taxes

No surrender, no retreat

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rebeccab@sfbg.com

The dueling budget rallies that preceded the June 16 Board of Supervisors hearing on the city’s spending priorities officially ended the conciliatory approach offered by Mayor Gavin Newsom — a rhetorical political gambit that the Mayor’s Office never really put into practice.

The emotionally charged police and fire workers’ rally — where Police Officers Association President Gary Delagnes riled up the crowd by ridiculing supervisors as "idiots" and "carpetbaggers" — featured Newsom as the guest of honor at an event overseen by Eric Jaye, the political consultant running both the firefighters’ union budget offensive and Newsom’s gubernatorial campaign.

On a stage lined with American flags and burly public safety workers, Newsom condemned the progressive supervisor’s proposal to amend his budget over a blaring sound system. "They’re asking us to retreat," Newsom said, in full battle cry mode, "and we’re not going to do that."

Across the street, city employees from the Department of Public Health held a competing rally, flying a banner that read "No Cuts to Vital Services!" It was painfully obvious that in a squabble between city employees, the mayor was positioning himself on the side of well-paid, powerful union members who got raises instead of layoffs, rather than the public health workers and advocates for the poor whom Newsom’s budget cut the deepest.

But before progressive supervisors challenged Newsom’s proposed budget — which ignored the supervisors’ stated priorities, despite Newsom’s December pledge to work closely with the board on it — the rhetoric was quite different. "We work through our differences and ultimately try to look at the budget as apolitically as possible," Newsom said during a June 1 event unveiling his budget. "It’ll only happen by working together."

Six months earlier, when the mayor made a rare appearance at a Board of Supervisors meeting to announce the unprecedented budget shortfall of more than $500 million, he adopted a similar tone. "We have the capacity, the ingenuity and the spirit to solve this," Newsom told the board in December. "It’s going to take all of us working together. It’s in that spirit that I am here."

The mayor’s proposed budget has spurred outrage from poor people and progressive supervisors, who charge that his decision to cut critical services while simultaneously bolstering funding to the police and fire departments is morally repugnant.

Sups. John Avalos, David Campos, and David Chiu responded by passing an amendment in committee to slash $82 million from the public-safety budget in order to restore some of the cuts to public health and social services. After that move, the spirit of "working together" quickly eroded, and seemed to be replaced by the bare knuckles politics of fear and division.

After the rallies, which even spilled indoors and devolved into shouting matches between the two camps, supervisors finally got to work on the budget. And they didn’t ask Newsom to retreat, they just asked him to listen and work with them.

The $82 million dent in the public-safety budget was described as a symbolic gesture to get the mayor to take progressive concerns seriously. "For many of us, it was the only way we felt we could have a seat at the table — a seat that was real, where the discussion was going to be meaningful," Campos said.

"I do not think that this budget is bilateral. It is a unilateral budget," Chiu noted at a Budget and Finance Committee meeting.

This year’s budget battle is especially intense because of the unprecedented size of the deficit, as well as the dire economic conditions facing many San Franciscans. California’s unemployment rate climbed to 11.5 percent in May, and stood at an only slightly less miserable 9.1 percent in San Francisco, according to the state’s Employment Development Department.

Meanwhile, anecdotal evidence suggests that the number of San Franciscans in need of emergency food assistance, homeless services, and help with other basic necessities has spiked. Everyone seems to be feeling the pinch, but for the least fortunate, falling on hard times can mean relying on city-funded services for survival.

Against this dismal backdrop, big questions are emerging about the role of government. "The city’s budget," City Attorney Dennis Herrera noted at a recent hearing, "is correctly called the city’s most meaningful policy document. More than any other piece of legislation, it sets out the priorities that tangibly express the values of the City and County of San Francisco."

Sup. Ross Mirkarimi took this idea even farther at the budget hearing. "Aside from the politicking and any of the hyperbole, we [have to] do the best we possibly can for all the people of San Francisco," he said. "But in particular, the vulnerable classes, because what is also at stake is … the key question: Who’s this city for? And who gets to live here over the next 10 to 20 years, considering how cost-prohibitive it is to be in San Francisco?"

The budget battle is shaping up around some fundamental questions: is this budget going to protect the politically powerful while ignoring the thousands who are in danger of slipping through the cracks? Or will everyone be asked to make sacrifices to preserve the city’s safety net? And as these difficult decisions are hashed out, is the mayor going to sit down with the board to seek common ground?

A board hearing on the cuts to health services — which state law requires cities to hold when those cuts are deep — illustrated the divide with hours of testimony from the city’s most disadvantaged residents: those with mental health problems, seniors, SRO tenants, AIDS patients, and others.

