taxes

Editor’s Notes

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Tredmond@sfbg.com

I just got back from a short trip to Canada, the land of government health care and tight bank regulations, where business is booming. From my hotel room in downtown Toronto, I could see construction cranes everywhere. The Globe and Mail had a fascinating report on a construction company manager in Winnipeg who was learning the language of the Cree tribe and creating a new apprenticeship program for First Nations people — in large part because he was facing a serious labor shortage.

Yeah, that’s right: in Canada, they can’t find enough construction workers to fill all the jobs. And there’s a good reason (which has nothing to do with zoning or taxes or fees on developers): The banks in our neighboring country to the north have always been more tightly regulated, so they didn’t have the same meltdown we saw here in the USA.

Then I came back and read that Meg Whitman, candidate for governor of California, wants to eliminate the capital gains tax in the state. I like the Huffington Post headline: "Meg Whitman tax plan: she stops paying hers."

There are two types of people in the world, the rich and the rest of us, and the rich quite often don’t work for a living. Whitman, for example, doesn’t have a day job. She pays the bills with the money she makes by investing the billion dollars or so that she racked up working at eBay.

Actually, she probably doesn’t invest much of it herself these days; she hires someone else to do that. Which means she doesn’t do anything at all to earn the money that comes in each week.

That income is called capital gains — and the HuffPo estimates that she’s bringing in enough that she’d probably owe the state about $4 million a year in taxes at current rates. If she gets elected, and manages to repeal the capital gain tax, she won’t pay any taxes on that money at all.

Which means the state will be even more broke — or that the rest of us suckers, who actually go to work every morning, will have to pay more to make up for it.

I suppose next she’ll want to deregulate the banks.

Small biz should support Chiu tax plan

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EDITORIAL It’s rare to see a fairly conservative city agency, created in part to make it harder for progressives to push measures that might affect business, come down in favor of a new business tax. But the San Francisco Office of Economic Analysis has concluded that the proposal by Board of Supervisors President David Chiu to change the local payroll tax and impose a new tax on commercial rents would actually help local businesses, particularly small businesses. The proposal presents a crucial opportunity for progressives to make the case that the Chamber of Commerce and big downtown corporations are not advancing the interests of small businesses — and local merchant groups need to pay attention.

Chiu has taken on a problem that has lingered in San Francisco for decades. The city’s business tax is terribly regressive: Only 10 percent of the companies in town even pay the payroll tax, in part because banks, insurance companies, and financial services firms are exempt under state law. That means the burden falls the heaviest on small and medium-sized companies — the ones that provide most of the net job growth in the city.

The new proposal would make the flat payroll tax more progressive and would exempt more small businesses. It would also raise $28 million more a year for the cash-strapped municipal coffers by taxing commercial rents of more than $60,000 a year.

The commercial rent levy would force the big outfits that now pay no city taxes whatsoever to take on at least some of the burden of financing San Francisco government. Smaller companies with modest leases, and small commercial landlords, wouldn’t pay the new tax at all.

Chiu originally had proposed an even broader tax, which would have raised more than $35 million. But after the Small Business Commission expressed concerns, he changed the measure, reducing the burden on small business even further. And at this point, Ted Egan, the city’s chief economist at the Office of Economic Analysis, reports that the tax would lead to greater job creation in the private sector (because of the reduction in the payroll tax) as well as greater job creation in the public sector (because of the additional revenue to the city).

It’s the kind of idea that ought to have broad-based support — progressives looking to fund crucial services see it as a way to bring in money, and small businesses ought to see it as a way to cut taxes and create jobs in the sector of the city that most needs economic stimulus.

Unfortunately, the response from small business leaders hasn’t been encouraging. The commission hasn’t taken a stand on the measure; on July 12th, the panel deadlocked 2-2, with one member absent and two slots still vacant (the mayor hasn’t filled them). That lets the big downtown players — the Chamber, the Building Owners and Managers Association, the Committee on JOBS, etc. — in a position to claim that the Chiu proposal is anti-business.

We’ve seen this pattern far to often. Small business groups allow big corporations, which have no interest in the real issues that impact local merchants, stick the little folks out front on political issues. We’ve seen it over the years with public power, commercial rent control, downtown development, and taxes — and it needs to stop.

The Small Business Commission, the Council of District Merchants, all the local community merchant groups, and anyone else who really cares about the interests of small business in San Francisco should support the Chiu measure. It’s a tax plan that’s good for small business. And if the advocates don’t realize that, they’re hurting themselves, the customers, and the city.

The tax poll is seriously messed up

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Chuck Nevius, who doesn’t seem to like any taxes, weighed in this morning on a poll paid for by the city’s Transportation Authority that, the way Nevius puts it, “[cast] doubt on whether it would be wise to put some tax issues on the ballot in November.” His analysis of the numbers:


[W]hen it comes to the hotel, parking, business and real estate transfer tax, the voters had four responses: no, no, no and hell no.


His ideological soulmate over at the Ex, Ken Garcia, had a similar report. “San Francisco,” he wrote, “is not in a tax-supporting mood.”


But that’s not how I read the poll at all.


You can see the actual document here. The first thing I’ll note is that 67 percent of the people who responded were over 40. That’s not a surprise; telephone polls skew older these days. (How many young people have land lines, which are the numbers primarily called by pollsters?) The second is that some of the questions are pretty close to incomprehensible. Imagine someone reading this to you over the phone and asking for a quick answer:


To provide loans to pay for seismic retrofits of certain multi-story wood structures at significant
risk of substantial damage and collapse during a major earthquake and funded by a qualified
governmental housing finance agency for permanent or long-term affordability, or single room
occupancy buildings owned by private parties, and pay related costs, shall the City and County
of San Francisco issue up to thirty nine million one hundred forty thousand dollars of general
obligation bonded indebtedness, subject to citizen oversight and regular audits?


But the most important thing is that the tax questions were more than misleading; they’re phrased in a way that almost begs for a No. Here’s the real-estate transfer tax question:


Shall the City and County of San Francisco increase the real property transfer tax on certain
properties by between $3.75 and $10.00 per $500.00 of value, depending on the overall
property value and exempting rent-restricted affordable housing units from the increased tax rate?


That sounds like the average person trying to buy or sell a house is going to get hit with more taxes. Actually, nobody’s proposing a tax on low-end sales. If you asked the real question — should people or businesses that sell property worth more than $5 million pay a slightly higher transfer tax — you’d get a very different answer.


Here’s another one:


Shall the City and County of San Francisco establish a progressive payroll expense tax rate
structure and impose a gross receipts tax on the rental of commercial real property?


My immediate response: What the hell does that mean? It sounds like higher taxes on payrolls and a new tax on rents. Sounds like it’s bad for small business. Actually, that’s an utterly inaccurate representation of the tax the Sup. David Chiu is proposing. How avbout an honest question: Should the city cut taxes on small businesses and make banks and insurance companies pay their fair share? I suspect that would poll a little higher.


You want a real snapshot of how a conservative, older groups of voters, the ones represented in this poll, feel about taxes? Check out question 13, which asks people if they agree or disagree with this statement:


It is crucial to have high quality streets, roads and public transit, even if it means raising taxes.


A full 71 percent said they agree.

I’m not arguing that it’s going to be easy to pass any tax proposals on the fall ballot. But if you put the question the right way, and explain that these revenue measures impact primarily the wealthier residents and businesses and that they money is needed for essential public services, I think most voters are going to say Yes.



Small biz should support Chiu tax plan

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A new proposal to make the flat payroll tax more progressive and exempt more small businesses

EDITORIAL It’s rare to see a fairly conservative city agency, created in part to make it harder for progressives to push measures that might affect business, come down in favor of a new business tax. But the San Francisco Office of Economic Analysis has concluded that the proposal by Board of Supervisors President David Chiu to change the local payroll tax and impose a new tax on commercial rents would actually help local businesses, particularly small businesses. The proposal presents a crucial opportunity for progressives to make the case that the Chamber of Commerce and big downtown corporations are not advancing the interests of small businesses — and local merchant groups need to pay attention.

Chiu has taken on a problem that has lingered in San Francisco for decades. The city’s business tax is terribly regressive: Only 10 percent of the companies in town even pay the payroll tax, in part because banks, insurance companies, and financial services firms are exempt under state law. That means the burden falls the heaviest on small and medium-sized companies — the ones that provide most of the net job growth in the city.

The new proposal would make the flat payroll tax more progressive and would exempt more small businesses. It would also raise $28 million more a year for the cash-strapped municipal coffers by taxing commercial rents of more than $60,000 a year.

The commercial rent levy would force the big outfits that now pay no city taxes whatsoever to take on at least some of the burden of financing San Francisco government. Smaller companies with modest leases, and small commercial landlords, wouldn’t pay the new tax at all.

Chiu originally had proposed an even broader tax, which would have raised more than $35 million. But after the Small Business Commission expressed concerns, he changed the measure, reducing the burden on small business even further. And at this point, Ted Egan, the city’s chief economist at the Office of Economic Analysis, reports that the tax would lead to greater job creation in the private sector (because of the reduction in the payroll tax) as well as greater job creation in the public sector (because of the additional revenue to the city).

It’s the kind of idea that ought to have broad-based support — progressives looking to fund crucial services see it as a way to bring in money, and small businesses ought to see it as a way to cut taxes and create jobs in the sector of the city that most needs economic stimulus.

Unfortunately, the response from small business leaders hasn’t been encouraging. The commission hasn’t taken a stand on the measure; on July 12th, the panel deadlocked 2-2, with one member absent and two slots still vacant (the mayor hasn’t filled them). That lets the big downtown players — the Chamber, the Building Owners and Managers Association, the Committee on JOBS, etc. — in a position to claim that the Chiu proposal is anti-business.

We’ve seen this pattern far too often. Small business groups allow big corporations, which have no interest in the real issues that impact local merchants, stick the little folks out front on political issues. We’ve seen it over the years with public power, commercial rent control, downtown development, and taxes — and it needs to stop.

The Small Business Commission, the Council of District Merchants, all the local community merchant groups, and anyone else who really cares about the interests of small business in San Francisco should support the Chiu measure. It’s a tax plan that’s good for small business. And if the advocates don’t realize that, they’re hurting themselves, the customers, and the city.

Meg wants to stop paying taxes

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The rich are not like you and I — a lot of the money they make comes from something other than working. I don’t begrudge Meg Whitman the billion bucks she made at EBay (well, I do, really, but never mind). But when you sit on a pile of money, hire someone to manage it for you, and reap major windfalls on the interest, well, you’re basically making money for doing nothing.


And you ought to at least pay taxes on it.


But Whitman thinks she and other rich people are so special that she wants to exempt them from taxes on capital gains. That means the rest of us — the poor fools who actually get up every monring and go to work — will have to pick up the slack.


Oh, but won’t this “create jobs?” Chris Kelly in Huff Po:


For example, if a billionaire didn’t have to pay taxes, he could hire you to express his dog’s anal glands. And you could pay taxes.


Pardon me for thinking this is about the dumbest tax idea I’ve heard since Ronald Reagan decided to tax the unemployed.


 


 

Newsom’s one bright spot (and even it’s a bit dingy)

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Covering Mayor Gavin Newsom’s devious exploits for this story last week, watching as the ever-ambitious Newsom sacrificed the city’s fiscal future on the altar of political expediency and his increasingly rigid anti-tax ideology, it seemed as if there was nothing remotely redeeming about this callow, self-serving man. But then he does this, appointing Cheryl Brinkman – a strong and respected advocate for promoting alternatives to the automobile – to the Municipal Transportation Agency Board of Directors.

I’m not saying this one act redeems Newsom, not even close. In fact, some have speculated that he’s trying to coopt a qualified progressive or burnish his green credentials, an echo of the responses to when he appointed San Francisco Bicycle Coalition director Leah Shahum to the MTA board a couple years ago, a tenure Newsom ended prematurely after they clashed over creating more car-free spaces. Or maybe he’s trying to head off support for a ballot measure being considered by the Board of Supervisors to split appointments to the MTA. Who knows with this guy?

Yet it’s also true that being open to democratizing the streets of San Francisco has been a bright spot in Newsom’s otherwise dismal record as mayor. And I think that’s because the cost of admission to this movement is so low. He’s embraced temporary car-free spaces, supported more bicycling, and moved forward other green initiatives – all of which have little to no cost involved and no real political downside. So it’s been easy for Newsom to strike green poses when he chooses, just as it was easy for him to make the supposedly “courageous” decision to legalize same-sex marriage, which involved no heavy lifting and greatly improved Newsom’s political prospects.

