’s point of view; he’ll be termed out of office in two years, with nothing much to do on the horizion. And for a politician with heavy ambitions, that’s a bad place to be.

In the Lite Gov’s spot, he can keep a high profile, push education issues (the Lt. Gv. is a member of the UC Regents), make a bunch of speeches — and have no responsibility at all for actual follow through, which was never his strong suit.

And he’ll be positioned to run for an office like U.S. Senate should Dianne Feinstein decide to retire.

The issue has always been the local impact: If Newsom wins — and he would enter the race as the odds-on favorite — then he’d have to resign his job as mayor with a year left, and the supervisors would pick an new mayor, who could then run for re-election as an incumbent. Newsom’s money guys have never been happy with the prospect of leaving the city in the hands of a mayor appointed by a progressive majority on a district-elected board, but Newsom’s over that, our sources say. He’s thinking of his own future, and it looks like Sacramento.

So no confirmation, this is still at the rumor stage, but I’m betting he goes for it.

Showdown over a downtown highrise

Zelda Bronstein
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Showdown over a downtown highrise

The battle over 555 Washington — the too-big highrise that will house 248 luxury condos that San Francisco doesn’t need — is going on right now, and you can watch it on sfgtv. 

Supporters and opponents have been testifying for more than two hours. Sue Hestor mae one of the key points toward the end of the testimony: Does “new urbanism” say that we have to fight suburban sprawl by putting 400-foot buildings everywhere in San Francisco?

She also pointed out that the building has so much parking that the lines to get in and out of the underground garage will impact the only downtown fire station, a block away.

Already, Planning Commissioner Hisashi Sugaya is arguing that the EIR on the project is completely bogus and invalid (although he carefully avoiding saying he will vote against the project).

This is one of the major development battles of the year, and will demonstrate whether the Planning Commission and Recreation and Park Commission have the independence and integrity to reject a project the mayor and the Chamber of Commerce support.

 

UPDATE: The hearing ended in the strangest way. After more than two hours of testimony — most of which showed the inadequacy of the EIR, which has to be certified as complete before a final vote on the project itself — Sugaya moved NOT to certify the document. That motion failed, 3-2. At that point, the commission secretary said that the matter would be put off until March 18th.

The strange thing is that if the motion had been in reverse – a motion TO certify — that also would have failed (either way, four yes votes were needed, and two commissioners weren’t there). And then the matter would be over; the EIR would not be certified, and the developer and city planning dept. would have to go back and redo it. In this case, since a motion to reject failed, and there was no motion to accept, it’s not clear where the EIR is.

Aaron Peskin, a foe of the project, told me just now that he doesn’t see how the commission can legally continue the hearing. “There’s nothing to continue,” he said. “There’s no certified EIR.” That, in the end, will be up to the city attorney. I’ll keep you posted. 

Newsom’s $72 million corporate giveaway

Sasha Cuttler
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Newsom’s $72 million corporate giveaway

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

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

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

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

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

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

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

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

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

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

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

Public employees feel blindsided by Newsom’s layoff scheme

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

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

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

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


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

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

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

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

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

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

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

Sunshine and shadows

Jesse Hawthorne Ficks
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Sunshine and shadows

tredmond@sfbg.com

It was, the San Francisco Chronicle proclaimed, the end of the world for development in the city, or at least something close to that. A ballot measure, sponsored by Sup. David Chiu, restricting new buildings from casting shadows on city parks “could imperil major development projects,” a Jan. 28 article by John Cote said. “Everything from a new wing at the San Francisco Museum of Modern Art to the expansion of the Moscone Center and creation of a new downtown core around a rebuilt Transbay Terminal could be affected.”

A lot of that is wildly exaggerated. The Chiu ordinance, which has since been pulled from the ballot pending a city study of the issue, would hardly have halted all development — or even all high-rises — in San Francisco. It wouldn’t have gutted the Transbay Terminal plan (although it might have forced planners to reduce the height of a tower that would soar 400 feet above the tallest building in San Francisco). In fact, the real story is how Chiu has managed — for now — to stop a backroom attempt by developers to undermine a 25-year-old environmental law. We found some fascinating evidence of how Mayor Gavin Newsom has been working with the San Francisco Chamber of Commerce to undermine Chui’s efforts — using broad threats to try to get his way.

Chiu’s legislation sought to clear up a couple of loopholes in a landmark 1984 law, which passed on the ballot as Proposition K. The measure, authored by then-Sup. Bill Maher, essentially barred any new construction that would cast a significant shadow on a city park.

In 1989, the final implementation guidelines were approved, and they’ve stopped literally hundreds of proposed projects from casting dark shadows on public open space.

But in the past year, city planners have been meeting with lawyers for big developers and looking for a way to change the rules. Citing new technology that better measures the curve of the earth and complex algorithms that calculate sunlight, the Planning Department has since proposed revising the Prop. K guidelines — in a way that would allow taller buildings and more shadows without getting the approval of voters or supervisors.