"If we make the wrong decisions, it will mean that our homeless folks will be in ever-increasing numbers on the street. It means that folks with HIV will not receive the care they need. It will mean that kids will not have the after-school programs they need during their critical years. It will mean that our tenants will continue to live in substandard housing," Chiu summarized the testimony.

Avalos, the Budget Committee chair who has led the fight to alter Newsom’s budget priorities, has said repeatedly that cutting critical services does not work in San Francisco. And even as he proposed the amendment, he expressed a desire to reach a solution that everyone, not just progressives, would find palatable.

"We want to talk directly to the mayor, to have him meet us half-way, about how we can share the pain in this budget to ensure that we have a balance in equity on how we run the city government," Avalos noted as his committee began its detailed, tedious work on the budget. "We can do that across the hall here at City Hall, and we can do it across every district in San Francisco."

The Board approved the interim budget that more evenly shared the budget pain on a 7-3 vote, with Sups. Bevan Dufty, Carmen Chu, and Michela Alioto-Pier dissenting (Sup. Sean Elsbernd was absent because his wife was giving birth to their first child, but was also likely to dissent).

If Newsom chooses to veto the interim budget or the permanent one next month — which the board would need eight votes to override — San Francisco could be in for a protracted budget standoff, the least "apolitical" of all options. But for now, the political theater is yielding to the detailed, difficult work of the Budget and Finance Committee.

Progressive members of the committee have already signaled their intention to scrutinize city jobs with salaries of $100,000 or positions in each department that deal with public relations.

Among those highlighted in a budget analysts’ report is Newsom’s public relations team, a fleet of five helmed by a Director of Communications Nate Ballard, who pulls down $141,700 a year. Yet when the Guardian and others seek information from the office — for this story and many others — we are often stonewalled, ignored, or insulted.

During the budget hearings, the disproportionately high number of positions with six-figure salaries in the city’s police and fire departments also came under scrutiny. "What has worked in a lot of other agencies is you have employees who care deeply enough about the City and County of San Francisco that they are willing to give back in terms of salaries," Campos commented to Fire Chief Joanne Hayes-White during a budget hearing, referring to firefighters’ refusal to forgo raises.

Another looming question is whether new revenue measures will be included as part of the solution. While progressive supervisors continue to call for tax measures as a way to stave off the worst cuts to critical services, Newsom proudly proclaimed his budget’s lack of new taxes.

A press release posted on Newsom’s gubernatorial campaign Web site suggests that since raising revenues doesn’t fit with his bid for governor, it’s not likely to be entertained as a possibility. "Mayor Newsom crafted a balanced budget on time," a press release notes, "without any new general tax increases, without reducing public safety services."

It’s a stand that’s certain to yield more political clashes down the line.

"I don’t see how we can get out of this budget without bringing additional revenue into the system," Campos noted at the committee hearing. "Once people learn about the situation we are facing, they will understand the need for the city and county as a whole to contribute."

Tear up the budget

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EDITORIAL Here are a few of the new taxes in Mayor Newsom’s no-new-taxes budget.

The cost of sending your kid to a city day camp will jump 35 percent. The cost of after-school latchkey programs will go up 112 percent. It will cost a dollar more to swim in a public pool. Annual swim passes for seniors and people with economic needs will rise by $25. And that’s on top of the Muni fare hike. Fines, fees and licenses will go up a staggering 41 percent.

In other words, poor people who use city services will see their taxes — that is, the cost of using city services — go up significantly. But rich people, big business, Pacific Gas and Electric Co., property owners — they won’t pay anything more at all. (Of course, if you own a small tatoo parlor, your city fees will go up 1,200 percent.)

This is one of the essential lies of the Newsom budget. It’s not revenue-neutral at all; it just raises taxes on the poor.

It’s also not a budget that shares the economic pain fairly.

The Firefighters union is screaming that the supervisors might want to cut a little bit from that bloated agency, but their protests defy reality. In fact, the budget analyst has identified more than $6 million in relatively painless cuts to the Fire Department — and if the supervisors went along with those recommendations, the department would still be getting more than $1 million in increased funding. It’s hard to argue for cutting firefighting in a city built of wood that’s had a bad history with fires. But the reality is that San Francisco’s fire-suppression system was designed long before the days of fire codes, smoke detectors, and sprinklers, and there just aren’t as many fires these days. The budget analyst suggests — as the controller did in 2004 — that the city could temporarily close a few fire stations without any appreciable reduction in public safety.