But we’re reaching a moment of truth for San Francisco, a point at which the easy answers are evaporating and the bill is coming due – just as Newsom prepares to leave San Francisco for Sacramento. After doubling Muni fares since he became mayor and reaching a level where they really can’t go up anymore without diminishing returns and serious political consequences, Newsom and his appointees have run out of easy options for maintaining Muni in an era of declining state and federal support.

Now, the choices aren’t as easy: charge motorists more for parking, permits, or driving in the most congested times or places; cut Muni service or raise rates more; find ever more ways to nickle-and-dime everyone with various fee increases; or find more general tax revenue, which Newsom has been steadfastly unwilling to do, even though the big banks and financial services companies that caused the Great Recession are exempt from city business taxes.

Brinkman, who tells us that the Mayor’s Office placed no conditions on the appointment, now has a tough job, as do all of this city’s elected and appointed officials. But this is the moment when they must have the courage to make the tough choices about what’s best for San Francisco, choices that Newsom has been unwilling to make.

Hotel Fairness Initiative qualifies for fall ballot

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By Brittany Baguio

The Department of Elections has announced that the Hotel Fairness Initiative was approved for the November ballot. Labor and community groups last week turned in 10,544 signatures, a little more than the required 7,168 signatures needed to put an initiative on the ballot. The Department of Elections did a sample of 500 signatures to check the validity and reported that 478 of the 500 signatures sampled were valid, resulting in a 95.6 percent accuracy rate.

The Hotel Fairness Initiative would increase revenue by imposing a 2 percent hotel tax on San Francisco hotel rooms temporarily for 4 years, with an average surcharge of $3 per hotel room per night, and close loopholes that let some visitors avoid paying the hotel tax. The hotel tax is currently 14 percent. According to the Controller’s Office, if the Hotel Fairness Initiative passes, it is expected to raise $25 million a year in revenue.

The hotel tax is one of five measures proposed to help close the budget deficit, which we discuss in more detail in this week’s paper. Mayor Gavin Newsom has also placed a measure of the ballot to also close the loopholes that lets airline employees and those who book hotels online avoid paying hotel taxes, as the Hotel Fairness Initiative would also do, but it includes a provision that would invalidate the hotel tax if his measure gets more votes.

Supporters of the Hotel Fairness Initiative claim that online booking companies and airline companies have been using corporate loopholes that have cost the city about $6 million per year. In total, online booking companies have escaped paying $70 million in hotel taxes through its loophole of taking the hotel tax out of a portion of the money the hotel receives, rather than the total amount the customer pays.

For example, Internet booking companies would charge customers $200 for a room and then pay the hotel $170. Internet booking companies argue that the hotel tax comes from a portion of $170, instead of $200. Similarly, airlines have avoided paying hotel taxes by renting blocks of rooms for its flight crews and claiming that airline companies are protected by the Permanent Resident Exclusion law. This law was originally intended to help the homeless and states that individuals who occupy a room for at least 30 days are tax exempted. However, airlines have been taking advantage of this law by moving different flight crews in and out of their hotel rooms rather than an individual person occupying the room for 30 consecutive days that is implied by the law.

Opponents of the Hotel Fairness Initiative, such as the San Francisco Chamber of Commerce and the Hotel Council, contend that the hotel tax would hurt tourism to San Francisco as well as cause job cuts. In a press release, Steve Falk, President & CEO of the San Francisco Chamber of Commerce said, “This misguided effort will discourage travel to San Francisco, hurt our city’s largest industry, and eliminate many of the union jobs the Labor Council seeks to protect. Raising city revenue at the expense of hotels and hospitality workers is not the answer to the city’s fiscal problems.”

A Hotel Council press release states that “the Hotel Fairness Initiative will lead to 7.3 jobs lost for every million dollars in revenue gained.” If this is true, about 182 jobs could be lost as a result of this initiative, offset by the city being able to save many public sector jobs and services with the revenue. The hotel industry already fluctuates in the number of positions available as a result of the market. According to California Labor Market Info’s latest data, the average amount of hotel jobs lost per month in 2009 was 143 jobs.

Although the Hotel Council and the Chamber of Commerce claim that the initiative would eliminate jobs, one of the biggest supporters of the hotel tax is UNITE HERE LOCAL 2, a union of hotel workers. UNITE HERE representative Ian Lewis emphasized that opponents of the issue are conveniently ignoring the lack of fairness in current hotel booking practices. “Hotel workers live in San Francisco,” Lewis told the Guardian, “We’re taxpayers like everyone else. We are in a severe budget crisis and everyone needs to carry their fair share.”

Community groups, retirees, and hospital workers all volunteered their time to collect signatures supporting the Hotel Fairness Initiative. Community groups such as UNITE HERE collected 1700 signatures, Keep the Arboretum Free collected 1000, and a collection of nonprofit groups collected more than 4000. With the efforts of these community groups, the coalition was able to collect an estimated 15,000 signatures.

Family health advocate for the Tenderloin Housing Clinic, Bobbi Lopez, said she found that those who signed the petition saw the hotel tax as a necessary step in closing the budget deficit, “They understood that the necessity of fighting the cuts, particularly the cuts to MUNI, to parks, and to hospitals,” Lopez told us, “I think that they were getting the idea that in desperate budget times, we need a temporary solution and long term solution and that’s exactly what the Hotel Fairness Initiative is.”

Community groups remain optimistic that this grass roots effort will pass. Brenda Barrows, a health care provider at San Francisco General Hospital, told the Guardian, “My hope is that in November it passes and the city’s financial situation gets better so that people who live in the city don’t have to suffer and also people who work for the city don’t have to suffer.”

Lopez told us she thinks that the initiative will pass if there is an ongoing effort on the issue. “We want to remind folks that this is just the beginning and now we have to embark on a long term campaign,” Lopez told us, “so it’s really about sustaining the energy that we had on June 1 when we kicked off and reminding folks that its going to necessitate all the same volunteers to work together and make it reality.”

 

Board accepts EIR, but vows to amend Candlestick-Shipyard plan

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Text by Sarah Phelan, images by Luke Thomas


At the end of a ten-hour hearing to appeal the final environmental impact report  for the city and Lennar’s massive Candlestick-Shipyard redevelopment project, the Board voted 8-3 to accept the FEIR, with only Sups. John Avalos, Chris Daly and Eric Mar voting to reverse certification of what they said was a flawed document.


But the vote does not mean the Board has voted to accept the city and the developer’s final redevelopment plan. That plan will come before the Board on July 27, and the supervisors are expected to introduce a slew of amendments, in addition to  five amendments that Board President David Chiu introduced earlier this week.


These amendments are intended to address longstanding concerns about toxins at the shipyard, limited liability on the part of the developer, the questionable need for a bridge over Yosemite Slough, the reality that Bayview residents may be cut out of any upcoming jobs, and the desire to nail down efforts to use public power at the site


“We can’t do the amendments here, we are frozen out, all we can do is an up and down vote on the EIR for now,” Sup. Ross Mirkarimi told the Guardian last night. 
Mirkarimi anticipates that the Board will seek additional mitigations, such as requiring liquidated damages to shore up a community benefits agreement that Labor entered into with Lennar in May 2008.


Mirkarimi said the Board would also seek to increase workforce development benefits.
“Thirty percent of the target workforce population are ex-offenders, so while they might get training, currently they won’t get jobs other than construction,” Mirkarimi observed.


Mirkarimi was proud of the Public Power amendment that Chiu has already lintroduced, pointing to an ordinance that he and then Sup. Gerardo Sandoval introduced and Mayor Gavin Newsom signed into law, in March 2006. This public power ordinance established that “where feasible, the City shall be the electricity provider for new City developments, including military bases and development projects.”


“PG& E was ripped when we pushed that through,” Mirkarimi said.


During yesterday’s marathon hearing, the supervisors grilled city staff on issues that have proved to be key sticking points, as the city seeks to win final project approvals, even though they cannot address these issues with amendments until the July 27 meeting.


The Board questioned the wisdom of moving forward with development on the Shipyard, as the Navy continues to clean up radiological contamination and other toxins at the site, including Parcel E-2, which contains some of the nastiest pollution at the yard.


“Why not just wait until the CERCLA process is completed?” Sup. Campos asked, referring to the fact that the Navy is responsible for shipyard clean up, under CERCLA, which is also known as the Superfund Act.


Campos question came after acclaimed environmental scientist Wilma Subra and national environmental human rights lawyer Monique Harden, challenged the sanity of having the Navy digging out toxins while a developer simultaneously installs infrastructure at the same site.


Subra, who works in Superfund sites throughout the U.S, warned the Board that it’s very common to find contamination at these sites after they have been declared clean.


“So, the number of samples isn’t the magic answer,” Subra said, referring to the city’s constant refrain that the Navy has taken thousands of samples at the site. Subra also warned that it is not uncommon for a contractor to dig into an area that has been capped, thereby potentially exposing workers and the community to contamination and resulting in legal stand-offs, as various parties argue as to who has responsibility to fix the resulting mess.


Harden, who is based in New Orleans but also has an office in D.C., expressed concern over the plan to begin construction on some shipyard parcels, even as the Navy continues to remove radiologically contaminated sewers and other deep infrastructure at the site.
“That’s like a person jumping up and down on a bed that another person is trying to make up,” Harden said


But Michael Cohen, Mayor Gavin Newsom’s chief economic advisor countered that there was no scientific evidence to support Subra or Harden’s concerns.


“It’s a very common situation, especially on brownfields,” Cohen said, (though the Shipyard is a Superfund site that’s been contaminated with radiological waste that was sandblasted off ships returning from a Bikini Atoll atomic testing experiment gone awry.)


“It’s the basis for shipyard artists and the police being on the site for many years,” Cohen continued. “It’s safe based on an extraordinary amount of data.”


But Cohen did agree that language in Chiu’s Parcel E-2 amendment should be changed from “should” to “shall” to indicate that city oversight is a requirement, not a request, when it comes to final decisions over the transfer of this particular parcel.


Mark Ripperda of U.S. EPA assured the Board that his agency is not going to permit transfer of parcels for development until cleanup is completed.
“We are not going to allow any transfer until we are convinced it’s safe,” Ripperda said.


Sup. Eric Mar chastised the EIR for its apparent failure to adequately discuss the impacts of the proposed development on schools in the surrounding area.


“There is less discussion of the impacts on schools than there is of the A-Bomb, which was held at the Shipyard for 1 to 2 days,” Mar said. “The analysis seems very weak.”


And Daly expressed frustration that the Board was being asked to take a decision when it lacked sufficient information about and understanding of the project.


“How do we know it’s safe? ” Daly asked, noting that, “Money talks, bullshit walks.”
(His point resonated as City staff scrambled to find key information within the 7,000 pages of comments and responses in the massive FEIR documents, and Amy Brownell of the city’s Public Health Department rattled off a series of measurements and schedules that few on the Board seemed to understand.)


“The risks are acceptable,” Brownell said. “And the only people allowed on the property [during the development] will be the ones doing the work.”


The Board also challenged the need for a bridge over the environmentally sensitive Yosemite Slough, especially in the wake of the June 2010 election in which Santa Clara voters approved building a new stadium for the 49ers near Great America.


“One reason I’ve been given for [the need for the bridge] is the financial viability of this project,” Campos said.


Cohen replied that if the city does not to build the bridge, “it elevates the financial risk.”


“Parcel C [on the shipyard] has been zoned for green tech, and for major employers, having that direct connectedness to BART and the T-Third is very important.”


Cohen also indicated that, thanks to the project’s huge reliance on tax increment financing, the loss of the bridge would translate into lost property tax revenues.


“Some of the repayment comes from generation of tax increment financing, so the failure to have a bridge here, degrades the potential of property tax revenues, and so you get much less tax increment,” Cohen stated.


The Board also expressed concerned that under the current terms of the deal they are now set to consider July 27, the developer has limited liability—an arrangement that has got supervisors worried that the city, and Bayview residents whose increased property taxes will help pay for the development, could end up on the wrong end of the financial hook.