Chiu told us he’s been trying for months to find out exactly what the proposed guidelines would do — how many new buildings, at what heights, would be able to shadow which parks. “I was unable to get any answers,” he said.

The measure he drafted would have barred any new guidelines that allowed more shadows — and would have required the Board of Supervisors to sign off any changes. It would still allow the city to make case-by-case exemptions for projects that cast minor shadows but are otherwise deserving of approval — affordable housing developments, for example.

But downtown went nuts — and Newsom joined the fray.

The crux of the opposition came from the Chamber — and is outlined in an e-mail from Chamber Vice President Rob Black to members of the Chamber board.

“The mayor was very direct and clear about the need to defeat the measure,” the e-mail, which we obtained, states. “The mayor was also very clear that he was in no mood for deal-making on the issue and that he would look very unfavorably on any developer or anyone else who tries to cut a deal with David Chiu on the issue. He literally said, you will be on your own for the next two years if you go there.”

Black confirmed that the e-mail was in fact his — but said the version we’d obtained “has been edited. Some words were changed and other omitted.” He refused to say what the changes were, saying that the e-mail was meant to be a confidential communication to his board. However, he confirmed that the basic message and descriptions of a meeting with Newsom were accurate.

Tony Winnicker, Newsom’s press secretary, confirmed that Newsom had been directly involved in trying to scuttle the ordinance — and didn’t deny the mayor had made those threats.

“The mayor made clear the importance of asking the supervisor to withdraw the measure,” Winnicker wrote in an e-mail to us. “The mayor was clear that backroom deal-making should not be tolerated on the issue.”

Chiu was somewhat aghast at the mayor’s statements. “The context for all this is that the developers and their lawyers were trying to change the rules,” he said.

Aaron Peskin, the former supervisor and longtime North Beach neighborhood activist, told us that the “hysteria around this is factually untrue. This isn’t about stopping development — it’s about making sure development doesn’t have an adverse impact on the city’s common space.”

So now Chiu has agreed to hold off — but only if the key stakeholders (not just developers) have some input into how planning devises new shadow rules. And he’s ready to go back to the ballot in November if the developers try to play games again.

That makes sense, Gabriel Metcalf, executive director of the San Francisco Planning and Urban Research Association, told us. “There should be a heavy burden of proof on the people who want new rules,” he said. “And there should be a heavy burden of proof for anyone who wants a ballot measure.”

In other words, Prop. K — as it is, as it’s stood all these years — is working pretty well. And if the developers hadn’t tried to sneak in some big changes, none of this would have happened in the first place.

The “jobs” shell game

Jesse Hawthorne Ficks
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0
The “jobs” shell game

Written with Nima Maghame

news@sfbg.com

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Adam Lesser contributed to this report

 

Biotech’s bonanza

Jesse Hawthorne Ficks
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0
Biotech’s bonanza

By Adam Lesser

news@sfbg.com

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Editorial: The attack on district elections

David Talbot
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0

Nobody can honestly say that the district supervisors have ignored citywide issues or that they don’t have a citywide perspective.

The Chamber of Commerce, the Mayor’s Office, and the San Francisco Chronicle have created, apparently out of whole cloth, a new attack on district elections of supervisors. And although there’s no campaign or formal proposal on the table, the new move needs to be taken seriously.

And it’s important to understand from the start what this is really about.

The Chamber and the Chron are talking about the need for more “citywide perspective,” trying to spin the notion that supervisors elected by district care only about micro-local, parochial issues. But after 10 years of district elections, the record is exactly the opposite. District-elected supervisors have devoted themselves to a long string of exceptional citywide reform measures and have been guilty of very little district pandering.

Consider a few examples:

• Healthy San Francisco, the local effort at universal health care that has drawn national attention and plaudits from President Obama, was a product of the district board, led by then-Sup. Tom Ammiano. So was the rainy day fund, which has provided millions to the public schools and prevented widespread teacher layoffs.

• The district board reformed the makeup of the Planning Commission, Police Commission, and Board of Appeals.

• District-elected Sup. Ross Mirkarimi’s legislation restricting the use of plastic bags has been hailed by environmental groups all over the country.

• The district board passed the city’s minimum wage and sick day laws.

• The district board created a citywide infrastructure plan and bond program.

• Community choice aggregation, a direct challenge to Pacific Gas and Electric Co. that will bring San Francisco clean energy and lower electricity rates, is entirely a product of the district board. So is campaign finance reform, sanctuary city protecting for immigrants, a long list of tenant-protecting laws … the list goes on and on. What significant policy initiatives came out of the previous 10 years of at-large supervisors? Very little — except the promotion of hyper-expensive live-work lofts; the displacement of thousands of tenants, artists, and low-income people; and the economic cleansing of San Francisco, all on behalf of the dot-com boom, real estate speculators, and developers.

