taxes

Jerry Brown releases forceful announcement speech

Sasha Cuttler
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Jerry Brown announced his candidacy for governor by posting a three-minute speech on You Tube that was forceful and direct, making the case that California is in crisis and needs experienced, knowledgeable leadership, not an anti-government outsider who’s new to politics.

“We tried that and it doesn’t work. We found out that not knowing is not good,” Brown said in a veiled swipe at both Gov. Arnold Schwarzenegger and likely Republican nominee Meg Whitman, a former CEO with no political experience who has rarely even voted.

This speech was right on the money, and a sharp contrast to his recent Sierra Club speech, which I criticized here – demonstrating that when Brown gets his game face on, he’s still a formidable political pro.

“It’s no secret that Sacramento isn’t working today. Partisanship has become poisonous, political posturing has replaced leadership, and the budget: it’s always late, it’s always in the red, and it’s always wrong,” he said.

It was short on specifics, but that’s probably understandable at this stage. He talked about created a “leaner” state government, but also decried the cuts in education spending, and ended up staking out an interesting position on the critical issue of taxes, pledging, “No new taxes unless you the people vote for them.”

Perhaps Brown is just the guy to begin to persuade Californians that we can’t have it all, and that we’ll have to raise taxes on rich individuals and corporations if we want to do something about our underfunded infrastructure and declining public services. After all, he described our current situation as “a crisis” and said, “You deserve the truth and that’s what you’ll get from me.”

If he wins, this will likely be this septuagenarian’s last job in politics, one in which he’ll hopefully be willing to push for what needs to be done, even if that hurts his popularity. “At this stage in my life, I’m prepared to focus on nothing else but fixing the state I love.”   

 

 

Pressure builds to save Muni

Sasha Cuttler
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Pressure builds to save Muni

Widespread frustration with Muni service cuts and fare hikes – passionately expressed by the public on Friday at a San Francisco Municipal Transportation Agency meeting that continues tomorrow (Tuesday, March 2, starting at noon in City Hall Room 400) – has prompted a surprisingly diverse backlash.

From angry, street-level progressive activists to the downtown-friendly San Francisco Planning and Urban Research Association (SPUR), San Franciscans are criticizing the SFMTA’s budget plan (including the 10 percent service cuts approved on Friday, which could be revisited tomorrow) as short-sighted and unnecessarily divisive, prompting the biggest and most diffuse progressive organizing effort in years.

“I’ve never seen anything like this,” SFMTA spokesperson Judson True told me as he surveyed the huge, passionate crowd assembled for Friday’s meeting, adding, “It’s clear grassroots organizing is alive and well in San Francisco.”

It’s true that grassroots organizing helped with Friday’s massive turnout, with hundreds of people lined up to give almost five hours worth of public testimony, much of it expressing frustration with poor city leadership (particularly by Mayor Gavin Newsom and his appointed SFMTA board and director) and declining public services.

But these weren’t the talking points of a centrally organized effort, which is what’s so remarkable about this movement. While many progressive groups joined forces under the Transit Not Traffic banner (coordinated by MTA Citizens Advisory Board member Sue Vaughn and others), and there’s a new San Francisco transit riders union (coordinated by transportation activist Dave Synder), the huge turnout on Friday came also from disability rights groups, ethnically identified groups from the Mission and Chinatown, the Senior Action Network, San Francisco Tomorrow, the social justice group POWER, the antiwar ANSWER Coalition, and several other groups, with very little coordination among them.

“We are really seeing a diverse group of people arguing for transit justice,” said Marc Caswell of the San Francisco Bicycle Coalition, which was part of the Transit Not Traffic coalition.

In fact, with Muni fares increasing and services declining since Newsom became mayor, a wide variety of groups seems to have figured out independently that there’s something seriously wrong with Newsom’s no-new-taxes approach to running the city, particularly given declining transit funding from the state and feds.

“These aren’t solutions. They’re just pitting one group against another,” said Frank Lara of the ANSWER Coalition, which opposes a proposal for extended parking meter hours, much to the chagrin of progressive groups who want motorists to help close the budget gap by giving up their free parking on Sundays.

One SPUR proposal also seeks to eliminate this pitting of groups against each other, listing as its biggest dollar proposal the elimination of work orders from the San Francisco Police Department, which would save $12.2 million per year, which the SFPD charges SFMTA for unspecified services that it has yet to document, despite agreeing to as part of last year’s budget deal.

When asked about the work order proposal, Newsom press secretary Tony Winnicker said doing so would make Muni less safe by discouraging officers from riding buses, saying such work orders were a “good accounting practice” rather than the budgetary shell game that progressive supervisors and SPUR director Gabriel Metcalf have called it.

“The gamesmanship with work orders has got to stop,” Metcalf told the Guardian, criticizing the SFMTA for cutting service across the board and raising fares for express bus service and cable cars. “They don’t have to do that and they shouldn’t do that. They just need some political courage right now.”

The next largest SPUR proposals are to charge $300 per year for disabled placards that allow drivers to park for free (which would raise $10 million per year) and to enforce existing city codes that require garages to charge by the hour rather than all day (which would raise $6.85 million), followed by Muni work rule changes that would need union approval.

Winnicker said Newsom was aware of the big turnout on Friday and the anger voiced by the crowd, telling us, “He understands people are concerned and he shares those concerns.” But rather than accepting that many people blame Newsom, Winnicker blamed Muni’s Transportation Workers Union for voting down about $5 million worth of wage concessions and work rule changes. Yet many speakers criticized Newsom’s finger-pointing on Friday, saying he and the SFMTA were too focused on targeting workers rather than the downtown corporations that Newsom has refused to adequately tax.

“There was already a fare increase last year, so for the low-income popular, this is major,” Wing Hoo Leung, vice president of the Community Tenants Association, told me in Mandarin, translated by Tan Chow, an organizer with Chinatown Community Development Center. “In a bad economy, the low-income people can’t get hit again and again. We need to cut from the top.”

Tax measures will be a big part of tomorrow’s SFMTA discussion of the $100 million budget deficit looming for the next two years – such as a parcel tax, downtown transit assessment district, parking tax increase, or local vehicle license fee — and several SFMTA board members agreed with the statement made Friday by Trustee Malcolm Heinicke that, “We need to look for other sources of revenue.”

Even Winnicker said Newsom acknowledges the need to discuss tax measures, even though he philosophically opposes them: “He understands that many things have to be on the table to close next year’s budget gap.”

But he’s far from advocating for any revenue-side solutions.

“The mayor doesn’t think the tax measures will have much public support,” Winnicker said. Yet progressive groups say that’s because Newsom has undermined people’s faith in local government and actively opposed tax increases rather than trying to make the case to the public that they’re needed to present public transit and other vital services.

“Newsom has to be out there fighting, one at the state level, and he needs to show some leadership here,” said Bob Allen of the group Urban Habitat. “I don’t want to hear Gavin Newsom say again that this is a transit-first city if he’s not going to do anything to support it.”