Campos pointed to the disposition and development agreement (DDA) that the city drew up with Lennar.
“I’m specifically worried about a provision that on the face of it limits the developer’s liability,” Campos said, pointing to language that seems to say that “monetary damages are inappropriate”—conditions that Campos deemed, “Very unusual.


Cohen responded that the deal reflects the reality that, “the Navy, not Lennar is responsible for the cleanup.”
He added that the city retains the legal ability to sue, various remedies and, ultimately, “the right of reverter” (which folks call the “nuclear option” since it involves kicking out the developer, but losing everything in the process.)


“This is an incredibly frontloaded project,  in which we have the ability to terminate the developer at the cost of millions of dollars,” Cohen said.


But while the city and the developer ultimately affirm EIR certification, the decision left the Bayview community deeply divided, with many concerned that the FEIR failed to address their concerns, while others rejoiced, believing that they will benefit from jobs that will be created during the development’s 10-15 year build out and beyond. Only time will tell how it all plays out, but stay tuned as the Board prepares to try and make the plan the best it can in face of all these competing concerns.


 

Bad faith

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steve@sfbg.com

Mayor Gavin Newsom and his business allies are actively trying to sabotage the various revenue measures that have been put forth by the labor movement and progressive members of the Board of Supervisors, employing deceptive rhetoric, sneaky tactics, and a refusal to bargain in good faith.

In fact, Newsom — the Democratic nominee for lieutenant governor — is so averse to supporting anything that could be called a “tax” that he rejected a hard-won compromise measure created by powerful developers, affordable housing advocates, a pro-business think tank, the building trades, and his own directors of housing and economic development.

Just as that story was breaking in the New York Times (produced by Bay Citizen) on July 9, members of the Board of Supervisors Budget and Finance Committee discovered that Newsom’s proposed ballot measure to close loopholes in the city’s hotel tax that favored airline employees and online travel companies — a widely supported change, but one worth just $6 million per year — contains language that would nullify any increases in the hotel tax. Earlier in the week, labor unions turned in signatures on an initiative to increase the hotel tax by 2 percent, which would bring in more than $30 million per year.

“This poison pill is an intentionally deceptive, underhanded move,” Gabriel Haaland, an organizer with Service Employees International Union Local 1021, which sponsored the hotel tax, told us. “It’s so frustrating. It’s not even a good faith fight. He’s trying to create confusion and fool the voters. If our measure passes fair and square, it should be implemented.”

Meanwhile, Newsom and business groups have been attacking a reform measure by Board President David Chiu that would make the currently flat payroll tax more progressive, exempt more small businesses from paying it, and create a commercial rent tax to spread the tax burden more widely than the 10 percent of businesses who now pay tax to the city.

Critics complained that the measure would hurt local businesses — but that’s just not true. The city’s Office of Economic Analysis concluded that Chiu’s original proposal would have no effect on private sector jobs and would generate $34 million annually for the city, preserving some government jobs and spending.

Then Chiu amended the measure to spare even more small businesses. Now the OEA says that the measure would actually create private sector jobs — and still bring $28 million in to the city. Yet Newsom and the business community are still withholding their support.

This trio of Machiavellian moves comes just a week after Newsom pulled out of budget negotiations with board progressives concerning about $40 million in board add-backs to programs that Newsom proposed to cut after they wouldn’t agree to his precondition that they withdraw unrelated measures proposed for the November ballot, such as splitting appointments to the Rent, Recreation and Park, and Municipal Transportation Agency boards and requiring police officers to do foot patrols.

The series of events has led many progressives to say that conservative ideological blinders — a knee-jerk opposition to anything that saves government jobs and services or that Republicans might criticize — is the only logical explanation for the intransigent stance adopted downtown and by Newsom.

“It’s ideological. It’s not economic, and it’s not even political,” said Calvin Welch, the affordable housing activist who helped negotiate the transfer tax compromise with developer Oz Erickson, San Francisco Planning Urban Research Association director Gabriel Metcalf, Mayor’s Office of Housing Director Doug Shoemaker, and others.

That measure would have created a transfer tax on sales of properties over $875,000 and generated approximately $50 million annually for affordable housing (funds that were drastically reduced in Newsom’s proposed 2010-11 budget) while cutting in half the current requirements and fees on market-rate developers to create below-market-rate units. The plan would have stimulated both types of housing and created desperately needed construction work — an approach those involved called an elegant solution to several problems.

“To me, this was a win-win, solving two problems that are each a big deal,” Metcalf told us. “I don’t know what his reasons were for not supporting it. I was surprised.”

But Welch said, “It collapsed straight up because the mayor didn’t want to support a tax.” Although Newsom told the Times it was because there wasn’t broad enough consensus yet, “the mayor’s reason is whole-cloth bullshit,” Welch said, noting the role of the Mayor’s Office in brokering the deal. “The mayor walks away from it because everyone wasn’t in the room? Well, it’s your room, motherfucker. Show some leadership.”

Newsom Press Secretary Tony Winnicker refused to discuss these issues by phone, responding to our written inquires by noting that Newsom opposes taxes and thinks the best way to address budget deficits are privatizing city services and pension reform (although he opposes Public Defender Jeff Adachi’s initiative, the only pension reform measure on the fall ballot).

“The mayor is opposed to the Board of Supervisors’ proposals to increase taxes because they’re not needed to balance the budget and they will strangle our still young economic recovery,” Winnicker wrote, refusing to answer follow-up questions or support a statement about Chiu’s measure that the OEA concludes is not accurate.

Like many political observers of all stripes, those from downtown and progressive circles, Welch criticized Newsom for his lack of engagement with city business and its long-term fiscal outlook, contrasting him with former Mayor Willie Brown, who met regularly with former Board of Supervisors President Tom Ammiano even as the two ran a bitter campaign for mayor against one another in 1999. “They dealt with the city’s business like two adults who cared about the city,” he said.

Welch acknowledged that there was still work to be done building political support for the transfer tax measure. He and other progressives would have had to win over city employee unions who wouldn’t like the budget set-aside aspect, and Erickson and Metcalf would need to placate some of their downtown allies who oppose taxes on ideological grounds. But given how downtown groups are behaving right now, that might not have been an easy sell.

“There are members of the small business community that are averse to any taxes,” said Regina Dick-Endrizzi, director of the city’s Office of Small Business and staffer to the Small Business Commission, which was withholding a recommendation on the Chiu measure but planned to meet again to consider it July 12 (look for an update on the sfbg.com Politics blog). She said the small business community is having tough times and “they are just not sensitive to keeping city workers employed.”

Larger commercial interests are being even more forceful in opposing the revenue measures. While a parade of workers, social service providers, and progressive activists testifying at the July 9 Budget Committee hearing implored supervisors to place all the proposed revenue measures on the ballot, representatives from the Building Owners and Managers Association (BOMA) and San Francisco Chamber of Commerce were the only two speakers urging supervisors to drop the measures and focus instead on creating private sector jobs.

“You’re trying to create a little revenue here and it’s not going to work,” said Ken Cleaveland, director of BOMA SF, arguing that big banks and financial services companies — entities exempt from the payroll tax that Chiu is hoping to target with the commercial rent tax — will buy their buildings to avoid paying the tax. “They aren’t going to create more jobs and they really aren’t going to create more revenue.”

Yet Chiu noted that it was the business community and fiscal conservatives who pushed to create the Office of Economic Analysis, whose work they have regularly used to attack progressive legislation. Now that the office has concluded that a piece of progressive legislation is good for the local economy, Chiu told Cleaveland and the Chamber spokesperson Rob Black at the hearing, “I ask you to respect the work this office has done.”

Black said the Chamber board will consider Chiu’s amended legislation, but said businesses are in no mood to help the city. “How many times have you gone to your neighborhood merchant and had them say, ‘Gee, my rent’s too cheap’?<0x2009>” he said during his testimony.

Yet Chiu said landlords of small tenants (those paying less than $65,000 in rent per year) are exempt from the rent tax and only 26 percent of SF businesses would pay any city business tax under his plan. “I hope the mayor will support this proposal and the business community will give it a good look,” Chiu said as the hearing ended.

At the beginning of the hearing, Chiu framed the dire situation facing San Francisco, citing Controller’s Office figures showing this year’s $500 million budget deficit (out of a $6 billion total budget) will be followed by a $700 million deficit next year and a $800 million gap the following budget cycle as a result of a deep structural budget imbalance.

“We have budget deficits as far as the eye can see,” Chiu said at the hearing. “We have to consider measures that will provide more stable sources of revenue.”

He also noted that city employee unions have agreed to give back about $250 million in salary and had their ranks reduced by about 2,000 workers in the last two years. So he and the other progressive supervisors say it’s time for the rest of San Francisco to help address the problem.

“We, as a city, should not be trying to balance this budget simply through cutting,” Sup. David Campos said.

Sup. John Avalos, the committee chair, amended his transfer tax measure in the wake of Newsom’s rejection of the deal by making it a simple 2 percent tax on properties that sell for more than $5 million, and 2.5 percent tax on properties over $10 million. He estimates it will bring in about $25 million per year from the city’s wealthiest corporations and landlords.

“That’s who we’re socking it to,” Avalos told us, saying he was disappointed the compromise fell through. “The amendment is going to be more progressive than what was originally planned.”

Even Sup. Sean Elsbernd, a strong fiscal conservative who announced early in the hearing, “You want to do that [balance future budgets] by adding taxes, but I want to do it through ongoing service cuts,” later told the Guardian that he was intrigued by the amendments Avalos and Chiu made to their measures and has not yet taken a position on them.

Sup. Ross Mirkarimi is also sponsoring a measure to increase the city’s tax on parking lot operators from 25 percent to 35 percent, the first change to that tax in 30 years, and will include valet parking for the first time. The measure would bring in up to $24 million per year, and OEA analysis shows it would decrease the number of cars trips by 1.3 percent, another benefit.

SFMTA supports the measure, with board member Cameron Beach testifying that the money will be used to subsidize Muni and “it links the use of private automobiles and is consistent with the city’s transit-first policy.” Mirkarimi, who chairs the Transportation Authority, also has proposed a $10 local vehicle license fee surcharge that would bring in another $5 million per year for Muni.

All the revenue measures require six votes by the full Board of Supervisors, which is scheduled to consider them July 20, after which they would need a simple majority approval by voters in November to take effect.

The mayor has the authority to directly place measures on the ballot, so the committee hearing on his hotel tax loophole measure and a $39 million general obligation bond that he’s proposing to create a revolving loan fund for private sector seismic improvements were mere formalities, so supervisors criticized aspects of each but were unable to make changes.

Avalos even grudgingly acknowledged the hotel tax poison pill was an effective way to kill that revenue source, saying at the hearing, “This is very smart. I don’t agree with it, but it’s very smart.”

Haaland was less charitable, criticizing a provision designed to confuse voters. “This kind of move means both measures won’t pass because now we have to oppose [Newsom’s measure],” he said, criticizing the mayor for running away from the hard decisions facing the city. “He won’t be around next year, when we have an even bigger structural budget deficit, to clean up this mess. Absent new revenue sources, this city starts to fall apart.”

Newsom’s ambitions trump local needs

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I guess that’s nothing new, and I could have written the same headline dozens of times over the past couple of years. But in this case, the Bay Citizen has a nice scoop — Newsom personally scuttled a deal that would have created a $50 million annual stream of affordable housing money because he didn’t want to be on record supporting any new taxes.


The Bay Citizen story, which also ran in the New YorkTimes, doesn’t go quite as far as to say that the tax issue scuttle the whole thing, but I think it’s pretty clear that’s what happened. The deal — a highly unusual agreement between warring parties — involved an increase in the real-estate transfer tax on high-end buildings. The private developers agreed to support it — if the housing advocates would allow some of the money to be used to subsidize the requirement that developers build affordable housing along with market-rate units.


I’m no so into subsidizing private housing developers, but the money would be coming from people who sell high-end properties. At any rate, whether it was a good deal in the end or not, Newsom’s own staff was involved in making it happen — and the mayor only killed it for one reason.


He doesn’t want his Republican opponent this fall to accuse him of raising taxes.


That’s a hell of a way to run a city. 

Taming finance in an age of austerity

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By Joseph E. Stiglitz

NEW YORK – It was not long ago that we could say, “We are all Keynesians now.” The financial sector and its free-market ideology had brought the world to the brink of ruin. Markets clearly were not self-correcting. Deregulation had proven to be a dismal failure.