People can agree or disagree with what the board has done in the past decade, but nobody can honestly say that the district supervisors have ignored citywide issues or that they don’t have a citywide perspective.

No, this has nothing to do with citywide issues vs. district issues. It’s entirely about policy — about the fact that district supervisors are more progressive. About the fact that downtown can’t possibly get a majority under a district system — because with small districts, big money can’t carry the day.

Under an at-large system, nobody can seriously run for supervisor without at lest $250,000, and candidates who start off without high name recognition need twice that. There’s only one way to get that kind of money — and it’s not from protecting tenants and immigrants and fighting developers and PG&E.

In a district system, grassroots organizing — the stuff that labor and nonprofits and progressive groups are good at — is more important than raising money. So district supes are accountable to a different constituency.

Polls consistently show that people like having district supervisors — and for good reason. With at-large elections, the only people who have regular, direct access to the supervisors are big donors and lobbyists who can deliver money. District supervisors are out in the neighborhoods, take phone calls from community activists, and are far more accessible to their constituents.

So instead of trying to repeal the district system, the Chamber has come up with this “hybrid” effort. The idea would be to reduce the number of districts to seven and elect four supervisors citywide.

What that means, of course, is that a third of the board, elected on a pile of money, will be pretty much call-up votes for downtown. With two more from the more conservative districts, you’ve got a majority.

So this is about money and political control, and about the political direction the city is going, and about who’s going to set that direction. That’s the message progressive leaders need to start putting out, now. And every incumbent supervisor, and every candidate for supervisor, needs to make preservation of district elections a public priority

 

Editor’s Notes

David Talbot
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0
Editor’s Notes

tredmond@sfbg.com

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

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

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

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

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

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

The attack on district elections

David Talbot
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3
The attack on district elections

EDITORIAL The Chamber of Commerce, the Mayor’s Office, and the San Francisco Chronicle have created, apparently out of whole cloth, a new attack on district elections of supervisors. And although there’s no campaign or formal proposal on the table, the new move needs to be taken seriously.

And it’s important to understand from the start what this is really about.

The Chamber and the Chron are talking about the need for more “citywide perspective,” trying to spin the notion that supervisors elected by district care only about micro-local, parochial issues. But after 10 years of district elections, the record is exactly the opposite. District-elected supervisors have devoted themselves to a long string of exceptional citywide reform measures and have been guilty of very little district pandering.

Consider a few examples:

• Healthy San Francisco, the local effort at universal health care that has drawn national attention and plaudits from President Obama, was a product of the district board, led by then-Sup. Tom Ammiano. So was the rainy day fund, which has provided millions to the public schools and prevented widespread teacher layoffs.

• The district board reformed the makeup of the Planning Commission, Police Commission, and Board of Appeals.

• District-elected Sup. Ross Mirkarimi’s legislation restricting the use of plastic bags has been hailed by environmental groups all over the country.

• The district board passed the city’s minimum wage and sick day laws.

• The district board created a citywide infrastructure plan and bond program.

• Community choice aggregation, a direct challenge to Pacific Gas and Electric Co. that will bring San Francisco clean energy and lower electricity rates, is entirely a product of the district board. So is campaign finance reform, sanctuary city protecting for immigrants, a long list of tenant-protecting laws … the list goes on and on. What significant policy initiatives came out of the previous 10 years of at-large supervisors? Very little — except the promotion of hyper-expensive live-work lofts; the displacement of thousands of tenants, artists, and low-income people; and the economic cleansing of San Francisco, all on behalf of the dot-com boom, real estate speculators, and developers.

People can agree or disagree with what the board has done in the past decade, but nobody can honestly say that the district supervisors have ignored citywide issues or that they don’t have a citywide perspective.

No, this has nothing to do with citywide issues vs. district issues. It’s entirely about policy — about the fact that district supervisors are more progressive. About the fact that downtown can’t possibly get a majority under a district system — because with small districts, big money can’t carry the day.

Under an at-large system, nobody can seriously run for supervisor without at lest $250,000, and candidates who start off without high name recognition need twice that. There’s only one way to get that kind of money — and it’s not from protecting tenants and immigrants and fighting developers and PG&E.

In a district system, grassroots organizing — the stuff that labor and nonprofits and progressive groups are good at — is more important than raising money. So district supes are accountable to a different constituency.

Polls consistently show that people like having district supervisors — and for good reason. With at-large elections, the only people who have regular, direct access to the supervisors are big donors and lobbyists who can deliver money. District supervisors are out in the neighborhoods, take phone calls from community activists, and are far more accessible to their constituents.

So instead of trying to repeal the district system, the Chamber has come up with this “hybrid” effort. The idea would be to reduce the number of districts to seven and elect four supervisors citywide.

What that means, of course, is that a third of the board, elected on a pile of money, will be pretty much call-up votes for downtown. With two more from the more conservative districts, you’ve got a majority.