But Allen said that if Newsom and other city leaders made the case for new taxes to support transit and ran a strong campaign, “This city will support a ballot measure to protect Muni and expand it.”

Yet right now, he said one of the things frustrating low-income San Franciscans is there is a basic inequity between motorists and Muni riders: “If parking is going to be free on Sunday, transit should be free on Sunday. If parking is going to be free in the evenings, transit should be free in the evenings.”  

Newsom has long voiced opposition to extended meter hours, only recently softening that position slightly to possibly allow for a small pilot program for Sundays. But his appointed trustees might be willing to go even further, with Bruce Oka saying on Friday, “I know the mayor doesn’t like it, but it has to be tried.”

It’s so easy to go after public employees

Zelda Bronstein
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It’s so easy to go after public employees

The always-insightful Robert Cruickshank has a fascinating piece on Calitics today talking about the investigative reports showing that some state employees save up all their vacation time and get big payouts when they retire. It’s true that some state workers walk away with upwards of $100,000, and it’s true that it pisses people off, and it’s true that there probably ought to be some reforms that limit the amount of vacation time you can save and cash in.


But as Cruickshank notes, the payouts have cost the state $486 million since 2006, and:


$486 million sounds like a lot of money. But that is just 2.43% of the current $20 billion deficit. In other words, if we had eliminated that practice in 2006, or capped it, the budget deficit would not be meaningfully impacted. In fact, given that we’ve had about $60 billion in budget shortfalls since 2007, these vacation payouts are 0.81% of the overall deficit.


He explains:


Of course, these kinds of articles help build a larger narrative that the budget problem is in large part caused by greedy public sector workers who are paid too much. The actual numbers here indicate that the vacation payouts are not a meaningful part of the budget problem at all. Similarly, Meg Whitman’s desire to layoff 40,000 state workers would probably save about $2.5 billion (assuming those workers make the state average). That’s a bigger chunk of the projected $20 billion deficit, but it’s still only 12.5%. Whitman and other critics of public employees need to come up with solutions for the other 87.5% of the deficit.


Maybe one place to start is by looking at how the rich evade their tax obligations. Last week the LA Times’s Michael Hiltzik showed that Frank and Jamie McCourt paid no federal or state income tax between 2004 and 2009. Many wealthy Californians and large corporations have similarly evaded taxes.


So why do the relatively minor excesses by state employees get much more press attention that the vast cheating and looting of the public treasury by the rich and by big businness? Well, after 30 years in journalism, I can tell you one reason:


It’s easy.


State employee payrolls are public record. It’s easy to find out how much overtime Muni drivers make, or how many city workers earn more than $100,000 a year, or what the firefighters contract allows. Editors love these kinds of stories, because they always stir up populist indignation and outrage.


I’ve done it myself. We all do.


On the other hand, try to figure out how a big commercial property owner is using complicated stock transfers to hide a change in ownership and avoid tens of millions of dollars in property-tax liability. It’s a bitch. That kind of work takes weeks, months of investigation and requires some sophisticated legal and financial knowledge. See, the private sector — particularly the folks who are hiding behind tax shelters and scams — is big on secrecy, and the laws don’t help reporters.


Investigative reporting on the private sector is expensive. And in these days of diminished news budgets, not that much of it happens any more.


So the message you get in the press is that public employees are busting the budgets, and if we could just quit paying them so much money all would be fine. And the real budget busters, the real scam artists, the real crooks who are sucking the public treasury dry … they just keep right one going. And nobody’s paying attention.

Marching on Sacramento

Zelda Bronstein
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Marching on Sacramento

Angry parents, hundreds of them, met in Marina Middle School to demand an end to cuts in education.

Angry Muni riders, hundreds of them, jammed City Hall to oppose Muni fare hikes and service cuts.

Angry students from the University of California — thousands of them — will hold a huge event March 4th to push for better education funding and lower fees.

There’s something going on here — because in every case, grassroots activists in huge numbers (numbers that dwarf the so-called Tea Party events) want to force the state of California to change its budget priorities. And they are starting to talk seriously about taxes.

The Republicans are pretty intransigent up in Sacramento. But if these groups — the public school parents, the UC students, the transit users and the wide range of other middle-class folks who are sick to death of California’s budget mess and how it’s screwing them — could start working together, we could see a powerful coalition emerging.

And what that coalition needs to do, among other things, is push for Assemblyman Tom Ammiano’s legislation to change Prop. 13 and Sen. Mark Leno’s efforts to allow a local vehicle license fee, and a Constitutional amendment to get rid of the two-thirds majority for budget approval and tax hikes.

The Republicans have all signed this no-new-taxes pledge and it’s going to be hard to move them. Any attempt to change Prop. 13 will be met with huge opposition from big business. I used to think that it was hopeless even to talk about that … but maybe it’s not. Maybe if everyone who’s angry about government cuts understood that the only way to solve the problem in the end is to allow local government to raise money for the schools through property taxes, and allow state government to raise income taxes on the rich and impose taxes on big businesses, we’d be able to build a movement that could make some progress.

It’s worth thinking about.

 

Transit activists swarm City Hall

Jesse Hawthorne Ficks
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0
Transit activists swarm City Hall

Hundreds of transit supporters, angrily opposed to the package of Muni fare hikes and service cuts proposed to close a $16.9 million mid-year budget deficit, are now packed into City Hall demanding equity and justice.

“I’ve never seen anything like this,” Judson True, spokesperson for the SF Municipal Transportation Agency, told me as he surveyed the huge overflow crowd packed into South Light Court, watching the upstairs budget meeting on closed circuit television. “We should all get on buses and go to Sacramento. It’s clear that grassroots organizing is alive and well in San Francisco.”

It may be true that budget cuts and lack of political will to raise taxes in Sacramento helped cause this problem, but this crowd was angry and they directed most of that ire at the MTA board and the man who appointed them, Mayor Gavin Newsom.

Even True wasn’t spared, as college student Glo Pereira laid into him as we spoke: “I’m a person who doesn’t appreciate this,” she glowered.
That was the dominant mood among the wide coalition of groups represented here today, including a strong presence by communities of color, those with disabilities, and social justice groups.

MTA spokesperson Judson True is confronted by activist Glo Pereira

“You folks should resign! You aren’t doing your job and you haven’t done your job,” activist Bob Planthold told the board. “This is an agency run by one man, Gavin Newsom, in the interests of one man, Gavin Newsom.”

That’s a common theme, one of complete exasperperation, with regular calls to tax the rich and lay off the poor, and for more engaged leadership from the Mayor’s Office.

As I write, there’s still lots of public testimony to go before the board deliberates and votes, so check back to this blog post, which I’ll update periodically.

Update: The MTA board seems to have heeded much the public input, voting 6-1 (with Trustee Cameron Beach in dissent) to remove the increases in Fast Pass fares for youth, senior, and the disabled and to approve the rest of the fare increases, which will increase prices for express buses and cable cars. That package was then approved on a 4-3 (with McCray, Lee, and Beach in dissent, although they didn’t make clear the reason for their votes).