The “innovations” unleashed by modern finance did not lead to higher long-term efficiency, faster growth, or more prosperity for all. Instead, they were designed to circumvent accounting standards and to evade and avoid taxes that are required to finance the public investments in infrastructure and technology – like the Internet – that underlie real growth, not the phantom growth promoted by the financial sector.

The financial sector pontificated not only about how to create a dynamic economy, but also about what to do in the event of a recession (which, according to their ideology, could be caused only by a failure of government, not of markets). Whenever an economy enters recession, revenues fall, and expenditures – say, for unemployment benefits – increase. So deficits grow.

Financial-sector deficit hawks said that governments should focus on eliminating deficits, preferably by cutting back on expenditures. The reduced deficits would restore confidence, which would restore investment – and thus growth. But, as plausible as this line of reasoning may sound, the historical evidence repeatedly refutes it.

When US President Herbert Hoover tried that recipe, it helped transform the 1929 stock-market crash into the Great Depression. When the International Monetary Fund tried the same formula in East Asia in 1997, downturns became recessions, and recessions became depressions.

The reasoning behind such episodes is based on a flawed analogy. A household that owes more money than it can easily repay needs to cut back on spending. But when a government does that, output and incomes decline, unemployment increases, and the ability to repay may actually decrease. What is true for a family is not true for a country.

More sophisticated advocates warn that government spending will drive up interest rates, thus “crowding out” private investment. When the economy is at full employment, this is a legitimate concern. But not now: given extraordinarily low long-term interest rates, no serious economist raises the “crowding out” issue nowadays.

In Europe, especially Germany, and in some quarters in the US, as government deficits and debt grow, so, too, do calls for increased austerity. If heeded, as appears to be the case in many countries, the results will be disastrous, especially given the fragility of the recovery. Growth will slow, with Europe and/or America possibly even slipping back into recession.

Stimulus spending, the deficit hawks’ favorite bogeyman, did not cause most of the increased deficits and debt, which are the result of “automatic stabilizers” – the tax cuts and spending increases that automatically accompany economic fluctuations. So, as austerity undermines growth, debt reduction will be marginal at best.

Keynesian economics worked: if not for stimulus measures and automatic stabilizers, the recession would have been far deeper and longer, and unemployment much higher. This does not mean that we should ignore the level of debt. But what matters is long-term debt.

There is a simple Keynesian recipe: First, shift spending away from unproductive uses – such as wars in Afghanistan and Iraq, or unconditional bank bailouts that do not revive lending – toward high-return investments. Second, encourage spending and promote equity and efficiency by raising taxes on corporations that don’t reinvest, for example, and lowering them on those that do, or by raising taxes on speculative capital gains (say, in real estate) and on carbon- and pollution-intensive energy, while cutting taxes for lower-income payers.

There are other measures that might help. For example, governments should help banks that lend to small- and medium-size enterprises, which are the main source of job creation – or establish new financial institutions that would do so – rather than supporting big banks that make their money from derivatives and abusive credit card practices.

Financial markets have worked hard to create a system that enforces their views: with free and open capital markets, a small country can be flooded with funds one moment, only to be charged high interest rates – or cut off completely – soon thereafter. In such circumstances, small countries seemingly have no choice: financial markets’ diktat on austerity, lest they be punished by withdrawal of financing.

But financial markets are a harsh and fickle taskmaster. The day after Spain announced its austerity package, its bonds were downgraded. The problem was not a lack of confidence that the Spanish government would fulfill its promises, but too much confidence that it would, and that this would reduce growth and increase unemployment from its already intolerable level of 20%. In short, having gotten the world into its current economic mess, financial markets are now saying to countries like Greece and Spain: damned if you don’t cut back on spending, but damned if you do as well.

Finance is a means to an end, not an end in itself. It is supposed to serve the interests of the rest of society, not the other way around. Taming financial markets will not be easy, but it can and must be done, through a combination of taxation and regulation – and, if necessary, government stepping in to fill some of the breaches (as it already does in the case of lending to small- and medium-size enterprises.)

Unsurprisingly, financial markets do not want to be tamed. They like the way things have been working, and why shouldn’t they? In countries with corrupt and imperfect democracies, they have the wherewithal to resist change. Fortunately, citizens in Europe and America have lost patience. The process of tempering and taming has begun. But there is far more yet to do.

Joseph E. Stiglitz is University Professor at Columbia University and a Nobel laureate in Economics. His latest book, Freefall: Free Markets and the Sinking of the Global Economy, is now available in French, German, Japanese, and Spanish.

Copyright: Project Syndicate, 2010.
www.project-syndicate.org
For a podcast of this commentary in English, please use this link:
http://media.blubrry.com/ps/media.libsyn.com/media/ps/stiglitz127.mp3

SF business community just opposes government

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Mayor Gavin Newsom and his business community allies often accuse progressive members of the Board of Supervisors of being too “ideological” in their proposals, particularly when they involve revenue or regulations. But a looming battle over reforming the city’s business tax – one of three new revenues set for a special Budget & Finance Committee meeting tomorrow (7/9) at 11:30 am – shows that an ideological aversion to taxes of any kind drive Newsom and the business community more than their stated concern for “jobs” and the “economy.”

Board of Supervisors President David Chiu crafted his measure – which creates a progressive structure for the currently flat payroll taxes and uses small commercial rent tax to spread the tax burden among more businesses (only 10 percent of which now pay the payroll tax) — specifically to decrease the business tax burden on small businesses and protect private sector jobs while also bringing in about $35 million more into the city, which will save some city jobs and thus help the local economy.

City Economist Ted Egan and the Office of Economic Analysis confirmed that Chiu’s carefully crafted measure does just that, noting that it was based on recommendations made last month in a report by his office and two private accounting firms that was jointly commissioned by both Chiu and Newsom.

“The proposed legislation modifies the Progressive Payroll option in the Controller’s report, to achieve greater revenue growth while minimizing private sector job growth,” concludes Egan’s analysis. And that’s the idea of this legislation, to save some city jobs and services without hurting the private sector. Egan found this tax reform would on balance have no impact on private sector jobs.

But the Small Business Commission, driven by anti-government zealots in their community, wants even greater concessions and to minimize government revenues, demands that Chiu is now considering giving in to, with sources close to the negotiations saying they will amend the plan to exempt more small businesses and lower the revenue projection to more like $28 million.

“There are members of the small business community that are averse to any taxes,” Regina Dick-Endrizzi, director of the city’s Office of Small Business (which staffs the commission), told us.

She said the commission isn’t opposing or supporting the measure, and while she said the business community isn’t ideologically opposed to government, she did admit that “they are just not sensitive to keeping city workers employed.”

And that’s a terribly selfish and self-defeating attitude that hurts the local economy and the services we all depend on. The problem is the small business community — which is supported by the Bay Guardian and beloved by all as a key job creator — is being used by conservative ideologues and large corporations and lured into joining their anti-government crusade. This has to change, and this legislation is a good opportunity to talk about the real ideological barriers that are hindering common sense solutions to this city’s problems.

Ungodly deeds

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news@sfbg.com

The Catholic Church claims to value charity and justice, but recent local conflicts over cutting off child care for low-income families and refusing to pay millions of dollars in taxes to cash-strapped San Francisco city government — as well as the ongoing priest pedophilia cover-up cases — cast doubt over the church’s commitment to those in need.

The San Francisco Catholic Archdiocese has said it will close the Children’s Village Development Center in August, displacing 110 children enrolled in the program and leaving 100 families — a third of them low-income — scrambling for hard-to-find childcare providers.

The Archdiocese also sold other surrounding properties because it could not afford to retrofit its buildings for earthquakes, selling them to developers Chris Harney and Tom Murphy. Both the church and the developers rejected efforts by Children’s Village parents, who formed the nonprofit Supporting Early Experience and Development (SEED), to temporarily lease the building.

Dan Dillon, a representative for Harney and Murphy, told the Guardian that they decided to reject SEED’s leasing offer because they had already made a deal with a tenant who was willing to offer more money. Dillon wouldn’t identify the tenant, but he said the new tenant would use the building without major modifications, which might have triggered a need for city permits and a public hearing.

Catholic Charities CYO, an agency of the Archdiocese that oversees programs such as the Children’s Village program, closed the center because it wasn’t making money. The city gave about $1.5 million in grants and loans to support childcare for poor families at Children’s Village, with most of the money coming from the Low Income Investment Fund.

According to Catholic Charities’ official statement on the dispute, it tried to maintain the program by cutting slots for low income families in an effort to subsidize the program. There was still not enough money to fund the program. Catholic Charities representative Gabrielle Slanina told us that the tough economy and internal budget cuts hurt their ability to continue providing childcare at the site.

“The program hasn’t been financially sustainable over the years,” Slanina told us. “Sustainability just wasn’t turning around. But we tried to keep it going for as long as we could.”

Catholic Charities still plans to later build a new $1 million children development center three blocks away on the corner of 10th and Mission streets. But SEED members are left in the lurch for now, causing them to question the validity of Catholic Charities’ mission to “support, stabilize, and strengthen families.”

Dee Dee Workman, a consultant helping SEED, was disappointed with the Archdiocese’s bottom-line approach to helping local families. “They have not attempted to secure slots with these families,” Workman told us. “They don’t care about these kids. It’s just about the money, and it’s immoral.”

SEED member Sabrina Qutb, who has a three-year-old son enrolled in Children’s Village, said she sees the new center as a waste of money. “I do not believe the city should continue to fund Catholic Charities child care programs,” Qutb told us. “Who’s to say they won’t drop 10th and Mission in a few years and waste even more of the city’s money?”

Many child care programs have waiting lists up to two years in a city where there are more than twice as many children under 13 with working parents as there are licensed child care slots, according to a study prepared for the city by the California Child Care Resources and Referral Network. Child care slots for infants are among the fewest, making up only 6 percent of the 17,894 child care center slots in the city. Preschool children ages two to five years old occupy 63 percent of the child care slots.

SEED member Kathryn Shantz put her two-year-old daughter on a waiting list for another child care facility immediately after the announcement of Children’s Village closure. “I’m 104 on the waiting list for the Yerba Buena Child Development Center,” Shantz said. “I’ve been on the wait-list for a year, and they basically told me that there’s no way I’m getting in.”

Meanwhile, while the city supported the church’s child care program, the church is still stiffing the city on its tax bill. On April 16, the Archdiocese filed a suit in the San Francisco Superior Court against Assessor-Recorder Phil Ting. The suit challenges a Transfer Tax Review Board ruling last November which held that the Archdiocese owed the city $14.4 million after transferring 232 parcels of property among three Archdiocese corporations in 2008 without paying the required transfer taxes attached to those vacant lots, parking lots, apartments, commercial buildings, parishes, and schools. This is the second-largest transfer tax bill in San Francisco history.

Repeated calls to the Archdiocese of San Francisco were not returned. In a press release, the Archdiocese said that it “maintains that to impose transfer taxes, penalties, and interest on a religious organization in connection with an internal restructuring involving no exchange or receipt of money from which to pay any tax is inequitable and threatens to confiscate substantial church assets that are devoted to religious purposes.”

The next court date for this case is scheduled for Sept. 17. This recent lawsuit and the sale of Archdiocese properties come at a time when the church is facing the possibility of paying out big settlements in cases involving sexual abuse by priests.

Survivor Network of Those Abused by Priests (SNAP) Northern California Regional Office representative Joey Piscitelli said that if victims weren’t so afraid to report their abuse, the Archdiocese would owe its victims even more money. “Ninety-eight percent of victims never report the abuse, and the average person reports the abuse 25 years after the incident,” Piscitelli said. “The church brags that the clergy didn’t do it because they were never convicted, yet they’re paying billions of dollars in lawsuits.”

With the Catholic Church now facing scrutiny on so many fronts, it seems that a day of reckoning could be in its future. On June 29, the Supreme Court decided not to hear an appeal by the Vatican for immunity in a highly publicized pedophilia suit, clearing the way for the 2002 lawsuit to advance.

The plaintiff, under the name of John V. Doe, alleged that he was abused in 1965 by Father Andrew Ronan in Portland, Ore. Ronan died in 1992. The Vatican tried to kill the lawsuit by stating that it was protected under the Foreign Sovereign Immunities Act of 1976, a federal law that prevents foreign states from lawsuits.