So this is about money and political control, and about the political direction the city is going, and about who’s going to set that direction. That’s the message progressive leaders need to start putting out, now. And every incumbent supervisor, and every candidate for supervisor, needs to make preservation of district elections a public priority.

Why Newsom drives me nuts

Zelda Bronstein
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2

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


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


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


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


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



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


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




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



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


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


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


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


Winnicker:



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


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


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


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


Drives me nuts.


 


 


 


 

Newsom’s perplexing attack on San Francisco’s economy

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

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

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

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

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

 

Memorial for Charles Lee Smith (1925-2010), passionate pamphleteer

Jesse Hawthorne Ficks
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1
Memorial for Charles Lee Smith (1925-2010), passionate pamphleteer

Memorial services for Charles Lee Smith, a classic liberal activist whose hero was Tom Paine and whose passion was pamphleteering, will be held at 3 p.m. on Friday, Feb. 12, at the Friends Meeting House, Walnut and Vine, in Berkeley. He died at his Berkeley home on Jan. 7 at 84.

His wife Anne said that Charlie, as we all called him, fell in December and never fully recovered. She brought him home under hospice care on Jan. 5 and she and his two sons Greg and Jay were with him his last three days.

Charlie first contacted me in the early days of the Guardian in the late l960s. I soon realized that he was my kind of liberal, always working tirelessly, cheerfully, and quietly to make things better for people and their communities. He was a remarkable man with a remarkable range of interests and causes that he pursued his entire life.

He campaigned endlessly for causes ranging from the successful fight to stop Pacific Gas and Electric Co. from building a nuclear power plant on Bodega Bay to integrating the Berkeley schools to third brake lights for cars to one-way tolls on bridges to disaster preparedness to traffic safety and circles to public power and keep tabs on PG@E and big business shenanigans.


When he first began sending tips our way, he was working with, among many others, UC Berkeley Professor Paul Taylor with his battles with the agribusiness interests. He was helping UC Berkeley professor Joe Neilands on his public power campaigns. I remember a key public power meeting that Joe and Charlie put together in a Berkeley restaurant. It brought together the sturdy public power advocates of that era. Charlie did much of the staff work and was seated at the speaker’s table next to the sign that read, Public Power Users Association.

I credit that event and its assemblage of public power activists as inspiring the Guardian to make public power and kicking PG@E out of City Halls a major crusade that continues to this day. Charlie and Joe rounded up, among others, then CPUC commissioner Bill Bennett, consumer writer Jennifer Cross, William Domhoff, the UC Santa Cruz political science professor who was the main speaker, and Peter Petrakis, a student of Neilands’ in biochemistry who researched and wrote the Guardian’s early pioneering stories on the PG@E/Raker Act scandal. (See Guardian stories and editorials since l969.) The room was also full of veteran public power warriors from PG@E battles in Berkeley, San Francisco, and around the bay.

Charlie was a lifelong volunteer for the Quakers and pamphleteered on many of their projects.

My favorite story was how he was helping Dr. Ben Yellen, a feisty liberal pamphleteer in Brawley. Yellen and Charlie were political and pamphleteering soulmates, but Charlie was operating in liberal Berkeley and Yellen was in very conservative Imperial County.

Yellen was blasting away at the absentee land owners who were cheating migrant laborers on health care, on high private power costs of city dwellers, and the misuse of government water subsidies. And so he had trouble getting his leaflets printed in Brawley. He would send leaflets up to Charlie and Charlie would get them duplicated and then send the copies back to Yellen. Yellen would distribute them, mimeographed material on legal-sized yellow construction paper, under windshield wipers during the early morning hours and into open car windows on hot afternoons.

Charlie relished promoting Yellen as a classic in the world of pamphleteering and loved to talk about how Yellen followed up his pamphleteering with several pro per lawsuits, an appearance on CBS’ 60 Minutes television show, and a case that went to the U.S. Supreme Court.

Charlie liked to talk about his triple play of information distribution. He pamphleteered on street corners, prepared more than 50 bibliographies of undiscussed issues (including the best bibliography ever done on San Francisco’s Raker Act Scandal), and circulated his personal essays and cut and pasted newspaper articles. Almost every day, he would take the newspapers from the sidewalk near his house and put them on the front porches of his neighbors. He got some exercise, since his house was on a Berkeley hill, and he endeared himself to his neighbors. He was given the title of “Mayor of San Mateo Road.”

Charlie pamphleteered on more than l50 “undiscussed subjects,” as he called them, in Berkeley, Oakland and San Francisco. He sometimes went out to Palo Alto, Santa Rosa, and Napa, with occasional excursions to Boston and London. His subjects were practical and straightforward but breathtaking in their range: humanizing bureaucracy, employee suggestions, penal reform, illiteracy, migant labor, water, energy, land reform, ombudsmen, coop issues, library use, land value taxation, transportation, disaster recovery planning. He handed out KPFA folios and an occasional Bay Guardian.