Similarly, another 4-3 vote by the same trustees approved a package of service reductions that total about a 10 percent overall cut, although there was a consensus direction for the board to try to spare cuts on the busiest lines, including 14, 49, 30, 38, M, and the Owl, as well as ensuring nightime cuts are minimized. Overall, the results of the vote weren’t entirely clear and the meeting wasn’t formally adjourned, but instead will be recessed until Tuesday when the board will discuss the larger budget picture going into the next fiscal year.

At that time, the board will consider placing a parcel tax or other new revenues measures on the November ballot, something that seemed to have the support of most board members. In addition, Director Malcom Heinicke today outlined his support for a extended parking meter hours, which he would like to see done as a pilot program along five or six selected commercial corridors on Sundays and on a single commercial corridor on weeknights until 10 p.m. Several board members voiced support for the idea.

While today’s vote didn’t close the $16.9 million deficit that was the purpose of this meeting and the public testimony that went for nearly five hours, MTA executive director Nat Ford noted that “there is some softness” in the revenue picture, including the possibility of getting a $7 million from the Board of Supervisors and using a greater portion of the $17 million windfall that the MTA received after the feds decided to discontinue the Oakland airport connector service on operations rather than maintenance, as staff had proposed. In addition, the MTA board is currently discussing a privatization plan for taxi medallions, which could affect the revenue picture.

I’ll try to help sort this out with another post before day’s end, including more testimony from the occassionally raucous meeting, but it appears that this meeting essentially ended with a “To Be Continued,” and the board will pick up where it left off on Tuesday, when the big new revenue proposals (which Mayor Gavin Newsom has resisted supporting) could be at the very center of the debate.

 

The battle for the forgotten district

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The battle for the forgotten district

sarah@sfbg.com

This November, when voters in District 10 — the largest, sunniest, and most diverse of the city’s 11 supervisorial districts — replace termed out Sup. Sophie Maxwell, they’ll be making a selection that could have pivotal implications for the entire city.

That’s because the next supervisor from southeast San Francisco inherits a district that is home to some of the city’s biggest environmental and public health challenges, as well as the most potential for development that will determine what kind of city San Francisco becomes.

District 10 is where you’ll find the most polluted and most underdeveloped lands in San Francisco, areas that could either be transformed into models of a sustainability or, in the words of Tony Kelly, the president of Potrero Boosters Neighborhood Association, “be turned into a toxic Foster City.”

District 10 is where the slaughterhouses, tanneries, and glue factories set up shop and used the bay as a dumping ground. It’s where the smokestacks of coal and oil fired power plants polluted the air. It’s where the Navy filled the Bay, built a shipyard at Hunters Point and loaded parts of the first atomic bomb onto the USS Indianapolis in 1945.

District 10 is where the bottom fell out of this industrial economy in 1974, when the Navy left, taking with it people’s jobs, pay, and hopes for a home of their own and a better future, particularly for what was then a predominantly African American population.

And District 10 is ground zero for plans that will triple the population and double the number of homes — homes that likely will only be “affordable” to Google executives and retirees from Marin, forever changing the face of San Francisco’s southeast sector. Critics fear that will accelerate what has been a steady exodus of black residents, replaced by megadeveloper Lennar’s vision for a new D10.

It’s against this dark history and difficult present that a wide open field of more than a dozen candidates are vying to replace Maxwell, who came to power in 2000 and has had a mixed voting record in her decade on the board. Sometimes, Maxwell was the eighth vote that let the progressive majority on the Board override Mayor Gavin Newsom’s veto and pass trailblazing legislation. Other times, she was the swing vote that allowed the moderate minority to carry Newsom’s water.

So, in addition to D10’s many internal challenges, this seat could determine the political balance of power on the Board of Supervisors, placing all the more importance on voters in this long-marginalized part of town.

 

DISTRICT OF DISCONTENT

Eric Smith, a biodiesel activist who has thrown his hat in the D10 ring, says that there is a lot of frustration in the air, and looking at the problems the district is facing, it’s hardly surprising that it has what nearly every candidate agrees is a fractured political culture.

“The Bayview, the Hunters Point Shipyard’s toxic Superfund site, the homicide rate, unemployment, poor public transportation, dwindling services and community resources have made D10 one of the city’s largest melting pots of discontent,” Smith said.

Smith’s words were spoken while the Elections Department was verifying signatures earlier this month on a second failed effort to qualify a petition to recall Maxwell.

Bayview resident and D10 candidate Marie Franklin didn’t support the attempt to recall Maxwell, but she understood it as “a frustration movement.”

“People are sinking in the sand, we’ve already lost so many of them, and they felt Sophie wasn’t doing anything for them,” said Franklin, who praised Maxwell for helping get Franklin’s apartment building complex renovated — a job that was completed 18 months ago, at a cost of $65 million, creating 500 local jobs.

“There are 654 units here, and they were uninhabitable,” Franklin said. “There was black mold, rain falling inside. We had people living worse than Haiti.”

Franklin, who said she is running because she “knows the history,” came here in 1978, when she and her son were living in a car after a fire left them homeless. She said the Bayview was a totally isolated area, barely part of mainstream San Francisco.

“There were no taxis, no services,” she recalled. “Nobody would come here, it was the stigmatized area where no one was accountable to provide services.”

The Bayview — which in some ways is the heart of D-!0 — wasn’t always a black community. But African Americans have been living here for 70 years, dealing with all the racism, denial of services, poverty, and pollution. And it bothers Franklin that 85 percent of the 10,500 homes that Lennar plans to develop won’t be affordable to the elderly, disabled, unemployed and low-income people who currently live in the Bayview.

“We need to preserve the diversity of the community and make sure their issues and information will flow to City Hall,” she said. “You must give the people a handle. If you don’t reach out, they’ll slip. That’s why folks out migrated.

Whoever succeeds Maxwell will be a central player in addressing some very big and dirty issues: the future of the Navy’s radiologically impacted shipyard at Hunters Point, Lennar’s massive redevelopment plan for the Shipyard and Candlestick Point, the polluting power plants, replacement of stinky digesters at the sewage plant, and the SF Hope public lousing rebuild.

There’s also the chance to address violence and crime. James Calloway, a candidate who has long worked in Bay Area schools, told us he believes that education and jobs are part of the keys to rejuvenating the district.

“Job opportunities are not as plentiful in the district,” Calloway said. “When I was a kid, you could walk down Third Street at 2 a.m. Now I wouldn’t walk down it at 9 p.m., and I know the area.”

Calloway is hopeful that the massive redevelopment plan, if done correctly, could start the district’s comeback. “Not a lot of black folks stay here when they have extensive education,” he said. “But it’s not only them. Many were displaced by redevelopment and had no way to go back.”