The appeals court determined that there was an exception to the law, stating that Ronan was an employee of the Vatican and he was working under Oregon law. No one has ever won a lawsuit against the Vatican for sexual abuse allegations made by the clergy. This Supreme Court decision opens the door for future lawsuits against the Holy See.

Newsom and the board’s challenge

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Newsom needs to decide whether he’s serious when he says he wants to work with the supervisors on a budget

EDITORIAL The San Francisco supervisors took a huge step with the city budget this year: they essentially told the mayor that his approach was unacceptable, and that they were going to do it themselves.

The result — the document that the board’s Budget Committee approved and sent back to Mayor Gavin Newsom — isn’t perfect. But the members of that panel saved $40 million worth of programs from the mayor’s budget ax and got rid of two particularly bad plans: privatizing health care at the county jails and allowing more condominium conversions.

The board members are also looking seriously at putting as much as $100 million in new taxes — progressive taxes — on the November ballot. Current plans include a modest increase in the hotel tax, an increase in the real-estate transfer tax on high-end properties, and a tax on commercial rents of more than $200,000 a year, which would be paired with a reduction in the payroll tax for small businesses.

Now Newsom, who is busy running for lieutenant governor, needs to decide whether he’s serious when he says he wants to work with the supervisors on a budget everyone can accept.

On one level, the mayor doesn’t have a lot of choice — if he vetoes the proposal the board sent him, there’s a good chance the supervisors will override the veto. What he’s more likely to do is simply refuse to spend the additional money the board wants to allocate — allowing his cuts to take effect, allowing critical services to die and community-based nonprofits to close, while that money just sits in a reserve fund (or gets allocated to the mayor’s other priorities).

That would be a terrible statement for someone who claims he can be a positive force in Sacramento and who clearly wants to run for governor some day. The board has presented a budget that’s still fairly moderate — the tax hikes aren’t included in the spending plan, and most of what Newsom asked for is. It’s the kind of plan that a Democrat who wants to run California some day ought to be embracing. Unfortunately, Newsom insists on running on the Republican platform of cuts only, no new taxes. (Although he’s stuck a lot of hidden taxes, called fees, on small businesses.)

The mayor also has tried to use the budget process to kill some several ballot measures he doesn’t like. He wants the supervisors to get rid of proposals that would give the board shared appointments to the Rent Board and the Recreation and Park Commission along with a plan mandating community policing. In essence, he’s asked the supervisors to abandon other good-government reform policies in exchange for saving critical public services. That’s apparently not illegal (although offering to trade votes is). At the very least, however, it’s unseemly, and the board needs to make clear that it won’t accept this sort of hostage-taking.

It the mayor wants to have any kind of a productive year — and show that he can actually work with legislators — he needs to sign the budget the board sends to him and agree to spend the money the way it’s earmarked. Otherwise he’ll be acting like the governor of California — and that politician’s approval rating is about the lowest on record.

Newsom and the board’s challenge

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EDITORIAL The San Francisco supervisors took a huge step with the city budget this year: they essentially told the mayor that his approach was unacceptable, and that they were going to do it themselves.

The result — the document that the board’s Budget Committee approved and sent back to Mayor Gavin Newsom — isn’t perfect. But the members of that panel saved $40 million worth of programs from the mayor’s budget ax and got rid of two particularly bad plans: privatizing health care at the county jails and allowing more condominium conversions.

The board members are also looking seriously at putting as much as $100 million in new taxes — progressive taxes — on the November ballot. Current plans include a modest increase in the hotel tax, an increase in the real-estate transfer tax on high-end properties, and a tax on commercial rents of more than $200,000 a year, which would be paired with a reduction in the payroll tax for small businesses.

Now Newsom, who is busy running for lieutenant governor, needs to decide whether he’s serious when he says he wants to work with the supervisors on a budget everyone can accept.

On one level, the mayor doesn’t have a lot of choice — if he vetoes the proposal the board sent him, there’s a good chance the supervisors will override the veto. What he’s more likely to do is simply refuse to spend the additional money the board wants to allocate — allowing his cuts to take effect, allowing critical services to die and community-based nonprofits to close, while that money just sits in a reserve fund (or gets allocated to the mayor’s other priorities).

That would be a terrible statement for someone who claims he can be a positive force in Sacramento and who clearly wants to run for governor some day. The board has presented a budget that’s still fairly moderate — the tax hikes aren’t included in the spending plan, and most of what Newsom asked for is. It’s the kind of plan that a Democrat who wants to run California some day ought to be embracing. Unfortunately, Newsom insists on running on the Republican platform of cuts only, no new taxes. (Although he’s stuck a lot of hidden taxes, called fees, on small businesses.)

The mayor also has tried to use the budget process to kill some several ballot measures he doesn’t like. He wants the supervisors to get rid of proposals that would give the board shared appointments to the Rent Board and the Recreation and Park Commission along with a plan mandating community policing. In essence, he’s asked the supervisors to abandon other good-government reform policies in exchange for saving critical public services. That’s apparently not illegal (although offering to trade votes is). At the very least, however, it’s unseemly, and the board needs to make clear that it won’t accept this sort of hostage-taking.

It the mayor wants to have any kind of a productive year — and show that he can actually work with legislators — he needs to sign the budget the board sends to him and agree to spend the money the way it’s earmarked. Otherwise he’ll be acting like the governor of California — and that politician’s approval rating is about the lowest on record.

A new New Deal for San Francisco

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OPINION On Thursday and Friday, July 8 and 9, San Franciscans concerned about the future of their city will have a unique opportunity to devise practical, locally actionable proposals to shape and direct future policy affecting the local economy and the provision of critical human services.

On July 8, starting at 3:30 p.m. at SF Lighthouse Church (1337 Sutter at Van Ness), a New Deal for the City economic development summit will be held to address set of issues ranging from municipal reform to community-based economic development proposals. A copy of the draft positions can be found at www.sfcommunitycongress.wordpress.com.

The next day, the San Francisco Human Services Network, a 110-member organization of human and health service nonprofits, will host its New Realities summit starting at 9 a.m. at the McClaren Center at the University of San Francisco. More details about topics at the summit can be found at www.sfhsn.org/index.

The results of these two summits, along with proposals on Muni reform and affordable housing, will form the basis for a citywide meeting of “The New, New Deal for San Francisco” Congress, scheduled for Aug. 14 and 15 at USF.

The summits and congress offer a chance to discuss, adopt, and plan the implementation of a comprehensive response to the assault on the provision of critical public services and the clear failure of the local economy to respond to the current and future needs of San Franciscans. Over the past decade, San Francisco has lost, and never replaced, more than 70,000 permanent jobs as first the dot-com bust and now the implosion of the financial sector have shredded the city’s “new” economy. In a total reversal of its historic role, San Francisco is no longer the employment center of the Bay Area, but simply the high-end bedroom of a commuting workforce based outside the city.

This historic shift has meant that the primary form of development in San Francisco has gone from commercial, employment-based enterprises to high-end residential development — development that, because of Proposition 13 limits on local property taxes, simply fails to pay for the city services needed to support the existing and new residential population.

San Franciscans built a system of local governance that was unique in the state, and not often matched in the nation, in providing a level of municipal services based on the premise that we share a special place and a common future. These services were provided by a robust mixture of traditional public sector departments and innovative, community-based nonprofits. That system was itself based on an economy that mainly employed San Francisco residents in a diverse mix of economic activities with opportunities open to a wide array of people.

That economic base has been reduced to a mere shell of its former diversity, with few opportunities for even fewer people. Our current mayor has no desire to address this historic shift; instead, he is content to endlessly campaign for other offices, issue press releases on mythical achievements, and pit one portion of San Francisco against another in hopes that all forget the decline of the city under his leadership.

Progressive forces cannot again allow needed changes to be held hostage to the election of a particular candidate. We must put on the table a comprehensive, integrated set of locally actionable policies that make sense in the realities we face in the second decade of the 21st century — no matter who wins. After all, it’s our city.

Karl Bietel is a worker advocate; Fernando Marti is a community planner; and Calvin Welch is a balanced growth and affordable housing advocate.

 

D. 10 candidates DeWitt Lacy, Tony Kelly and progressive planners blast Lennar’s plan

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Recently, I spent some time talking with D. 10 candidates DeWitt Lacy and Tony Kelly about Lennar’s redevelopment plan for the shipyard and Candlestick Point. I also attended a Progressive Planners forum that addressed the massive development proposal. Those conversations and the issues they raised seem timely in light of the city’s crazily tight schedule for trying to ram final approvals for the project past government agencies this summer. And in light of three appeals that have been filed against the city’s recently certified final environmental impact report for the plan, raising concerns that the city will get bogged down in expensive and time-consuming litigation if it doesn’t get the plan right, while it still can.

(Lest other D. 10 candidates complain that they weren’t interviewed, too, I’d like to clarify that I’ll be covering the race between now and November, and I look forward to hearing what they all think at the Board’s July 13 meeting to hear appeals of the city’s final environmental impact report (FEIR) for the project. )

Both Lacy and Kelly are critics of Lennar’s plan, but not in a knee-jerk obstructionist way. Instead, they bring considered and informed critiques to the table at a time when the community desperately needs good advice and a workable strategy, if residents are to get needed amendments and concessions, before the developer get the green light, or before the Board puts  a moratorium on the project until the city’s FEIR flaws are ironed out.

Lacy is a bright and earnest candidate who learned lessons from the school of life, while growing up in San Jose in a working class family. Lacy says his father worked in an Adidas warehouse until he was injured on the job, and his mother worked as a secretary in Atari’s corporate office, but was laid off after two years.

Lacy recalls how his parents opened their own janitorial business, in the hope of making a better life for their six children.  He says that it was while cleaning homes alongside his mother, that he began to recognize the need for working class improvement and growth.

 In 1995, Lacy moved to San Francisco, where he has worked in the District Attorney’s office and formed his own law practice—experience that could serve District 10 well, since it’s home to many working-class residents and will be ground zero in the battle for construction-related contracts and environmental and economic justice, if Lennar’s massive redevelopment plan goes ahead,

“I know how to craft legislation for social justice,” Lacy said.

Lacy observes how Michael Cohen, Gavin Newsom’s top economic advisor in the Mayor’s Office of Economic and Workforce Development, has repeatedly told folks that land transferred to Lennar will be subject to a “right of reverter.”
This means the Redevelopment Agency may re-take ownership of the land, if the developer fails to substantially complete the infrastructure in the time frame set forth in the city’s development and disposition agreement (the DDA)

But Lacy observes that this “nuclear option” isn’t likely to happen with so much riding on the Lennar deal, and he stresses that additional controls are needed, if the city is to ensure that the deal remains in the best interest of San Francisco, not just the developer.

Lacy’s probably right about that. (Remember how hard the community had to fight to just get an extra 15 days to read and comment on the project’s six volume draft EIR over the winter holidays?)

And how much political pressure was exerted to ram the city’s EIR for this project across the certification line on June 3, five days before Santa Clara voters decided to support a stadium for the 49ers near Great America.

“What’s needed is an impartial arbiter,” Lacy said. “The city needs regulatory controls and the capacity to fine Lennar if it breaks promises to build affordable housing, create jobs and hire locals. You’re not going to be able to hold their feet to the fire without that.”

“I’m not saying that we should be obstructionists, critics who are trying to prevent stuff for the sake of a political battle,” Lacy added. “But we need new blood. The benefit of my campaign is that I’m not downtown’s candidate. I’m a civil rights attorney, who can help the district by figuring out what battles we need to be fighting and which battles are winnable. And I want to make sure there are jobs and business opportunities for working-class folks in San Francisco. You shouldn’t have to be a doctor or lawyer to afford to live here.”

Lacy believes the Navy should remove the radiologically impacted landfill on the shipyard’s Parcel E2.
“That ground has to be taken out of there,” Lacy said. “I would hope the City Attorney’s Office would get involved and advocate for the people. But leadership is about taking a stance when no one else is.”

With the city suggesting that it can still win back the 49ers, Lacy said that he too, would love it if the 49ers decided to stay.
 
“But not at the cost of our health and safety,” Lacy said, referring to the city’s repeated claim that it needed to rush certification of the final EIR for Lennar’s project, if there was to be any hope of winning back the team.

“ I don’t think the solution is the rush,” Lacy said. “I say, let’s make sure we clean up the shipyard properly—and bring back the Warriors [a professional basketball team that relocated to San Francisco in 1962, until 1971, when it moved to Oakland].”