He often combined pamphleteering with doing bibliographies to spread the word about the undiscussed subjects.  On the first Earth Day in l970 at California State University, Hayward, Charlie spoke about the evils of automoblies. Then he distributed his bibliography of the Automobile Bureaucracy. In recognizable Charliese, he produced a blizzard of numbered citations on a summary of his speech so the audience could read further on his issues.

He considered pamphleteering as a noble form of communication that “went on during the colonial Period for a l00 years before the revolution and the arrival of Tom Paine in l775,” as he put it in his own pamphlet, “Pamphleteering: an old tradition.” He wrote that his main contribution “is the novel use of sandwich boards to screen out the disinterested while reaching the already-interested and open-minded persons with leaflets on the street, but not invading anyone’s privacy.”

Sometimes, Charlie had news close to home.

He said that giving out pamphlets to one or two people at a time was like holding a meeting with those persons and thus it was possible to have a “meeting” with several hundred people nearly anywhere within reasonable limits. He concluded that pamphleteering was “basic to building support for worthwhile projects” and claimes that it “may even be more effective than other forms of expensive communication.”

Charlie knew how to work the streets, but he also knew how to work inside the bowels of the bureaucracy. He worked for the California Division of Highways (now Caltrans) from l953 to 1987, mostly in an Oak Street office in San Francisco. I admit when Charlie talked to me about fighting bureaucracy, as he often did, I had trouble understanding how he was going about it. But Charlie had his ways.

Executive Editor Tim Redmond recalls that Charlie worked for Caltrans back in the days when the very thought there might be transportation modes other than highways was heresy.

He was an advocate of bicycles, carpools and public transit and Redmond thought that, when he first met Charlie in l984, “he must be like the monks in the middle ages, huddled in a corner trying to preserve knowledge. Nobody else at Caltrans wanted to talk about getting cars off the roads. Nobody wanted to shift spending priorities. Nobody wanted to point out that highrise development in San Francisco was causing traffic problems all over the Bay Area–and that the answer was slower development, not more highways.

“But Charlie said all those things. He told me where the secrets of Caltrans were hidden, what those dense environmental impact reports really showed, and how the agency was failing the public. I had a special card in my old l980s Rolodex labeled ‘Caltrans: Inside Source.’ The number went directly to Smith’s desk.” Charlie usually carpooled from Berkeley to his San Francisco office.

Charlie wrote a leaflet about the “Work Improvement Program” that then Gov. Pat Brown instituted in l960. It was, he wrote, a “novel program to get all state employees to submit ideas to improve their work.” Charlie labeled it “corrupt” and laid out the damning evidence. No appeal procedure. No protection for the employee making suggestions that the supervisor or organization didn’t want to use. No requirement for giving the employee credit for the idea or for following up the idea.

Charlie noted that he was a generalist with lots of ideas, read lots of publications, and was “sensitive to the problems that bother people.” He noted that there were l,500 employees in his Caltrans district who submitted 236 suggestions. Charlie submitted 35 of them.  But, he noted wryly, “my supervisor, Charles Nordfelt, did not respond at all to any of my suggestions.” And then, to make neatly make his point, Charlie listed a few of his suggestions, all of them practical and useful.

Many were adopted without Charlie ever getting credit. Others were adopted decades later. For example, he pushed the then-heretical idea of collecting tolls on a one-way basis only, instead of collecting them two ways. He noted that the tolls are now  being collected on the wrong side of the bridge. They should, he argued,  be collected coming from  the San Francisco side, where the few lanes of the bridge open up to many lanes. This would reduce or eliminate congestion. .

He listed other suggestions that showed his firm and creative grasp of the useful idea. Putting the third stop light on vehicles (which was finally put into effect in 1985). Numbering interchanges. Installing flashing red and yellow lights at different rates. (He  explained that his wife’s grandfather was color blind and drove through a flashing red light when she was with him.) Getting vehicle owners to have reflective white strips on the front bumpers of their cars, helping police spot stolen vehicles. Some of his suggestions are still percolating deep in the bureaucracies and may yet go into effect.

Charlie never got the hang of the internet but he covered more territory and reached more people in his personal face-to-face way than anybody ever did on the internet.

Charlie was born on a homestead farm eight miles from Weldona, Colorado. He attended a one-room school house and then moved on to a middle and high school in Ft. Morgan, Colorado. He got “ink in his blood,” as he liked to say, by working on the school paper called the Megaphone and then as a printer’s devil at the weekly Morgan Herald.

He was drafted into the army in l943 and served as an infantryman with the 343rd regiment, 86th Infantry Division. He was severely sounded in 1945 in the Ruhr Pocket battle near Cologne, Germany, the last major battle of the war. He suffered leg and hip injuries and had a l6 inch gouge  out of his right hip that cut within a quarter inch of the bone. He spent six months in the hospital. He was recommended for sergeant but he refused the promotion and ended the war as a private first class.