 

ELECTION UP FOR GRABS

The largest of the city’s 11 electoral districts, D10 is a huge triangular piece of land in the city’s southeast sector that was used as an industrial dumping zone for decades. Today, the district runs from the Giants stadium at AT&T Park to the 49ers stadium at Candlestick Point and encompasses Mission Bay, Potrero Hill, Dogpatch, India Basin, Portola, Little Hollywood, and Visitacion Valley. It’s also crossed by two freeways that isolate it from the rest of the city, and is home to a large number of crumbling housing projects that are in the process of being rebuilt.

Candidate Ed Donaldson grew up in the projects until he was 10 years old, when the Redevelopment Agency kicked his family out in the 1970s. “We landed on our feet, but others weren’t so lucky,” said Donaldson, who works as a housing counseling director at the San Francisco Housing Development Corporation.

“There is a sense that the Bayview and Visitacion Valley have not been included within the San Francisco family,” Donaldson said. “There is a sense of being forgotten.”

In 2007, Donaldson co-founded the Osiris Coalition to tackle the city’s dormant Certificate of Preference program, in which the Redevelopment Agency issued a document to displaced residents and businesses in the 1960s promising that they could return.

He also tried to rescue some 700 foreclosed properties and recycle them as affordable housing stock. And now he is trying to prevent the city from bulldozing seven SF Hope projects without guaranteeing residents that they have right to remain.

In 2007, Mayor Gavin Newsom and Maxwell convened an African American Outmigration Task Force that didn’t get a public hearing about its findings until August 2008. The timing angered some, who questioned why the report’s findings and implications for urban planning weren’t released before June 2008, when the residents of San Francisco voted for the Lennar-led Proposition G, a proposal to build 10,000 market rate homes at one of San Francisco’s last remaining black communities, which Newsom and Maxwell endorsed.

The taskforce didn’t publish its recommendations until the end of 2009, allegedly because of insider squabbling. Meanwhile, gentrification was going on actively, and many blamed Newsom, and by extension Maxwell, for failing to do anything with the group’s findings as D10 residents continued to suffer from high rates of asthma, cancer, unemployment and an ongoing black exodus.

It wasn’t always this way. In the 1940s, the district’s black population exploded when migrants from the south and World War II veterans came to work at the Hunters Point Naval Shipyard. Some moved to Alice Griffith Public Housing complex, or Double Rock, which was built as military housing in 1962. Others relocated to the Bayview when the Redevelopment Agency took over the Fillmore/Western Addition in the ’60s and ’70s as part of a controversial urban renewal effort.

But when the Navy abandoned the shipyard in 1974, unemployment hit the black community hard. Today, hundreds of the city’s lowest income residents live in Alice Griffith’s crumbling units and endure sewage backups, no heat, cloudy drinking water and leaking ceilings, as they wait for the projects to be rebuilt.

“Generations have been trapped in the silo of public housing and cannot get out, because of lack of opportunity and education, so when we legislate, we need to take that into consideration,” said candidate Malia Cohen, whose grandfather came from Texas to work at the shipyard where he met her grandmother, whose family came from New Orleans.

“My grandfather’s father was a longshoreman. He worked with the infamous Leroy King [a commissioner at the city’s Redevelopment Agency] and he has fantastically vivid stories of racism,” said Cohen, who works for the Federal Reserve Bank of San Francisco, previously served on the executive staff of Mayor Gavin Newsom, and has already raised over $18,000 in the D10 race and qualified for public matching funds.

“My family came here to work hard, they lived on Navy road in the projects, and then they bought a house here. My parents were born here, and we were all public schooled,” Cohen recalled as she took me on a tour of D10 that ended up in Visitacion Valley, an increasingly Chinese-American neighborhood that reflects a district-wide trend.

Census data show that by 2000, Asians were the largest racial group in the district (30 percent), followed by blacks (29 percent), whites (26 percent), and Latinos (19 percent). By 2003, according to the California Urban Issues project, the trend continued. Asians were the largest racial group (32 percent), followed by blacks (27 percent), whites (21 percent) and Latinos (17 percent) of the population.

This means that D10 candidates will have to garner support from more than one ethnic group to win. Over a dozen candidates have already filed papers in the race, but so far there is no clear front-runner.

Also frustrating the prognosticators is that fact that D10 has had the lowest voter turnout in the city, so the winner will also depend on who goes to the polls.

D10 candidate Geoffrea Morris, who is the grand daughter of longtime Bayview activist Charlie Walker, has been knocking on doors and participating in voter registration drives.

“We need new blood,” Morris said

Getting elected will be a complicated equation. Although Bayview’s population was 50 percent African American at the time of the 2000 census, it didn’t turn out the vote. In the 2006 election, only 14,000 of the district’s 37,000 registered voters went to the ballot, and 50 percent were from whiter, richer, and more Asian neighborhoods.

“It’s very important to the future of the city that the ethnicity diversity of the board be maintained and that the African American community have representation,” former Board President and current Democratic Party chair Aaron Peskin told the Guardian.

Maxwell recently told the Guardian that she’s not ready to endorse any D10 candidates yet. “I’m waiting for people to have a better understanding of what this community is, what the common thread running through it is, and how to use rank choice voting,” she told us.

The only candidate who currently holds elected office is BART director Lynette Sweet, who had her answers down pat when we reached her by phone, and even used wording that was eerily similar to Maxwell’s words.

“D10 is a pretty diverse district, but there is only one common thread: the need for economic development,” Sweet told me. “That’s true in Potrero Hill, Portola, Dog Patch and the Bayview. It’s the same mantra: a lot of small businesses need help, and the only way to help them is through economic development. In Potrero Hill it’s about land use. In the Bayview, it’s about the shipyard and better transportation and truancies.”

 

THE COMMON THREAD

District 10 is ground zero for the Lennar’s $2.2 billion plan to develop 10,500 market rate condos at the Shipyard and Candlestick Point. The plan will allegedly create thousands of jobs and new parks, deliver on an historic community benefits agreement that labor groups claim is so “lawyered up” that the developer can’t renege on its promises.

The package is framed as the one and only way to revitalize the southeast’s formerly vibrant economic engine. Indeed, any time anyone tries to slow down the process—to take time to thoroughly read the draft EIR and see if it adequately addresses the impacts of this massive urban reengineering project — a chorus of “no delays” starts up, either from residents of the housing projects desperate to see their homes rebuilt, or the labor contractors who hope to get jobs.

“It’s as if the city is playing checkers, while Lennar is playing three-dimensional chess,” Eric Smith observed.

Lennar has stated that it will contribute $711 million to finance this massive project. The remainder will be leveraged by Mello-Roos bonds, state taxes based on the use and size of a property and intended to raise money for needed services, and tax increment financing, which creates funding for projects by borrowing against future property tax revenues.

The conceptual plan won Maxwell’s backing but environmental groups are critical of the draft EIR.

During DEIR hearing, environmentalists questioned the wisdom and the cost of filling the Bay to build a bridge over Yosemite Slough, and building condos on Candlestick Point state recreation area, the only open major open space in the district.