I also hung out with D. 10 candidate Tony Kelly, at an event that POWER hosted as part of a Progressive Planners Forum, the day after Lacy and I unsuccessfully tried to access the shipyard, and the same day that POWER was also blocked from the yard.

Kelly has been tracking issues in and around District 10 for years, and, much like Lacy,  he’s not afraid to speak his mind on the issues.

For instance, Kelly is incensed by the city’s attempt to ram through approval of the final EIR for Lennar’s development, when the Navy has yet to complete an environmental impact statement related to its proposed clean up activities at the shipyard..
“Is the EIS ever a trailer to the EIR?” Kelly asked. “It’s like planning on Mars.”

Kelly has also expressed concern over the developer’s plan to build two peaker plants in the community.

And he is worried about the consequences of the city’s plan to turn the entire Bayview into a project survey area for Lennar’s Candlestick/Shipyard plan.

“How do you pay for any other improvements in the Bayview, when the shipyard redevelopment plan sucks all the air out of the room?” Kelly said

But Kelly’s biggest concern right now is that once Lennar gets its final approvals this summer, “the developer will never talk directly to the community again.”

At the Progressive Planners Forum that Kelly attended, speakers also voiced measured criticisms of Lennar’s plan.

“The plan has some important elements, especially in the job areas, but I think it adds up to gentrification, which is disruptive to the surrounding community, families and the last bastion of the black community in San Francisco,” said Chester Hartman, who has authored over 18 books on race and urban planning, including the acclaimed City For Sale: The Transformation of San Francisco.

“There is a need for a response in terms of an alternative approach,” Hartman advised.
“It doesn’t have to be a detailed, but it should include a basic philosophy and goals, and retain good parts of the original plan.”

Peter Marcuse, Professor of Urban Planning at Colombia University, said the situation at the shipyard reminded him of the ongoing oil disaster in the Gulf.

“Cap the land sounds like cap the spill,” Marcuse said, noting that in both cases the community is fighting to get folks who dumped toxins to clean them up.

Marcuse criticized the privatization of the planning process, as illustrated by the City’s claim that it has entered into a “public-private” partnership with Lennar,  and the community’s experience that the city and the developer keep ignoring or dismissing the public’s feedback and opinions.

 “There should have been a range of alternatives open for discussion,” Marcuse said. “Instead, there is a sense, of this mega project’s inevitability. And once the developer has title to the land, the city has to negotiate what should be a public matter.”

Marcuse critiqued the use of tax increment financing, which will use increased taxes on property throughout the Bayview to finance improvements in one relatively small area, the 770 acres of land that, as Marcuse put it, “got sold to Lennar for $1.”

“This is a form of government subsidy,” Marcuse warned.

“There have been some negotiations,” Marcuse continued. He pointed to the community-led Prop. F, which in the spring of 2008 sought to establish 50 percent affordable housing in the development. And the community benefits agreement (CBA) that the San Francisco Labor Council hammered out at in May 2008, in an attempt to nail down benefits for the community in exchange for the Council’s support for the Lennar-financed Prop. G in June 2008.

“But these negotiations with Lennar start on basis that Lennar’s interests have to be protected equally with those of the City and its residents,” Marcuse commented. “It ought to be a public responsibility to show the community what the alternates to Lennar’s vision are.”

Marcuse concluded by suggesting a moratorium on Lennar’s plan to allow for a community-based visioning process, in which residents could express their desire for housing, diversity, open space and protection against environmental hazards

‘The City should then come up with an alternative to Lennar’s plan—and listen to Lennar,” he said. “But this is a public responsibility, rather than a private negotiation with a corporation that has been a beneficiary of a huge subsidy and starts to make a huge profit, the minute its housing units begin to sell.”

Miriam Chion, who works for the Association of Bay Area Governments (ABAG), also expressed concerns with Lennar’s massive plan, which proposes to build thousands of mostly luxury condos at Candlestick Point, with a smaller number on the shipyard.

“We are in the 21st century, how can we continue to use same mechanisms of displacement?” Chion said. “And how can we do that to the African American community, which we have displaced over and over, and which has managed to build a community here, in spite of everything?”

According to Lennar’s plan, 68 percent of its proposed 10,000 units will be built at market rate. Of the remaining 32 percent of units, only 15 percent will be built at truly affordable rates, with an additional 15 percent geared towards the working middle-class income levels, such as those enjoyed by police, fire fighters, nurses and teachers.

But two Bayview residents who attended POWER’s progressive planners’ forum expressed frustration at what they perceived as outsiders trying to tell locals what’s best.

“If you haven’t lived here, you don’t know about the Bayview,” one resident said. “If they are going to do what they are going to do, they should do it all the way, and change things for the better. I’m tired of seeing kids under 12, playing outside at 11 p.m. So, if you are not from here, you can’t come on my ground and pass judgment. If you’d been and lived here, I don’t think you’d see this negatively.”

“$700 million has been spent on cleaning up shipyard, and producing highly technical reports on it,”  another local resident said. “Highly intellectual discussions are not helping, we need some action today.”

“No one here is against development,” countered long-term Bayview resident Espanola Jackson, while a Bayview resident named Nyese resurrected longstanding concerns that the developer fatally broke community trust when it failed to control asbestos dust at the site, when it began grading the shipyard’s Parcel A .

“Four years ago, I found out that they were sending home workers at the shipyard, without informing the surrounding community,” Nyese recalled. “My son was having excessive nosebleeds, so it was phenomenally insulting that they didn’t not notify us.”
“Lennar is just a name, a conglomeration of shareholders,” Nyese further noted. “We need development. But we don’t need it on chemically toxic land.”

These competing concerns indicate that all the candidates in the D. 10 race are going to have to be asking critical questions as they track the progress of Lennar, the city and the Navy’s plans this summer. Failure to do so will cost them credibility within the community—and possibly the supervisor’s race this fall, though downtown money will pour in to support whichever candidate is deemed most likely to rubberstamp present and future development and contracting plans. Stay tuned. It’s going to be a (politically) hot July.

 

The problem with the Students First initiative

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I’m not surprised that there’s an initiative in circulation that would set this as city policy:


The proximity of a student’s home to the assigned school should be the highest priority in San Francisco Unified School District’s student assignment system.



For those of you who are new to San Francisco: To enroll a child in a San Francisco public school, parents apply to seven schools and then pray their child gets into one of them. Unless a child has a sibling at a particular school, he or she will be assigned based on a secret algorithm created by monkeys throwing darts (or something like that).

Actually, most people (about 80 percent) get at least one of their school choices. And yeah, the algorithm is a bit complicated. But there’s a good reason why:

Many San Francisco neighborhoods are still racially segregated. Which means if everyone goes to his or her neigborhood school, we will have some schools at are 70 percent black, some that are 70 percent white and some that are 70 percent Asian. And that’s a bad idea.

San Francisco fought for years to comply with a 1983 consent decree in a lawsuit filed by the NAACP. THe idea was to desegregate the schools; part of the process that was developed involved giving parents a choice (which many want) over where to sent their kids — and a system for maintaining some degree of ethnic balance in the school. Subsequent litigation has made it almost impossible to use race as a factor in placing kids, so now the district uses a different system. Since we’ve stopped using race, the federal monitor reported five years ago on

the increasing resegregation prevalent in the District since 1999, and the parameters of an achievement gap that only became apparent over the past few years.

 

The district’s making progress on a lot of fronts, but the achievement gap and segregation are still serious issues in the district. The other serious issue is resources: In an era when there’s no public money, kids who go to schools where most of the parents are rich get better educational services. The parents raise money to pay for libraries, special classes, music, art, enrichment programs etc. Schools that have a demographic base that doesn’t allow for extensive fundraising can’t offer those programs to the students.

So ideally, you’d have a mix — poor kids and rich kids in the same schools. Some of that has happened at McKinley Elementary, where my daughter is going into third grade and my son just finished fifth. There are better-off families who contribute and raise money, people with financial connections who get grants etc. — and that benefits the majority of the kids, who come from lower-income families.

Actually, ideally you’d have fair property taxes, and every kid in every school would get enough tax money to thrive. But you get the point.

So this “neighborhood schools” rhetoric sounds good. But until we desegregate the neighborhoods — and change the distribution of wealth — it just ain’t gonna work. The system we have is imperfect — but it’s certainly better than what it could be if we just send everyone to school where they live.

Powder keg

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Ask any pollster, political consultant, or academic who studies the American electorate about the mood of the voters this year and you’ll get the same one-word answer: Angry.

Everyone’s pissed — the liberals, the conservatives, the moderates, the people who don’t even know where they fit in. It’s an unsettled time and, potentially, very bad news for a progressive agenda that seeks to address issues ranging from poverty and war to the long-term health of the public and the planet.

The Democrats, who swept into power with an enormously popular president just 18 months ago, may lose control of Congress. The tea partiers have driven the Republicans so far to the right that some candidates for Senate are openly talking about eliminating Social Security. The unemployment rate — the single most important factor in the politics of the economy — remains high and doesn’t show any signs of improving.

And the progressive left seems frustrated and demoralized, particularly in California. The Golden State, which once led the nation in innovation and enlightened social policy, now seems to be leading the politically dysfunctional race to the bottom.

The nation could be headed for a dangerous era, rife with the potential for right-wing demagoguery and other nasty political schisms. The state of the economy could easily fuel a more powerful movement to shrink the scope of government and a continuing backlash against the public sector — and the financial backers of the antitax and antiregulation movement are drooling at the prospect.

But there’s also a chance for progressives to seize a populist narrative and shift the discussion away from traditional disagreements and toward those areas, particularly the destructive influence on government by powerful corporations, where the grassroots right and grassroots left might actually agree.

The anger that voters feel toward a government that isn’t meeting their needs is starting to find other outlets. People are as mad about the abuses of big business — the Wall Street meltdown, the bailouts, the BP oil spill, the political manipulation — as they are about the failures of Congress and the president. If you ask Americans of every political stripe who they least trust — big government or big business — even conservatives aren’t so sure anymore.

For 30 years, the central narrative of American politics has revolved around the size and effectiveness of government. Now there’s a chance to shift that entire debate in American politics toward the largely unchecked power of corporations. It is, populist writer Jim Hightower told us, “an enormous opportunity handed to us by the bastards.”

But so far, none of the Democratic leaders in California are taking advantage of it to start dispelling damaging myths and crafting political narratives that might begin to create some popular consensus around how to deal with society’s most pressing problems.

 

THE PEOPLE WANT TAXES

There have been many polls gauging voter anger, but one of the most comprehensive and interesting recent ones was “Californians and Their Government,” a collaborative study by the Public Policy Institute of California and the James Irvine Foundation that was released in May.

It shows that Californians are mad about the state’s fiscal problems, disgusted with their political leaders, divided by ideology, and deeply conflicted over the best way forward. An astounding 77 percent of respondents say California is headed in the wrong direction and 81 percent say the state budget situation is a “a big problem.”

But the anti-incumbent message isn’t necessarily an anti-government message. Most Californians are willing to put more of their cash into public-sector programs, even during this deep recession. When asked to name the most important issues facing the state, 53 percent mentioned jobs and the economy . The state budget, deficit, and taxes only got the top billing of 15 percent.

And contrary to the conventional wisdom espoused by moderate politicians and political consultants, most voters say they are willing to pay higher taxes to save vital services. “Californians tell us they continue to place a high value on education and want education to be protected from cuts. And they’re willing to commit their money to help fund that,” PPIC director Mark Baldassare told the Guardian.

The survey found that 69 percent of respondents say they would pay higher taxes to protect K-12 education from future cuts, while 54 percent each say they would pay higher taxes to prevent cuts to higher education and to health and human services programs. In other words, voters seem to recognize where we’ve cut too deeply — and where we haven’t cut enough: only 18 percent of respondents would be willing to pay higher taxes to prevent cuts to prisons and corrections.

Baldassare said the June primary results also showed that people are willing to pay more in taxes for the services they value. “Around the state, there was a lot of evidence that people responded favorably to requests by their local governments for money, particularly for schools,” he said.

Both the California Legislature and Gov. Arnold Schwarzenegger are held in very low esteem with voters, according to the PPIC study, and Schwarzenegger’s 23 percent rating is the lowest in the poll’s history.