Firefighters in San Francisco get pay and benefit parity with the cops — and the cops have gotten nice raises recently, in part because it’s been hard to recruit people to work for the San Francisco Police Department. On the other hand, there are 5,000 people on the waiting list to apply for a job as a San Francisco firefighter.

The Police Department’s due for a budget increase, too — of more than $15 million. The budget analyst suggests that $4 million of that could be cut without damaging law enforcement.

Then there’s the Mayor’s Office, where a staff of five people handle public relations for Newsom, at a cost to the public of $653,571. When Art Agnos was mayor in the late 1980s, he managed to get by with just one press secretary. The population of the city hasn’t changed; the number of reporters at City Hall has decreased. Why does Newsom need five times as many people in his communications office? And how much of that public money is actually being used to promote the mayor’s campaign for governor?

Those are just some of the revelations from the reports of the budget analyst and the hearings so far. And they add up to a budget situation that’s very different from anything the city has seen in years.

The Board of Supervisors typically tinkers with the mayor’s budget, changing a million here and a million there. This time the mayor has in effect declared war on the supervisors, appearing with the firefighters at rallies and denouncing board members (at one point Newsom told reporters, "Thank god we have a mayor.") The outcome of the current budget hearings will be a test for the progressive majority on the board, and particularly for president David Chiu. The board members have to be willing to essentially tear up the mayor’s budget, restructure the priorities, replace the fee increases with fair new taxes (even if it means including in the budget projections for tax measures to go on the November ballot), and eliminate the embarrassing waste. *

Editorial: Tear up the budget

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Editorial Here are a few of the new taxes in Mayor Newsom’s no-new-taxes budget.

The cost of sending your kid to a city day camp will jump 35 percent. The cost of after-school latchkey programs will go up 112 percent. It will cost a dollar more to swim in a public pool. Annual swim passes for seniors and people with economic needs will rise by $25. And that’s on top of the Muni fare hike. Fines, fees and licenses will go up a staggering 41 percent.

In other words, poor people who use city services will see their taxes — that is, the cost of using city services — go up significantly. But rich people, big business, Pacific Gas and Electric Co., property owners — they won’t pay anything more at all. (Of course, if you own a small tatoo parlor, your city fees will go up 1,200 percent.)
This is one of the essential lies of the Newsom budget. It’s not revenue-neutral at all; it just raises taxes on the poor.
It’s also not a budget that shares the economic pain fairly.

SF vs. the Catholics, Round One

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By Rachel Buhner

The highly anticipated showdown between the Roman Catholic Archdiocese and the San Francisco Assessor-Recorders Office came to head June 16th in the Atrium conference room located at One South Van Ness. At stake is millions of dollars in revenue to the city, and perhaps the question of whether the Catholic Church will be able to hide hundreds of millions in assets from sexual abuse victims and other litigants.

Arguing in front of the Transfer Tax Review Board, the legal counsel for both the RCA and the Assessor-Recorder’s Office presented their respective cases with minimal theatrics. However, with the city estimating the total property values of the transferred parcels ranging anywhere from $210 million to $1.25 billion, and the potential transfer tax payout to be somewhere between $3 and $15 million – on top of increased property taxes as the properties are reassessed — there was clearly at a lot at stake for both parties.

Sacramento insanity

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By Tim Redmond

Now the non-tough-guy gov says he’s going to veto the state budget if it includes any new taxes.

The new taxes, of course, include the repeal of a couple of big tax breaks that essentially hand state money to a tiny number of giant businesses.

But Schwarzenegger doesn’t care — he’s going to keep threatening the Legislature and putting forward random deadlines and trying to get an all-cuts budget.

Remember: It’s going to be hard to get to the two-thirds requirement for any new taxes anyway. (BTW, Sen. Mark Leno points out (and Assemblymember Tom Ammiano agrees) that in fact, due to some complicated legal stuff, it will indeed take two thirds to repeal the tax breaks. So already we’re looking at a budget that will need GOP support.

And the taxes are about $2 billion, matched with more than $11 billion in cuts.

And while the governor, and the major news media, keep talking about a budget deadline as if this were a typical summer, Leno points out that the Legislature has already passed a budget. This is all about revisions.

But I’m starting to think that ol’ Arnold really wants to shut down the state. There’s no other way to explain his behavior.

Arnold isn’t tough, he’s a coward

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By Steven T. Jones
arnold.jpg
I’ve had it with Gov. Arnold Schwarzenegger’s action hero bullshit, wherein he masks his cowardly failures with a tough-talking veneer. The latest example is his campaign’s (yes, the termed out governor’s Join Arnold campaign team is still quite active) latest missive on California’s $24 billion budget deficit deadlock titled “Tough Times, Tough Choices.”