But the city’s Planning Department also has 20,000-30,000 units of housing in its pipeline. This means that if all these plans get approved in the next decade, they’d account for 80 percent of residential development citywide. And D10’s population could triple, further skewing the district’s already shifting demographics.

In other words, D10 as we know it could become nothing more than a historic relic in a few years, and the next supervisor will play a key role in deciding whether that happens. SFHDC’s Ed Donaldson warns that any supervisor who does not understand the complexity of the city’s largest district can expect a similar recall backlash in future.

“There is no one homogenous voice in the community,” Donaldson said. “The grass-roots organizing that brought about the recall effort was a result of a changing political structure in the area, but is not yet on par with other districts in town. We still allow our politics to be controlled from downtown.”

Fellow candidate Eric Smith warns that the issues—and politics—are complex.

“People were emotional, angry, and desperate because they feel no one listens to them,” Smith said. “That’s part of the problem here; they would rather have a supervisor go down swinging for them, rather than watch one seemingly side with Lennar, PG&E and the mayor on issues contrary to their interests. That’s the terrible irony and one of the biggest problems in District 10. Folks are so mad, they’re willing to do whatever it takes to make them feel they have a voice in the outcome, even if it’s potentially worse.”

Smith cited the sequence of events that culminated last year in the Navy dissolving the community-based shipyard Restoration Advisory Board (RAB), which for years has reviewed technical documents and commented on the Navy’s clean-up proposals. But in December, the Navy made its official decision to disband the RAB, citing dysfunctional behavior and off-topic discussions that got in the way.

“Some of the same folks who were frustrated by the process, tried to send a signal to the Navy that they weren’t being heard and for all their well-intentioned efforts got the RAB dissolved,” Smith said. “I truly feel for them, it’s absolutely heartbreaking, but at times, they can be their own worst enemy.”

One of the looming issues about the shipyard is that the land has been polluted and needs to be cleaned. The shipyard contains radioactive debris from ships towed to the shipyard, after a 90-foot wave washed over them during an atomic test gone awry. The Navy burned 610,000 gallons of radioactively contaminated ship fuel at the shipyard, and workers showered on the shipyard, raising concerns that radioactive materials got into the drains and sewers. And questions have been raised about radiological tests on animals at the yard.

 

LEAKS AND FLOODS

It’s not just the shipyard that’s toxic. Even the buildings that were constructed to house workers 50 years ago are a serious mess.

Realtor Diane Wesley Smith, who grew up in public housing projects, took me on a walking tour of Alice Griffith last week to see conditions that tenants will likely have to endure until at least 2014, if the city sticks to its plan to relocate people into a new replacement unit in the same geographical area, if not the exact same site.

What we found was pretty messed up.

“The water sometimes comes out brown and feels like sand. It’s been like that for a year,” one resident said.

“The water is cloudy, the bath tub isn’t working and the sink keeps stopping up,” said another.

A woman named Silvia showed us how the water from the tap in her elderly mother’s kitchen flows out cloudy and then doesn’t settle properly, like foamy beer.

“The roof’s been leaking for years, the sewage backs up, but they just fixed the lights,” Silvia said. A neighbor named Linda was using her oven as a heater.

“The toilet backs up a lot, and my grandson’s been coughing a lot from asthma,” Linda said.

“Roaches is always a problem,” said a woman named Stormi, dressed in black sweats and a black T-shirt that read, “Can’t knock the hustle.”

“They’re trying,” said Stormi, a member of the Alice Griffith Residents Association, as a couple of Housing Authority trucks pulled up to do repairs.

“They promise that you will not have to leave your unit, but if they try to move us down to the waterfront, well, there’s a reason there’s no housing there, and it’s because the land will flood,” Stormi said.

“If we don’t end up at the table, we’ll end up on the menu,” Wesley Smith warned, as she stopped to chat with a group of young men, who were worried they would pushed out of the Alice Griffith rebuild through the criteria being established.

“Fred Blackwell, the executive director of the Redevelopment Agency, assures me that’s not the case, but Alice Griffith is a Housing Authority property, and empty promises have the potential to be great promises provided they are made in writing,” Wesley Smith said as we walked out of the projects and onto the road where a yellow and black sign announced “flooded” next to Candlestick Point park, where Lennar wants to build.

Malia Cohen expressed concern about Hope SF residents, as we drove through the Sunnydale housing project.

“We have to be diligent and mindful that people are not pushed out,” Cohen said, noting the sweeping views at Gleneagles golf course above Sunnydale, and the value of housing for a golf course community. “When public housing gets taken offline, we must work with Redevelopment and the Housing Authority to make sure no one is changing the rules halfway. We have to make sure the talks and walks line up. We need to be equal partners. We cannot be bulldozed by City Hall.”

Geoffrea Morris is a Calworks employee, at the Southeast Community College facility on Oakdale, which was built to mitigate the city’s expansion of the sewage plant in 1987. She cited concerns about the literacy levels of people who live in the 2200 public housing units that cluster D10. “A lot of people in Alice Griffith don’t even know the dates or when it’s going to be reconstructed,” Morris said. “Folks like to be told stuff like that, but the city gives you a stack of papers. Some will read them, but others rely on folks they think are trustworthy. They need stuff in layman’s terms written on one sheet of paper.”

Morris is a fan of the Internet who posted a community survey online, and made sure every housing project got some literature telling people to get informed. She worries about the digital divide in D10:

“A lot of folks don’t have computers and access to important information,” Morris said. “And let’s talk about the way ‘affordable’ is used to trick people.”

Michael Cohen, Newsom’s top economic adviser, recently stated in a memo that over the expected 15-20 year phased build out, Lennar’s Candlestick-Shipyard development would include, “up to 10,500 residential units, about 32 percent of which (3,345) will be offered at below market rates.”

“But 892 units of this ‘affordable category’ will be sold to folks earning $100,000,” Morris said. “So if you subtract 892 units from affordable unit category, you’re back to 25 percent affordable.”

Candidate Kristine Enea, an attorney and a former RAB member, chairs the India Basin Neighborhood Association, which administers a US EPA grant to hire experts to translate the Navy’s cleanup documents into plain English and comment on them She was frustrated by the Navy’s decision to dissolve the RAB.

“The lack of a forum does nothing to bolster the community’s trust in the cleanup or the redevelopment process,” Enea said.

Enea generally supports the Lennar project, but has concerns about whether it will adequately mitigate increased car traffic, or result in commercial development that benefits her neighborhood.

“India basin is a pocket of Hunters Point right along the shoreline,” Enea said. “Right now, we have no shops or restaurants, no ATM, no groceries, nothing beyond one liquor store and a few industrial businesses.

Potrero Boosters president Tony Kelly told us that District 10 residents can think for themselves. “D10 residents don’t need to rely on corporations to solve their problems,” he said.

“Folks in the eastern neighborhoods came up with a better revitalization plan than what the city proposed and community activists managed to close the power plant, after the city said it was impossible,” Kelly recalled.