After his recovery, Charlie came to the Bay Area and took his undergraduate work at Napa Community College and San Francisco State, then did graduate work in sociology at the University of Washington, and in city and regional planning at the University of California-Berkeley.

In 1949, Charlie joined the American Friends Service Committee and became a lifelong volunteer, working on a host of projects. He did everything from helping with a clothing drive in Napa to being part of the crew that built the original Neighborhood House in Richmond.

Charlie met Anne Read in l954, a college student in Oregon, when she was on an AFSC summer project in Berkeley. Charlie visited the project, spotted Anne, and double dated with her. When she returned to Oregon State for her senior year, Charlie wrote her every single day. The two were married the following summer in June of l955.

Charlie is survived by Anne, two sons Greg and Jay, daughter-in-laws Karen Vartarian and Andrea Paulos, and granddaughter Mabel.

The family asks that, in lieu of flowers, please send a donation in Charlie’s name to the American Friends Service Committee, 65 9th St., San Francisco, Calif. 94l03.

I asked Anne why Charlie, the inveterate communicator, had not taken to the internet. Charlie, she replied, was a print guy and simply could not understand the internet. “He never ever used email,” she said. “He still thought he had to go to a library to make up a bibliography. I think Charlie was so sure that making a bibliography meant a lot of hard work, he couldn’t possibly do it on the internet.”

Well, Charlie, you may have missed the internet but you covered more territory and reached more people in your direct personal way with good ideas than anybody ever did on the internet.

Here are some of Charlie’s favorite pamphlets:
Governor Pat Brown’s Work Improvement Program
Pamphleteering: An Old Tradition
Short Statement on Plamphleteering

Gavin for Lite Guv?

Jesse Hawthorne Ficks
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Gavin for Lite Guv?

Willie Brown thinks it’s a good idea. And you can tell Newsom wants to consider it, since he knows there’s nothing else obvious for him to do once his term as mayor is up — and there are going to be a lot of options not too far down the road. Sen. Dianne Feinstein isn’t getting any younger, and at some point she’ll retire. If Jerry Brown doesn’t get elected governor, the Democrats will be looking for someone very different in four years. But once a politician like Newsom is out of office and out of the spotlight, he’ll have a hard time coming back.

So he could sit up there in the Lite Gov’s office, doing what John Garamendi did — taking on issues like cuts to the University of California (the Lt. Gov. sits on the Board of Regents) and making speeches about reform, and maybe he could get out in front of this constitutional convention stuff, and keep his name in the news, without having to make a single difficult or unpleasant decision that he can be blamed for later.

You know he wants to do it ….

But there’s this problem, and for Newsom, it’s very real.

As people close to the mayor have told me repeatedly, the money people who helped put the mayor in office — and who would have to be around to help him run for any other office — are not at all pleased with the prospect of Newsom leaving San Francisco a year early. See, that would give the district-elected supervisors the chance to fill the mayor’s job for the last year of Newsom’s term, and the person they appointed would be able to run as an incumbent.

And while it’s not clear who could get six votes (David Chiu? David Campos? Ross Mirkarimi? Aaron Peskin?) it’s pretty clear that the new mayor would not be an ally of Newsom’s pals.

Sure, when he was running for governor, it seemed fine — having their guy in charge of the state was worth the loss of the San Francisco mayor’s office. But for a relatively powerless job? I think they’d crucify him.

The attack on district elections begins

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The attack on district elections begins

I knew it was coming. After ten years of district-elected supervisors promoting progressive policies (minimum wage and sick day laws, universal health care, tenant protections, public power, development limits, affordable housing etc.) downtown has finally figured out how to launch a counter-attack. It was announced this morning in the pages of the Chronicle

I knew it was coming. After ten years of district-elected supervisors promoting progressive policies (minimum wage and sick day laws, universal health care, tenant protections, public power, development limits, affordable housing etc.) downtown has finally figured out how to launch a counter-attack. It was announced this morning in the pages of the Chronicle

The idea is to replace some of the district supes with at-large representatives – say, four of the 11. That Chamber of Commerce is doing a poll on the issue. Expect a November ballot initiative.

C.W. Nevius chimed in, too, arguing in favor of the “hybrid” (sounds so much like an eco-friendly car) system.

The line is going to be this: District supervisors don’t pay attention to citywide issues.

“People like the idea of being able to talk to a district supervisor about neighborhood problems, but also feel that they want someone they can go to with broader, citywide concerns,” said Steve Falk, president and CEO of the San Francisco Chamber of Commerce.

Or as Nevius puts it:

The truth is that San Francisco has more supervisors than any county in California. Is it too much to ask that a few of them have the entire city’s best interest in mind?

Let’s consider for a moment what this is really about.

For starters, get rid of the nonsense about a “citywide perspective.” Even Nevius didn’t try to push that too hard when I emailed him with the facts, to wit: Over the past ten years, district-elected supervisors have devoted themselves to a long string of exceptional citywide reform measures and have been guilty of very little district pandering.