“To close California’s budget gap, the Governor has proposed deep cuts to education, public safety, and health and human services. He has also made clear his commitment to making government more efficient and to finding innovative ways to stretch taxpayer dollars. Tough choices must be made to get the state through this crisis, but if these tough choices are not made, the state will again be on the brink of insolvency,” they write.

Ending public health programs, robbing schools, closing parks, letting infrastructure deteriorate, and weakening the state’s ability to keep citizens safe isn’t tough. It’s the act of a coward, a bully beating up on the weak to appear strong while cowering before the actual tough guys. Taking on his political base and advocating higher taxes on millionaires – which this state desperately needs to do – that would be tough.

The cops and the carpetbaggers

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By Tim Redmond

The Chron’s Marisa Lagos got a nice little snipe in at the bombastic leader of the San Francisco Police Officers Association, Gary Delagnes, who was blasting the supervisors for asking cops and firefighters to share some of the financial burden of the budget deficit.

Police Officers Association President Gary Delagnes went even further, specifically attacking Avalos, the board’s budget committee chair.

“I’m sick and tired of carpetbaggers coming into this city and making decisions about how we live our lives and how we’re protected,” said Delagnes, who now lives in Novato. “I grew up here, I care about this city. It’s about time these idiots over here start caring about this city.”

What the fuck right does Delagnes, who doesn’t live in the city, doesn’t pay property taxes in the city, doesn’t even get to vote here, have to complain about Avalos (who has lived here for years and been an active part of the community)?

The truth is, a lot of the cops who whine about the supervisors don’t live here. They’re off in the suburbs, where there aren’t as many homeless people, poor people, people who need city services … and that’s the attitude these carpetbagger cops bring to City Hall.

This one’s ugly

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news@sfbg.com

The most painful and divisive city budget season in many years was just getting under way as this issue went to press, with dueling City Hall rallies preceding the June 16 Board of Supervisors vote on an interim budget and the board’s Budget and Finance Committee slated to finally delve into the 2009-10 general fund budgets on June 17.

Both sides have adopted the rhetoric of a life-or-death struggle, with firefighters warning at a rally and in an advertising campaign that any cuts to their budget is akin to playing Russian Roulette, while city service providers say the deep public health cuts proposed by Mayor Gavin Newsom will also cost lives and carry dire long-term costs and consequences.

Despite Newsom’s pledges in January and again on June 1 to work closely with the Board of Supervisors on budget issues, that hasn’t happened. Instead, Newsom’s proposed budget would decimate the social services supported by board progressives, who responded by proposing an interim budget that would share that pain with police, fire, and sheriff’s budgets — which Newsom proposed to increase.

Rather than simply adopting the mayor’s proposed budget as the interim spending plan for the month of July, as the board traditionally has done, progressive supporters proposed an interim budget that would make up to $82 million in cuts to the three public safety agencies and use that money to prevent the more draconian cuts to social services.

“It’s the start of a discussion to figure out what that number should be. I don’t know where we’re going to end up,” Sup. David Campos, who sits on the budget committee, told us.

Board President David Chiu said Newsom did finally meet with him and Budget Committee chair John Avalos on June 15 to try to resolve the impasse. But he said, “We didn’t hear anything from the mayor that would change where we were last week.” They planned to meet again on June 19.

“What we proposed represents the magnitude of the challenge we face this year,” Chiu said of the interim budget proposal, seeming to indicate that supervisors are open to negotiation.

The real work begins the morning of June 17 when the Budget and Finance Committee dissects the budgets of 15 city departments, including the Mayor’s Office, of which Avalos told us, “I don’t think the mayor has made the same concessions as he’s had other departments make.”

The next day, another 13 city departments go under the committee’s microscope, including the public safety departments that were spared the mayor’s budget ax and even given small increases, and the budget of the Public Defenders Office, where Newsom proposes cutting 16 positions.

“This creates a severe imbalance in the criminal justice system,” Public Defender Jeff Adachi told us. “Why is he cutting public defender services while fully funding police, fully funding the sheriff’s department, and essentially creating a situation where poor people are going to get second-rate representation?”

That theme of rich vs. poor has pervaded the budget season debate, both overtly and in budget priorities that each side is supporting.

 

BUDGET JUSTICE

Hundreds of people whose lives would be affected by cuts marched on City Hall under the banner Budget Justice on June 10. Some of San Francisco’s most vulnerable citizens, including homeless people, immigrants, seniors, and public housing residents, turned out for the march, chanting and waving signs asking the mayor to “invest in us.”