And there’s no shortage of good ideas.

Kelly suggested that an urban agriculture center could immediately put low-skilled folks to work by erecting greenhouses on unused land. Smith said the industrial zone could be “incredible eco-park made from sustainable sources.

‘D 10 is the dumping ground for everything, including all the city’s waste,” he said. “We could be a shining example, not just for D 10, but the rest of the state.”

The D 10 candidate line up includes Calloway, Cohen, Donaldson, Smith, Enea: civil rights attorney Dewitt Lacy, Morris, Potrero View publisher Steve Moss; District 7 BART director Lynette Sweet, Wesley-Smith. Bill Barnes, who works for Sup. Michela Alioto-Pier, and Linda Richardson, who was appointed to the Human Rights Commission in 2007 by Mayor Newsom, have also expressed interest in the race.

In such a huge field, name identification will play a major role. Sweet is in office, but BART Board is not a high-profile job and won’t give her a huge advantage.

Cohen has a slight edge right now in that she’s raised $18,505, including $500 from former Newsom flak Peter Ragone, making her the first D. 10 candidate to qualify for campaign financing. The oldest of five girls, Cohen recalls how her mother got laid off from her city job as a school-based mental health worker and then rehired, as part of the city’s budget cuts.

“We felt that pinch and the frustrating games that are played out between the leadership and the rank and file,” she said.

Cohen who worked for Newsom in his first term as mayor, but has since left his administration , said she is uncomfortable at being framed as Newsom’s candidate.

“Because I’m not, but I am one of the few candidates who has seen how the mayor and the Board work—and don’t work—together,” she said.

Moss sees the city’s southeast as a “district in transition.” Over coffee at Farley’s in Potrero Hill, he told me that the southeastern neighborhoods could be “launching pads for environmentally sustainable growth.”

“The district’s been in a frozen period for 30 years, But despite the problems, people are deeply committed to and in love with their community.

“This district is the future of San Francisco and its social fabric—the diversity, income –and its problems are leftovers from the city’s industrial age.”

 

 

 

DISTRICT 10, BY THE NUMBERS

Total Acres: 5,650

Average household income: $85,000

Population: 73,000

Registered voters: 37,700

Average housing price: $335,000

Ethnicity (2003 figures): Asian 32%, African American, 27%, white 21%, Hispanic 17%

Development status of land: 18% residential, 38% is commercial, 38% undevelopable

All figures the latest available. Sources: SFGIS, Association of Bay Area Governments, U.S. Census, California Urban Issues Project. Ethnicity and income data is from 2003 and almost certainly has changed.

Alerts

David Talbot
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0

alert@sfbg.com

WEDNESDAY, FEB. 24

 

Party like it’s 1986!

A lot has changed since 1986, but electronic privacy law has not. Learn more about the Demand Your Dot Rights campaign — a project of the American Civil Liberties Union — and how we can work together to demand a privacy upgrade. Prizes for best 1980s attire and relics.

6 p.m., free

111 Minna Gallery

111 Minna, SF

www.dotrights.org

 

Positive Opportunities for Youth

Attend this youth resource fair and rally combining job, college, and internship opportunities with performances and speakers. The event concludes with the presentation a Youth Manifesto petition to the Oakland School Board. Support a safe learning environment where education, not military recruitment, is the priority.

2 p.m., free

Lake Merritt United Methodist Church

1330 Lakeshore, Oakl.

(510) 465-4793

 

The U.S. and the International Criminal Court

Hear William H. Taft IV of the American Society of International Law, discuss whether the U.S. should join the International Criminal Court to make it more effective in prosecuting those responsible for war crimes and crimes against humanity.

6 p.m., $15

Commonwealth Club

595 Market, 2nd floor, SF

(415) 597-6700

SUNDAY, FEB. 28

 

Complete the Gaza Freedom March

Hear cofounder of the Electronic Intifada and author Ali Abunimah discuss his recent participation in the international Gaza Freedom March, which served as a call to end Israel’s siege of Gaza on the anniversary of an assault that killed more than 1,400 Palestinians.

7 p.m., $15

Martin Luther King Jr. Middle School Auditorium

1781 Rose, Berk.

(510) 548-0542

 

You Can’t Be Neutral on a Moving Train

Join the call for an end to the wars in Iraq and Afghanistan and for the U.S. to use our taxes for healthcare, jobs, and education instead at this screening of the 2004 documentary about Howard Zinn’s life and causes. Sponsored by the Unitarian Universalists for Peace.

1:15 p.m., free

Unitarian Universalists Center

1187 Franklin, SF

(415) 776-4580

MONDAY, MARCH 1

 

Nuclear Tipping Point

Attend this screening of Nuclear Tipping Point, which looks at policymakers who advocate eliminating nuclear weapons. Includes a panel discussion with former Secretary of State George Shultz and former Secretary of Defense William Perry.

6:30 p.m., free

Cowell Theater at Fort Mason

Bay at Laguna, SF

(415) 775-2244, RSVP required

TUESDAY, MARCH 2

 

Produce to the people

Find out more about the creative ways organizations are addressing the need to find alternative models for local produce distribution, including making farm fresh produce available in underserved and neglected communities.

6:30 p.m., free

Port Commission Hearing Room

Ferry Building, 2nd floor

Market at Embarcadero, SF

www.cuesa.org

Mail items for Alerts to the Guardian Building, 135 Mississippi St., SF, CA 94107; fax to (415) 255-8762; or e-mail alert@sfbg.com. Please include a contact telephone number. Items must be received at least one week prior to the publication date.

 

Why taxes need to be on SF’s budget table

Zelda Bronstein
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18
Why taxes need to be on SF’s budget table

San Francisco missed an opportunity last fall. While communities around the Bay Area were approving new revenue plans, addressing devastating budget cuts in part by raising their own taxes, San Francisco’s mayor and supervisors were sitting on their hands, bewailing the fact that passing tax measures is tough.

But this year’s budget is even worse than last year’s, and the cuts are going to be even more brutal (particularly when you realize that the cuts will come on top of several years of previous cuts). And still, nobody at City Hall seems to be putting forward any plans to mount a campaign for new revenues in the fall.

It’s not that hard a sell, really. Brian Leubitz has an excellent report on Calitics about a new poll showing how people in California feel about pressing issues. Budget cuts are a serious concern; so is employment and the economy. Taxes don’t even rate.

In other words, even across California, where the population is far more conservative than it is in San Francisco, people worry more about budget cuts than about taxes.

If the supervisors and the mayor made even a half-serious effort to get the message out — you can raise these taxes or you can accept these cuts — I think more than half the voters (all you would need this November) would go for the new revenue, easy.

At this point in the budget cycle, this ought to be not only on the table but front and center. We should have half a dozen different revenue plans in the works; legislation should be floating around, the Budget and Finance Committee should be holding hearing, the Controller’s Office should be studying the impacts and issuing reports, and the supervisors should be preparing to include the potential revenue from a November ballot measure in their 2010-2011 budget calculations.