Barbara O’Connor, political communications professor who heads the Institute for the Study of Politics and the Media at Sacramento State University, told us that voter unhappiness with elected leaders is no surprise. Right now, most people are afraid that their basic needs won’t be met over the long run.

“The common narrative is fear, and fear channels into anger,” O’Conner said.

And that fear is being tapped into strongly this year by the Republican candidates, who are trying to scare voters into embracing their promises to gut government and keep taxes as low as possible.

“If there’s any lesson to be learned from Meg and Carly’s early ads, it’s fear-mongering, fear-mongering all the time — and that doesn’t create a very positive narrative,” O’Connor said of gubernatorial candidate Meg Whitman and U.S. Senate candidate Carly Fiorina.

O’Connor noted that Barack Obama’s campaign had great success in using a positive, hopeful message and said she believes the right leader can also do so in California. “I talked to Jerry [Brown]’s people about it and said you can’t just run a negative campaign because that’s what Meg is doing.”

Despite the tenor of the times, O’Connor said she’s feeling hopeful about hope. She also believes Californians would respond well to a leader like Obama who tried to give them that hope — if only someone like Brown can pick up that mantle. “I think the environment is right for a positive message. But the question is: do we have people capable of delivering it?”

She said the no-new-taxes, dismantle-government rhetoric has started to wear thin with voters. “The real fiscal conservatives are badly outnumbered in Californian,” O’Connor said. As for the corporate sales jobs, O’Connor said voters have really started to wise up. “They aren’t going to be scammed.”

The results of the June primary election showed that voters across the spectrum were also disturbed by big special-interest money. Proposition 16, backed by $46 million from Pacific Gas and Electric Co., went down to defeat — even in counties that tend to vote Republican.

And this fall, with two rich former CEOs spending their personal wealth to win two of California’s top elected offices and energy companies pushing a measure to roll back California’s efforts to combat global warming, there could be great opportunity in a narrative targeting those at the top of our economic system.

 

THE TOP AND THE BOTTOM

Some observers say that whatever their shared feelings about corporate scams, conservatives and liberals in the state are just too far apart, and that there’s little hope for any substantive agreement. “People are becoming more polarized,” said consultant David Latterman, who often works for downtown candidates and interests. “I think we’re beyond compromise.”

Allen Hoffenblum, a Los Angeles-based Republican strategist, agreed. “The voter are all mad, but they’re mad at different things. I just don’t see where they come together.”

But Hightower, who has spent a lifetime in politics as a journalist, elected official, author, and commentator, has a different analysis.

“As I’ve rambled through life,” he wrote in a recent essay, “I’ve observed that the true political spectrum in our society does not range from right to left, but from top to bottom. This is how America’s economic and political systems really shake out, with each of us located somewhere up or down that spectrum, mostly down.

“Right to left is political theory; top to bottom is the reality we actually experience in our lives every day — and the vast majority of Americans know that they’re not even within shouting distance of the moneyed powers that rule from the top of both systems, whether those elites call themselves conservatives or liberals.”

In an interview, he told us he sees a lot of hope in the fractured and potentially explosive political ethos. “There’s all this anger,” he said. “People don’t know what to do. And I think the one focus that makes sense is the arrogance and abuse of corporate executives.”

In fact, Hightower pointed out, the teabaggers didn’t start out as part of the Republican machinery. “Wall Street and the bailouts sparked the tea bag explosion,” he said. It wasn’t until big right-wing outfits like the Koch brothers, who own oil and timber interests and fund conservative think tanks, started quietly funding tea party rallies that the anti-corporate, anti-imperial edge came off that particular populist uprising.

“At first, the teabaggers didn’t even know where the money was coming from,” Hightower said. “You can’t be mad at the teabaggers; we should have been out there organizing them first.”

There’s plenty of evidence that anger at big business is growing rapidly — and rivals the distrust of big government that has defined so much of American politics in the past 30 years. The bailouts were “the first time in a long time that people have been slapped in the face by collusion between big business and its Washington puppets,” Hightower noted.

Then there’s the Supreme Court decision in Citizens United v. Federal Elections Commission. In January, a sharply divided court ruled 5-4 that corporations had the right to spend unlimited amounts of money supporting or opposing political candidates. Progressives were, of course, outraged — but conservatives were, too.

Polls show that more than 80 percent of Democrats think the decision should be overturned. So do 76 percent of Republicans. “This is a winner for our side,” Hightower noted. “But our side’s not doing anything about it.”

Sure, President Obama denounced the ruling in his State of the Union speech and promised reform. But the bill the Democrats have offered in response does nothing to stop the flow of money; it would only increase disclosure requirements. And in response to furor from the National Rifle Association, it’s been amended and is now so full of holes that it doesn’t do much of anything.

Political consultants advising Whitman are clearly looking for ways to direct the voter unhappiness into a demand for lower taxes and smaller budgets. She’s already vowed to fire 40,000 state workers, and her most recent campaign ad attacks Brown for expanding public programs and raising the state deficit.

So far Brown hasn’t challenged that narrative — and some Democrats say he shouldn’t. It would be safer, they say, for Brown to get out front and demand his own cuts in Sacramento. “Going after public-sector pensions is a winner,” one Democratic campaign consultant, who asked not to be named, told us. “If Whitman beats Brown on those issues, she wins.”

But that approach is never going to be effective for Democrats. If the argument is over who can better cut government spending, the GOP candidates will always win. The better approach is to see if progressives can’t shift the debate — and the anger — toward the private sector.

As Hightower put it: “You can yell yourself red-faced at Congress critters you don’t like and demand a government so small that it’d fit in the backroom of Billy Bob’s Bait Shop and Sushi Stand, but you won’t be touching the corporate and financial powers behind the throne.”

That’s where the discussion has to start. And there’s no better place than California.

The Golden State is a great example of what happens when the tax- cutters win. In 1978, the liberals in Sacramento, operating with a huge state budget surplus, couldn’t figure out how to derail the populist anger of property tax hikes. So Proposition 13, the beginning of the great tax revolt, passed overwhelmingly. Over the next decade, more antitax initiatives went before the voters, and all were approved.

Now the state is heading toward fiscal disaster. The schools are among the worst-funded in the nation. The world-famous University of California system is on the brink of collapse. Community colleges are turning away students. The credit rating on California bonds have fallen so far that it’s hard for the state to borrow money. And there’s still a huge budget gap.

The tax-cut mentality that led to the so-called Reagan revolution started in California; a political movement that shifts the blame for many of the state’s problems away from government and onto big business ought to be able to start here as well. And it’s potentially a movement that could bring together people who normally find themselves on opposite sides of the fence.

A case in point: the measure the oil companies have put on the November ballot to repeal the state’s greenhouse gas limits. The corporations backing the initiative, led by Valero, argue that California’s attempts to slow climate change will cost jobs. That’s a line we’ve heard for decades. Every tax cut, every move toward deregulation, is defended as helping spur job growth.

But the past four presidents have done nothing but cut taxes and reduce regulations — and the result is facing Americans on the streets every day. There is also growing evidence that even Republican voters don’t believe everything big businesses tell them anymore. And they’re starting to grasp that sometimes deregulation leads to outcomes like larcenous CEOs and unstoppable oil leaks.

So the potential for a successful progressive populist movement is out there. But it’s not going to happen by spontaneous combustion.

 

SF SHOWS THE WAY

On the national level, one of the factors creating this gloomy electorate is the failure of President Obama to keep the coalition that elected him active and engaged. The intense partisanship in Washinton has turned off many independent Obama voters, while his progressive supporters have been disappointed by issues ranging from his escalation in Afghanistan to tepid reforms on health care and Wall Street.

“One of the narratives now is where are the Obama voters and will they participate?” Jim Stearns, a San Francisco political consultant who works mostly on progressive campaigns, told us. “They still love Obama but they’re not moved by him anymore.”

Perhaps more important, they have lost the sense of hope that he once instilled. The Republican Party’s descent into right-wing extremism and the strong anticorporate narratives that have emerged in the last year — from BP’s oil spill to PG&E’s political manipulation to Goldman Sachs’ self-dealing to the prospect of unrestricted corporate campaign propaganda unleashed by the Citizens United ruling — have created the possibility that the negative narratives by the left may crowd out the positive ones.

“Meg Whitman is someone you can hate. She’s the rich Republican CEO trying to buy her way into office,” Stearns said. “But it’s a depressing message.”

But Stearns said there is another, most hopeful political narrative that is emerging in San Francisco, one that might eventually grow into a model that could be used at the state and federal levels. “We’re lucky in San Francisco. Progressive voters are engaged.”

He noted that San Francisco’s voter turnout was higher than expected in the June primary, and far higher than the record low state number, even though there really weren’t any exciting propositions or closely contested races on the local ballot — except for the Democratic County Central Committee, where progressives maintained their newfound control. And it’s because of the organizing and coalition-building that the left has done.

“What you’ve seen over the last few years is a coalition of labor, neighborhood groups, environmentalists, and the progressives now operating through the Democratic Party. That’s a great coalition with a lot for people to trust,” Stearns said.

Meanwhile, downtown has all but collapsed as a unified political force. “They don’t really have a political infrastructure,” Stearns said of downtown. “Normally it would be the mayor who gets everyone in line and working together.”

Even Latterman, the downtown-oriented consultant, agrees that the business community is no longer setting San Francisco’s agenda because it’s become fractured and unable to push a consistent political narrative: “There’s certainly been a lack of coordination.”

He also agrees that progressives have become more organized and effective. “Clearly, the Democratic Party of San Francisco has become a conduit for progressive politics and politicians, but not issues,” Latterman said. “What a lot of people get wrong in the city is the difference between politics and policy.”

Part of the reason is economic. With scarce resources, a high threshold for approving new revenue sources, and a fiscally conservative mayor unwilling to talk taxes, it’s been difficult to move a progressive agenda for San Francisco. And in Sacramento, it’s barely part of the discussions.

“The people of California have been held hostage by a handful of Republicans who are making us cut everything we care about,” while in San Francisco “Newsom is taking an entirely Republican approach to the budget,” Stearns said.

Looking toward the fall races, Stearns said the progressive coalition and majority on the Board of Supervisors will be tested on issues such as Muni reform, and the question will be whether fiscal conservatives like Sup. Sean Elsbernd can blame Muni’s problems on drivers, or whether progressives can create and sell a broader package that includes new revenue and governance reforms.

“The drivers are going to get their guarantee taken out of the charter, that’s going to happen. But people know that isn’t all that’s wrong with Muni,” Stearns said.

But to craft a more comprehensive solution, he said the progressives are going to need to use their growing coalition to connect the dots for voters. “We need to run a citywide campaign around a whole constellation of issues,” Stearns said, citing Muni, schools, taxes, resistance to mean-spirited measures like sit-lie, and the larger issues raised by the Brown and Barbara Boxer campaigns. “We need to figure out a way to put all that in the same coalition and run one campaign around it. And we can do that because progressives retained control of the DCCC.”

 

THE STRUGGLE AHEAD

Although they’ve made great strides, San Francisco progressives are still struggling with a mayor who sees the solution to every budget crisis as cuts — and with a growing number of efforts to blame public employees for the city’s fiscal problems. Even Jeff Adachi, the public defender once considered a standard-bearer for progressive causes, is pushing a ballot measure that would require city workers to pay more for their pensions.

Gabriel Haaland, who works with Service Employees International Union Local 1021, made the right point in the pension debate. “Big financial institutions crashed the stock market,” he said recently, “and now they want to blame city workers.”

In a blog post on the political website Calitics, Robert Cruickshank put it clearly: “The notion that ‘everyone needs to give back’ just doesn’t make sense given our economic distress. We’ve already given back too much. We gave back our wages. We gave back our ability to afford health care and housing and transportation. We gave back the robust public- sector services that created widespread prosperity in the 1950s and 1960s. We gave back affordable, quality education. And too many of us have given back our future.

“No, it’s time for someone else to give back. It’s time for the wealthiest Californians and the large corporations to give back. For 30 years now they have benefited from economic policy designed to take money and benefits from the rest of us and give it to those who already have wealth and power.”

That’s a message that ought to appeal to anyone who’s hurting from this recession. It ought to cross red and blue lines. It ought to be the mantra of a new progressive populism that can channel voter anger toward the proper target: the big corporations that created the problems that are making us all miserable.