Consider a few examples:

Healthy San Francisco
The Rainy-Day Fund
Reforming the makeup of the Planning Commission, Police Commission and Board of Appeals
Restricting the use of plastic bags
Minimum wage and sick day laws
A citywide infrastructure plan and bond program
Community choice aggregation and green energy
Campaign finance reform
Sanctuary city protecting for immigrants

The list goes on and on.

You may agree or disagree with what this board has done, but nobody can honestly say that the district supervisors have ignored citywide issues or that they don’t have a citywide persoective. No: This has nothing to do with citywide issues vs. district issues. It’s entirely about policy – about the fact that district supervisors are more progressive. About the fact that downtown can’t possibly get a majority under a district system – because with those small districts that Nevius complains about, big money can’t carry the day.

In a district system, grassroots organizing – the stuff that labor and nonprofits and progressive groups are good at – is more important than raising money. So district supes are accountable to a different constituency.

I watched an at-large board for almost 20 years, and it was, by and large, a collection of sold-out hacks who did exactly what the mayor and the downtown donors said. It was really pathetic.

The polls have consistently shown that people like have district supes, so now there’s this “hybrid” effort.

Here’s what it means:

Right now, there are three districts that will generally elect a more conservative representative – D 2 (Michela Alioto-Pier) D- 4 (Carmen Chu) and D-7 (Sean Elsbernd). Districts 8, 10, 11 and 1 are swing districts, and the rest are going to go generally progressive.

So the odds are under this system that the left-leaning constituencies will have at least six votes, and in good times, as many as eight.

Now take four of those votes away, pretty much forever. Set it up so that four supervisors, elected citywide, will be guaranteed downtown call-up votes. Then add in one or two more from the more conservative districts, and you’ve got a majority.

That, my friends, is exactly what this is about, and any effort to frame it as anything else is just spin.

I asked Nevius what the hell he was doing buying the bogus argument that we need citywide perspective – since the district board has already demonstrated that, consistently. Here’s his response:

First, I’d envision the city-wide supes as made to order swing votes. When a district supervisor had a good idea, let’s say Healthy San Francisco, it might not be an issue of critical interest for a district supervisor. But it would be right in the wheelhouse for a city-wide official, who is looking for broad stroke issues to back. And, although you didn’t advance the idea, I’d reject the notion that whomever it was that was elected city-wide would be incredibly conservative and obstructionist. The most moderate politician we’ve elected in this city is Gavin Newsom. Although the Guardian doesn’t agree with him much of the time, he’s still advanced some very progressive ideas. Everyone jumps on the Chris Daly example as why district elections are a problem, but I think we can look beyond that. I think he’s been an aberration. District supes like David Campos and David Chiu have proved they can compromise and govern so I think that’s a good thing. I would never advocate that we get rid of representation in the neighborhoods. But c’mon, 11 little districts in a very small city? As Jim Stearns said, some of the districts are no more than a mile square. Combining some of them would still let residents have someone they could call to get the potholes fixed, but also spread out the areas.

Okay, I didn’t say citywide supes would be conservative. Sean Elsbernd is (relatively) conservative. He’s also independent of any big-money interest and does what he thinks is right. He doesn’t need half a million dollars to get elected in his district.

What I say is that citywide supes would be in hock to big money. I’ve seen it, lived with it. Suffered from it.

And guess what: Healthy San Francisco didn’t need any citywide supes; it passed just fine with the district board.

So what this is about is money and political control, and it’s about the political direction the city is going and who’s going to set that direction. Let’s get that straight and be honest about, and then we can have this discussion.

Recalling Sophie Maxwell

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Written with Adrian Castañeda

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

On pension reform, a way forward

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On pension reform, a way forward

EDITORIAL Sup. Sean Elsbernd is taking on one of the most complicated and politically tricky issues in San Francisco — reforming the pension fund and health care system for retired city employees. He’s right that the system needs reform — but his measure has some serious drawbacks and needs some significant amendments.

The problems facing the system are so confusing, and the legal and financial aspects so arcane, that it’s hard for anyone to grasp the full situation. But we can sum it up pretty simply:

San Francisco’s pension fund is in far better shape than pension funds in many cities and is a long way from any financial crisis. But over the next few years, thanks to weak stock market performance, the city’s cash obligation — the amount of general fund money that must be paid into the retirement system — is going to rise quickly into the hundreds of millions of dollars.

The retiree health care system is in a lot more trouble — with the rising cost of care, the city will be on the hook for a serious amount of money over the next decade or two. And since the obvious answer — a single-payer system that would cut costs immensely — isn’t anywhere on the immediate political horizon, the San Francisco supervisors need to address the problem.