Why isn’t this happening? It’s almost March, and the mayor will be delivering a budget in less than three months, and at that point the supervisors will have a short few weeks to deal with devastating cuts. And it will be too late at that point to start the debate over new revenue sources.

This is the year, folks. Let’s get on the stick.  

The war on suburbs? Huh?

Zelda Bronstein
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10
The war on suburbs? Huh?

Joel Kotkin, the author and urban scholar, was on KQED’s Forum this morning talking about what he called “the war on the suburbs.” He’s got a new book out, called The Next Hundred Million: America in 2050, and he’s arguing, among other things, that the election of Scott Brown in Massachusetts signals that the Democratic Party and progressives in America have lost touch with the suburbs and are being mean to the poor suburbanites.


He talked, for example, about Tracy, California, and noted that a suburbanite living in Tracy doesn’t want to pay taxes because he doesn’t see what he’s getting for his money. Kotkin sugggestes that the state ought to go back to the Pat Brown era, and focus on spending money on infrastructure, instead of on “state employee pensions.”


Never mind that when Pat Brown was governor, the population of California was less than half what it is today — and the state was far less diverse, had far fewer immigrants, far fewer residents whose primary language is not English and, frankly, was a lot more tolerant of poverty.


That was also before the passage of Prop. 13, so the state didn’t have to spend money on schools and local government; local property taxes covered those things.


In fact, I think what’s going on is just the opposite of what Kotkin is talking about. (He, by the way, says that suburbs are going to be more and more sustainable as more jobs relocate and we start using natural gas in our cars.) I realize that suburban voters can easily shift to the Republican party if the Democrats aren’t careful, but I also think that what’s happening in the United States today is not a war on suburbs but a war on cities.


The state and federal governments have systematically defunded urban America for more than 30 years now, and we’re paying the price. The hypothetical suburbanite in Tracy may think he’s not getting his money’s worth, but the truth is just the opposite; the suburbs — typically, not always but typically — have better-funded schools, better maintained streets, better sewage systems, less crime … and less of an income gap among residents.


Cities are, and will remain, America’s future, and we ignore that at our peril.  


 

Ammiano reviving Prop. 13 reform

Zelda Bronstein
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13
Ammiano reviving Prop. 13 reform

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

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

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

 

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

 

Uproot: Playing with the new Food Environment Atlas

Jesse Hawthorne Ficks
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0
Uproot: Playing with the new Food Environment Atlas

By Robyn Johnson

The USDA’s freshly released Food Environment Atlas has been getting some buzz the last few days, coinciding with Michelle Obama’s recent vow to tackle childhood obesity and food accessibility issues and a lot of dialogue and ranting going on in the media about big bad Agribusiness and the hyper-idealism and hypocrisy of the locavore movement. (Mrs. Obama herself has drawn some fire — critics have taken aim at her overstatement of the severity of the rise of obesity and its possible fallout, the “inappropriateness” of mentioning her own daughters’ brush with chubbiness, and her dodginess about important societal causes of childhood obesity. Oh, the pitfalls of a crusading First Lady!)


The atlas interactively charts 90 indicators of the food environment, like availability of fresh produce, fast food restaurants, and grocery stores, amount of physical activity evidenced in the population, and food costs and taxes. Users can generate maps showing variations countywide, regionally, or by state, depending on the data available. Users can also make advance searches for multiple factors, like poverty prevalence plus number of farmers markets available, if you want to carefully dance the line between correlation and causation. Other features include percentages of low-income homes over a mile away from grocery stores, types and quantities of foods eaten at home, food insecurity, obesity rates, farm to school programs, and a slew of other statistical information. (For a real horror show search for low-income preschool obesity rates).

This map shows the availability of farmers markets (or lack thereof) throughout the country.

I can’t say for certain since the highly trafficked link has been breaking throughout the day, but the atlas seems to work best at giving a broader comparative perspective of the food-related socioeconomic issues of the US. When trying to identify the relative culinary desert commonly known as West Oakland, the entire Bay Area portion of the map stayed the same minty green that denotes a high access to grocery stores — clearly not the case. That being said, some interesting disparities crop up. Colorado is among the highest of the states for fast food spending per person, but also has one of the least obese populations — Coloradoans also drink the least amount of soda and rank in the highest category for exercise. Play around and see what you can find, but you may not want to jump to any conclusions ….

Labor’s love lost

Andrew Lam
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4
Labor’s love lost

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

rebeccab@sfbg.com

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

 

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

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

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

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

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

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

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

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

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

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

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

 

 

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

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

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

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

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

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

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

 

 

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

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

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

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

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

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

*Corrections made to the original file.

Editorial: How to create jobs in San Francisco

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

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

How to create jobs in SF

David Talbot
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10
How to create jobs in SF

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

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

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

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

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

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

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

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

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

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

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

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

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

 

Newsom’s $72 million corporate giveaway

Sasha Cuttler
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Newsom’s $72 million corporate giveaway

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

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

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

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

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

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

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

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

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

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

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

The “jobs” shell game

Jesse Hawthorne Ficks
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The “jobs” shell game

Written with Nima Maghame

news@sfbg.com

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Adam Lesser contributed to this report

 

Biotech’s bonanza

Jesse Hawthorne Ficks
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0
Biotech’s bonanza

By Adam Lesser

news@sfbg.com

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Alerts

David Talbot
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0

alerts@sfbg.com

THURSDAY, FEB. 11

Let BART know


Protest the upcoming BART Board meeting, which follows BART attorney Dale Allen’s announcement that BART intends to "vigorously fight [a lawsuit brought by friends of Oscar Grant] based on their contributing actions to the tragic accident." Ex-BART police officer Johannes Mehserle is being tried for murder in the case.

9 a.m., free

Kaiser Center

20th St. Mall, third floor

344 20th St., Oakl.

indybay.org/oscargrant

Responding to Mein Kampf


Attend this exhibit by French artist Linda Ellia, where pages of Hitler’s book Mein Kampf (My Struggle) have been transformed by artists, youths, and citizens into transformative artistic responses to the text creating a new book, Notre Combat (Our Struggle).

11 a.m., $10

Contemporary Jewish Museum

736 Mission, SF

(415) 655-7800

She wrote it


Attend the first lecture in the Radical Women’s 2010 Feminist Theory Series for a discussion with author and socialist feminism pioneer Clara Fraser on her book Revolution, She Wrote.

7 p.m., free

Radical Women

625 Larkin, Suite 202, SF

(415) 864-1278

V-Day East Bay


Celebrate the diversity and strength of local women at this performance of Eve Ensler’s play The Vagina Monologues starring local women. Proceeds benefit global women’s organizations.

8 p.m., $10

La Peña Cultural Center

3105 Shattuck, Berk.

(510) 849-2568?

Eat right


Dine and do good. Pick up a copy of Young Workers United 2010 Restaurant Guide to Guilt-Free Eating, which recognizes restaurants in San Francisco that provide good working environments and delicious food.