If Jerry Brown could adopt that narrative, he could change the state of California — and the state of the nation.

Editorial: Put new taxes in the budget

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Mayor Gavin Newsom still wants to balance this year’s municipal budget with no new taxes (although he’s happy to raise the fees to use city facilities). The supervisors are looking at a different approach: John Avalos, chair of the budget committee, told us he’d like to see $100 million in new revenue on the table.

Some of that might come from a fee on liquor sales. There’s a hotel tax measure being circulated, and the supervisors are also looking at a raising the real estate transfer tax on high-end properties and imposing a commercial rent tax. All but the liquor fee would require a majority vote on the November ballot.

So far, Newsom hasn’t given any indication that he’ll support any new taxes — and that’s due in significant part to his campaign for lieutenant governor. The mayor doesn’t want to get hit by his Republican opponent as a tax-and-spend liberal, so he’s holding the line, cutting essential services instead of looking for progressive ways to bring in new revenue.

But voters up and down the state have shown their willingness to approve new taxes to save essential services, and it’s likely that San Franciscans will do the same — particularly if the folks at City Hall are united in their support.

So here’s an idea for the supervisors: why not include that new revenue as part of this year’s budget?

There’s no legal reason the budget can’t be balanced in part on the assumption of new income. November is almost halfway through the fiscal year, but more than $50 million of that revenue would be available for the 2010-11 budget.

There are distinct advantages to including that money in the budget, starting with fewer budget cuts and layoffs now. There’s also a clear political advantage: if the voters realize what’s at stake — that the money has already been earmarked and that voting it down would mean immediate reduction in vital services — the message of the importance of approving the tax measures would be even stronger.

Equally important, it would force the mayor to show his hand. Newsom would almost certainly prefer to duck the issue, to take a neutral stand on the tax measures (“let the voters decide”). He might wind up opposing all of them. But if the money’s already in the budget, what can he do? Without that tax money, the budget won’t be legally balanced. Without his support, that tax money might not come through.

It’s a risky move. If the voters reject the tax hikes, the supervisors and the mayor would be forced to make painful midyear cuts. But they’ll have to make those cuts anyway, either now or in November. And once you shut down services or eliminate nonprofit contracts, it’s much harder and more expensive to start them up again.

So this might be the year to take the calculated gamble: assume that money’s going to be there. Then everyone, including the mayor, can help make sure that it actually is.

Put new taxes in the budget

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EDITORIAL Mayor Gavin Newsom still wants to balance this year’s municipal budget with no new taxes (although he’s happy to raise the fees to use city facilities). The supervisors are looking at a different approach: John Avalos, chair of the budget committee, told us he’d like to see $100 million in new revenue on the table.

Some of that might come from a fee on liquor sales. There’s a hotel tax measure being circulated, and the supervisors are also looking at raising the real estate transfer tax on high-end properties and imposing a commercial rent tax. All but the liquor fee would require a majority vote on the November ballot.

So far, Newsom hasn’t given any indication that he’ll support any new taxes — and that’s due in significant part to his campaign for lieutenant governor. The mayor doesn’t want to get hit by his Republican opponent as a tax-and-spend liberal, so he’s holding the line, cutting essential services instead of looking for progressive ways to bring in new revenue.

But voters up and down the state have shown their willingness to approve new taxes to save essential services, and it’s likely that San Franciscans will do the same — particularly if the folks at City Hall are united in their support.

So here’s an idea for the supervisors: why not include that new revenue as part of this year’s budget?

There’s no legal reason the budget can’t be balanced in part on the assumption of new income. November is almost halfway through the fiscal year, but more than $50 million of that revenue would be available for the 2010-11 budget.

There are distinct advantages to including that money in the budget, starting with fewer budget cuts and layoffs now. There’s also a clear political advantage: if the voters realize what’s at stake — that the money has already been earmarked and that voting it down would mean immediate reduction in vital services — the message of the importance of approving the tax measures would be even stronger.

Equally important, it would force the mayor to show his hand. Newsom would almost certainly prefer to duck the issue, to take a neutral stand on the tax measures ("let the voters decide"). He might wind up opposing all of them. But if the money’s already in the budget, what can he do? Without that tax money, the budget won’t be legally balanced. Without his support, that tax money might not come through.

It’s a risky move. If the voters reject the tax hikes, the supervisors and the mayor would be forced to make painful midyear cuts. But they’ll have to make those cuts anyway, either now or in November. And once you shut down services or eliminate nonprofit contracts, it’s much harder and more expensive to start them up again.

So this might be the year to take the calculated gamble: assume that money’s going to be there. Then everyone, including the mayor, can help make sure that it actually is.

Raising revenues on the backs of the East Bay/working class

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If you are one of the many thousands of people who commute the Bay Bridge each day, then you already know that the  toll is going to increase on Thursday, July 1 to $6 during commute hours, and that the car pool is going to stop being free and start costing $2:50 (and you’ll need a Fastrak pass to use it). Tolls will also rise to $5 on Antioch, Benicia-Martinez, Carquinez, Dumbarton, Richmond-San Rafael and San Mateo-Hayward bridges. What you may not know is that San Francisco is also planning to start charging fees this summer to  “out-of-towners” to access certain facilities.

http://www.youtube.com/watch?v=pCivf4OMuqY

As an East Bay resident and a member of San Francisco’s workforce, I understand the logic behind all these toll and fee increases: raise tolls to get cars off roads, people onto public transit, and spare the air in the process. And raise entrance fees for tourists, so as to generate revenue for cash-strapped city departments.

And yet, it feels like working-class folks who can’t afford to raise their families in San Francisco keep getting stuck with the bill for the excesses of the city’s real estate market, while the folks who made money gaming the real estate market in the ’90s and the Noughties keep leading the “no new taxes, lots of new fees” mantra.

That extra $2 a day to get to work is going to cost working folks about $500 more a year, at a time when wages are either stagnant or being cut. So, don’t be surprised if we stop spending any money on buying food in the city, to make ends meet. But should we also plan to stop visiting fee-charging city facilities?

I ask because a recent article in the Chronicle pointed out that “Out-of-town visitors will have to start paying an admission fee to San Francisco’s tranquil and well-tended Botanical Garden in Golden Gate Park, now that the Board of Supervisors signed off on the proposal after months of heated public debate.”

San Francisco residents will continue to get free entry, the article reported, but other adults will have to pay $7 to get into the Botanical Garden, starting in late July or early August. (Discounts will be offered to seniors and youth.)

“The total price for a family will be capped at $15,” the Chron reported, ” and the money-making initiative is expected to generate $250,000 a year for the city’s strapped Recreation and Park Department, officials say.”

It’s not clear from that report whether the city’s commuters who now account for more than 50 percent of the city’s workforce) are classified as “out-of-towners?” And if it turns out that we are not, I’ll post an update here in short order. But I suspect we are, since we don’t actually live here, (even if we do spend half our lives working in a building within city limits).

Update: Lisa Van Cleef, public spokesperson for the Botanical Gardens (a former SFBG worker, when the Guardian was still on York Street) confirmed that Mayor Gavin Newsom is expected to sign the Botanical Gardens fee hike legislation by the end of this week.

“All San Francisco residents have free admission,” Van Cleef emailed. “Non-residents including those who work in SF, will pay the $7.00.”

In her email, Van Cleef made a great case for visiting the Botanical Gardens.

“It is very different than a park,” she wrote. “With 26 distinct gardens and collections, our visitors can experience incredible rarities from  Asia, Australia, New Zealand, Central and South America, and South Africa, plus our award-winning California Native Plant Garden 
complete with a century-old redwood forest. Hundreds of our plants are rare and/or endangered in the wild.Right now, the Passionflowers, Chilean, Australian and Perennial gardens are looking exceptionally great with lots in bloom.”

So, I guess I’ll be tempted to visit, fee or no, even as I wish for a more equitable way to generate new city revenues, in future.

Now, it’s easy to demonize folks who drive to work from the East Bay, as being irresponsible climate change inducing air polluters. But I can’t help noticing that many folks on the road alongside me each morning are driving beat-up pick-ups full of work tools and cars full of infant seats and toys. These are working class family-oriented folks who definitely pay their “entrance fee” into the city each day. (And then there’s the fact that we are paying to cross a bridge that no longer feels entirely safe to drive across, but that’s a whole other story.)

But when out-of-town commuters use public transit, it can take several hours each way–between bad connections and cut services–unless we live and work close to BART. And those hours spent waiting for the T-Third or changing buses adds up to precious time we don’t spend with our families, and costs a lot in child care.

That’s why I’m getting sick of the  “cyclists v drivers” debate in San Francisco. Because it’s a divisive, misleading debate. There are saints and sinners on both sides of that debate’s equation, but when it comes to actually getting folks off the road and onto public transit, the real issue continues to be the cost of housing and the lack of a truly comprehensive public transit system in San Francisco. And I’m not seeing the kind of planning in the pipeline that would allow working-class families to move back into town and/or make traveling to and from the East Bay less of a nightmare.

Instead, there are plans to build thousands and thousands of condos where a couple could possibly raise one child–until the crying and the constant bits of Lego underfoot in the condo’s swag carpetting get them fleeing to the Oakland hills, and beyond.

So, go ahead and bite me and the rest of the working class commuters with more fees, both at the toll booths and at the entrance gate to  the Botanical Gardens. We don’t have much choice but to pay them, if we want to keep our jobs in the city, and enjoy ourselves in our downtime before making the return commute. But milking us is not going to solve the underlying problem in a city that sold out to the highest bidder a long time ago. Yes, this is a bit of a “whine” piece, and it’s coming from someone who enjoys navigating her “London Taxi” as I like to call my anonomobile, through the roughest of city streets. But seriously folks, when is someone going to have the balls to raise taxes on the rich in this richest of cities and stop sticking it to the poor?

“No new taxes,” but fees and restrictions may apply

The agenda for the June 29 Board of Supervisors meeting reads like the fine print of a credit card statement, with fees piled upon more fees.  Mayor Gavin Newsom is proposing a slew of increases to sums that must be forked over for a wide array of city services or permits as a way to bridge a gaping budget gap. With major cuts to critical services in the face of a dramatic revenue shortfall, it’s not surprising that the city is tightening its squeeze to make up for some of the damage.

Some of the proposals make a certain amount of sense. There are higher fees proposed for an underground parking lot at Golden Gate Park, which could potentially help dissuade motorists and promote more environmentally friendly transportation options. There are higher fees for tow truck operators, which most anyone who’s ever involuntarily had their car towed could get behind. And the fee for discharging a cannon may go up from $400 to $636. While we’re pretty sure that last one is more likely to irk people who attend military ceremonies, we nonetheless take delight in imagining a rambunctious crew of pirates spilling into the board chambers to oppose it.

But this roster of Newsom’s new hidden fees begs an important question: Why is a mayor so adamantly against raising taxes bent on vacuuming more money out of the pockets of small business owners with higher fees? After all, many of these proposed increases will squeeze struggling, Mom-and-Pop businesses just a little tighter. City permits for auto wreckers, billiard parlors, junk dealers, and massage establishments may go up significantly. The fee for taking an EMT course may get higher. Permits for selling food on the street, driving a pedicab, dealing in second-hand auto parts, or operating a shooting gallery could also increase. Even the annual permit fee for street artists (several of whom we wrote about in our Streets Issue) is getting more expensive.
 
The list of fee hikes is on the agenda for Tuesday’s meeting, and was referred to the full board by the Budget & Finance Subcommittee. Supervisors recently proposed a number of new revenue generating measures including a nickel-per-drink tax on alcoholic beverages, an increase to the hotel tax, and a restructuring of the business payroll tax.

“There are no new taxes in this budget,” Newsom declared during a June 1 announcement in which he unveiled his 2010-2011 budget. “I know some folks just prefer tax increases. I don’t.”

But why reject taxes outright and then quietly propose a bunch of fees that will place a higher burden on the individuals they impact?

“No new taxes” may sound like music to the ears of a public awash in financial woes, but Newsom’s hidden fees are not unlike taxes. Under this philosophy, it’s not desirable to ask everyone to pitch in an extra nickel the next time they buy a cocktail, but there’s no problem with asking the bar to fork over hundreds more annually for a health inspection. That doesn’t seem to be as simple as a campaign-ready “no new taxes” slogan, but then again, there’s a reason credit card companies bury their hidden fees in the fine print.