Elsbernd’s proposed fix is also complicated; the main legislation runs 61 pages. But in essence, he wants to make sure all city employees pay directly into the system; raise the amounts new employees, cops, and firefighters contribute; and set up a rainy-day fund to divert excess pension revenue in good years into a trust that could fund health care pension obligations in down years. He’s also going after a scam common in the police and fire departments where people about to retire get sudden promotions and big salary bumps for a few months, then collect pensions based on the higher pay scale.

The first part is — and should be — almost certainly dead. Members of the Service Employees International Union local 1021 agreed several years ago as part of contract negotiations to give up a pay hike; in exchange, the city agreed to take over the workers’ obligation to pay into the pension fund. Changing that, and outlawing any similar deals in the future, is unacceptable to labor and could drag down the whole proposal.

It’s also tricky to raise pension contributions for “new employees” since Mayor Gavin Newsom has been firing people then rehiring them at lower pay rates. Do those people lose their pension seniority? That has to be fixed.

But given the sweet deal cops and firefighters have, it’s entirely appropriate to ask them to contribute more to retirement. And while some city employees actually get and deserve raises in their final year of work (and the language in Elsbernd’s bill doesn’t address this and needs work), pension spiking is a problem that tends to give extra cash to people who are on the higher end of the pay scale at the expense of lower-paid workers.

And the heart of his proposal — to set up a trust fund for excess money in good years — deserves serious consideration. Yes, it’s a set-aside, and yes, there are legal complications. But the cost of doing nothing is too high to ignore.

Elsbernd should have done this differently — he should have met in advance with all the stakeholders and sought to hammer out a compromise. Even so, there’s a lot for progressives to work with here. If Elsbernd is willing to engage with labor and the board majority, and the progressive supervisors are willing to acknowledge the problem and look for amendments that make this bill acceptable, there’s a way for the city to come out ahead.

Sup. David Campos has moved to “split the file” — that is, to turn the Elsbernd bill into two identical measures. The move gives the progressives a chance to make amendments even if Elsbernd doesn’t want to go along, and could wind up giving the supervisors a choice between two competing measures. We’d prefer that Elsbernd work with his colleagues on a measure everyone can back. But in the end, the best option is a charter amendment that fixes the problems Elsbernd has identified — without being unfair to city employees.

And if Elsbernd and the progressives can come to a deal, there’s a lesson here for the mayor: if you try to work with your opponents, you can actually get things done.

Editor’s Notes

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Editor’s Notes

The mayor of San Francisco is mad that the Board of Supervisors won’t even schedule a hearing on his proposals to stimulate business and job creation in San Francisco. He ought to be happy. If this loopy plan ever gets to the point of open, full discussion, Gavin Newsom will wind up with a real political embarrassment.

Let’s analyze, for example, the suggestion that the city waive payroll taxes for biotech companies. That’s supposed to make those companies more likely to hire new people. After all, any economist knows that taxing something discourages people from doing it, so taxing a payroll ought to make companies less likely to hire. And getting rid of that tax ought to create jobs.

Well, since one of the things I do is help run a small business in San Francisco, let me explain how it actually works.

Say you’re a biotech company that wants to hire a new entry-level worker at a modest $35,000 a year. Can you afford it? Let’s cost it out.

There’s the salary, of course. Then there’s the 7.5 percent you’re paying in federal Social Security tax. That’s $2,626 more. And since you’re in San Francisco, you’re paying for health insurance; that’s probably between $2,000 and $4,000 a year, depending on the plan, but let’s peg it at the city’s minimum mandate, which is $1.09 an hour, or $2,267.

So now your $35,000 worker costs $39,893. Then there’s unemployment and disability insurance and workers’ compensation. The person’s going to need a desk and a chair, or a lab bench and a stool (and they have to be ergonomically correct), and probably a computer, a phone line, and software. And you’re going to have to spend some money on training. You’re going to offer a couple weeks of paid vacation, right? And you have to give sick days. So you have to account for the money you’re spending to cover your new worker when he or she isn’t working. If it all pencils out at less than $42,000, you’re doing well.

Oh, wait, I forgot — there’s the damn city payroll tax. That job-killing factor that could make the difference between hiring and not hiring. Better account for that; it could be a deal breaker.

Are you holding your breath? Ready for the ax to fall? Here you go: the payroll tax on your new hire is a whopping $525 a year. About $10 a week. You probably spent more on the help wanted ads.

So let’s be honest — the payroll tax may sound awful (and actually, I think a gross receipts tax would be more fair, for a lot of reasons). But suspending it won’t create a single new job. It’s too small a factor to count as more than decimal dust in anyone’s hiring decisions.

Here’s what suspending the payroll tax for biotech companies will do: reduce city revenue, almost certainly by enough to force more program cuts, and that means more job cuts for city workers. So you gain no private sector jobs — zero — and you lose public sector jobs. How, exactly, is that encouraging employment growth?

Quit complaining, Mr. Mayor — the last thing your proposals need is real public scrutiny.

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