6:30 p.m., $5–$10 suggested donation

Women’s Building

Audre Lorde Room

3543 18th St., SF

(415) 621-4155

FRIDAY, FEB. 12

Black Rock


Attend this screening of the Kevin Epps film, The Black Rock: The Untold Story of the Black Experience on Alcatraz, which chronicles the role of African Americans in the history of Alcatraz.

8 p.m., $6

Artists’ Television Access

992 Valencia, SF

www.blackalcatraz.com

SATURDAY, FEB. 13

Save Stowe Lake Boathouse


Enjoy free festivities and snacks for the whole family at this historic boathouse building and help send a message to the SF Recreation and Park Department that you oppose the take-over of the top floor of the boathouse for an indoor, privately-owned restaurant. Rain cancels.

11 a.m., free

Stowe Lake Boathouse

Golden Gate Park

50 Stow Lake Drive, SF

www.savestowlake.org

TUESDAY, FEB. 16

MTA Not ATM


Protest Muni’s service cutbacks and fee hikes at this rally and press conference preceding a 2 p.m. MTA board meeting. Demand that the city implement progressive taxes instead of "taxing" the people who rely on Muni to get to work.

1 p.m., free

Steps of City Hall

1 Dr. Carlton B. Goodlett Place, SF

(415) 821-6545

Mail items for Alerts to the Guardian Building, 135 Mississippi St., SF, CA 94107; fax to (415) 255-8762; or e-mail alert@sfbg.com. Please include a contact telephone number. Items must be received at least one week prior to the publication date.

Editor’s Notes

David Talbot
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0
Editor’s Notes

tredmond@sfbg.com

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

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

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

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

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

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

Newsom’s perplexing attack on San Francisco’s economy

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

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

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

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

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

 

Trash Lit: Things are weird around ‘Mariposa’

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Editor’s note: Guardian Executive Editor Tim Redmond has a bad 30-year addiction to mystery/crime/thriller books. He’s decided that he may as well put this terrible habit to productive use by writing about these sometimes awful, sometimes entertaining and — on rare occasion — significant works of mass-market literature. Read his last installment here. 

mariposa.jpg

Mariposa
By Greg Bear
(Vanguard Press, 340 pages, $25.95)

By Tim Redmond

Good science fiction has a moral, of sorts. Frank Herbert wrote about the scary power of a charismatic leader. Robert Heinlein gave us the fun of free love and the lie of religion. William Gibson outlined the weird dangers of a digital society. My favorite sci-fi movie ever, RoboCop (1987), was all about the perils of privatizing public services.

Mariposa is part science fiction and part action thriller, and the mix works. I liked this book a lot – it’s got creepy tech advances — digital storage devices that dissolve in your blood; tattoos that allow you to exchange information by skin-to-skin contact; monitoring chips that follow your every move; roller bots; a new drug that makes you a near-legendary fighter and totally fucks up your brain – as well as a message that’s eerily relevant.

Mariposa‘s opening is bizarre. The first chapter seduces you in a way that reminds me of Neuromancer. It’s the second decade of the 21st century. Oil prices have collapsed, destabilizing much of the Middle East. The United States is $30 trillion in debt and the president has had to accept IMF-style international receivership. “And it’s all our fault,” one character notes. “We do hate paying taxes, and we do love our government services.”

And the news media? “The dwindling national press – those journalists who still worked for networks or newspapers or the five prime news sites and could afford to travel rather than just sit in front of a screen and suck coffee and pontificate on what others saw and wrote – was as worn out and discouraged as the rest of the nation.”

Most of Texas is no longer under effective federal control. The FBI is in the process of being dismantled.The real, emerging power in the nation, and perhaps soon the world, is the head of a giant private security company that got rich off military contracts. In fact, he’s trying to prove how powerful he is by orchestrating the death sentence of a 15-year-old kid who has the misfortune to be the son of a federal agent.

Into this nightmare step a handful of still-loyal FBI operatives working directly for the dying president, who has been shot with a bullet laced with deadly engineered proteins. They’re trying to rescue a deep cover agent planted in the Talos Corporation — someone who is trying to sneak the explosive data in the company’s files out of a tightly controlled compound. They’re also out to save the 15-year-old’s life before the Texas corrections system, which pretty much reports to Talos, gets to stick him with a lethal injection.

Syntobe proteins that turn Coca Cola syrup into bombs. Desert car chase with hellfire missiles in drone planes. Robot snakes retrieving blood laced with digital downloads. Slightly lame FBI sex. Wicked drug-addled martial arts fighting. A hero who fights off powerful sedatives to take out six guys with a pole ax. I have to say: This one goes down as one of the best action books of the last year.

Is the California Constitutional Convention campaign getting blacklisted?

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By Rebecca Bowe
repair california logo 2.jpg
Repair California, a nonprofit organization leading the charge for a California constitutional convention, is preparing a lawsuit against signature gathering firms that it claims are illegally boycotting the campaign. The nonprofit hasn’t divulged exactly which firms it is going after.

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

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

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

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

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

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

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

Editor’s Notes

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Editor’s Notes

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

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

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

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

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

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

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

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

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

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

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

Newsom and O’Reilly celebrate conservatism

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By Steven T. Jones

Anyone who still thinks that Mayor Gavin Newsom is a liberal who has been unfairly maligned by the Bay Guardian and other wild-eyed San Francisco lefties should watch his appearance on Bill O’Reilly’s Fox News show last night, in which Newsom praises O’Reilly (a right-wing reactionary if there ever was one) as a political moderate, correctly calls himself an economic conservative, and said he watches O’Reilly’s show every night and agrees with much of what he hears.

While Newsom meekly disagrees with O’Reilly’s ridiculous main premise that the situation in Sacramento and San Francisco proves that “liberal governance just don’t work,” he spends far more time agreeing with O’Reilly than challenging any of O’Reilly’s ludicrous and inaccurate assertions.

For example, O’Reilly blames California’s fiscal mess on liberals (actually, the main problem is our Republican governor and a two-thirds budget vote threshold that has let conservatives hold the state hostage) and casts San Francisco as increasingly overrun with homeless people and pot clubs (both of which have declined, leaving SF with just 22 licensed and well-regulated cannabis dispensaries).

Instead of defending traditional Democratic Party values (those that existed before Bill Clinton and others allowed them to be coopted by big corporations and anti-government crusaders) and his party’s current leaders, Newsom bends over backward to highlight his no-new-taxes stance and says, “We operate in a fiscally conservative manner.”

As the Chronicle reports today, San Francisco is facing a $522 million and growing budget deficit, which Newsom is only trying to increase with his proposed tax cuts and embrace of Reaganomics, while steadfastly refusing to work with others on finding new revenue sources. This is a recipe for disaster, but at least Newsom is sure to be invited back on his buddy Bill’s show, where he they can together celebrate the crash of civil society as we know it.

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