Sups. John Avalos and Chris Daly delivered resounding speeches mirroring the anger in the crowd, and promised to fix the budget by reallocating money to protect the city’s safety net. Daly charged that even as services to the city’s vulnerable populations are being slashed, “the politically connected and the powerful get huge increases.”

Avalos took the podium just before heading into City Hall to lead the Budget and Finance Committee meeting and implored the hundreds of people gathered out front to make their voices heard. “Mayor Newsom, he told us, he said, ‘We have a near-perfect budget.’ Do we have a near-perfect budget?” Avalos asked, and then paused while the crowd cried out, “Nooo!!!!!”

During an interview discussing Newsom’s budget priorities, Avalos twice made references to The Shock Doctrine, using the Naomi Klein book about how crises are used as opportunities to unilaterally implement corporatist policies. “We have a budget deficit that is real, but it’s being used to do other things,” Avalos said. “I look at it as a way to remake San Francisco. It’s a Shock Doctrine effect.”

He referred to the privatization of government services (an aspect of every Newsom budget), promoting condo conversions and gentrification, defunding nonprofits that provides social services (groups that often side with progressives), and helping corporations raid the public treasury (Newsom proposed beefing up the Mayor’s Office of Economic and Workforce Development by a whopping 32 percent).

“It’s things that the most conservative parts of San Francisco have wanted for years, and now they have the conditions to make it happen,” Avalos said.

Much of that agenda involves slashing services to the homeless and other low-income San Francisco and de-funding the nonprofit network that provides services and jobs. “There’s an effort to say nonprofit jobs aren’t real jobs, but they are an important economic engine of the city,” Avalos told us. Those cuts were decried during the June 10 budget rally.

“What people don’t realize,” Office & Professional Employees International Union Local 3 representative Natalie Naylor said, “is that everything that’s being proposed to be cut from the city is creating no place for homeless people to go during the daytime. I don’t think Newsom’s constituents realize that we’re going to see more homeless people on the street than ever before.”

Pablo Rodriguez of the Coalition on Homelessness told the crowd that he was furious that the mayor would make such deep cuts to social services. “Stop riding on the back of the homeless, and the seniors and the children and all the community-based organizations,” Rodriguez said. “Why make the poor people pay for the rich people’s mistakes? The poor people didn’t make the mistakes.”

 

WHOM TO CUT?

The public safety unions were equally caustic in their arguments. An announcement for the Save Our Firehouses rally — which was heavily promoted by members of the Mayor’s Office and Newsom’s gubernatorial campaign team — claimed that “the Board of Supervisors voted to endanger the progress that we’ve made in public safety by laying off hundreds of police officers, closing up to 12 out of 42 fire stations and closing part of our jail.”

Actually, all sides have said the interim budget probably won’t lead to layoffs, station closures, or prisoner releases, but those could be a part of next year’s budget.

Tensions temporarily cooled a bit in the days that have followed, but the two sides still seemed far apart on their priorities, mayoral spin aside. Asked about the impasse, Newsom spokesperson Nate Ballard told the Guardian, “The mayor has already included over 90 percent of the supervisors’ priorities in the budget. But he’s against the supervisors’ efforts to gut public safety. He’s willing to work with people who have reasonable ideas to balance the budget. Balancing the budget with draconian cuts to police and fire is unreasonable.”

Campos disputed Ballard’s figure and logic. “I don’t know where that number comes from,” Campos said. “A lot of the things we wanted to protect, the mayor cut anyway.”

Campos said Newsom’s slick budget presentation glossed over painful cuts to essential services, cuts that activists and Budget Analyst Harvey Rose have been discovering over the last two weeks. “I felt the mayor has done a real good job of presenting things to make it look like it’s not as bad as it really is,” Campos said.

 

COMMITTEE WORK

Avalos expressed confidence that his committee will produce a document to the full board in July that reflects progressive priorities.

“We’re going to pass to the full board a budget that we have control over,” Avalos said, noting that a committee majority that also includes Sups. Campos and Ross Mirkarimi strongly favors progressive budget priorities.

He also praised the committee’s more conservative members, Sups. Bevan Dufty and Carmen Chu, as engaged participants in improving the mayor’s budget. “I think the tension on the committee is healthy.”

Ultimately, Avalos says, he knows the board members can alter Newsom’s budget priorities. But his goal is to go even further and develop a consensus budget that creatively spreads the pain.

“Ideally, I want a unanimous vote on the Board of Supervisors,” Avalos said.

In the current polarized budget climate, that’s an ambitious goal that may be out of reach. But there are some real benefits to attaining a unanimous board vote, including the ability to place revenue measures on the November ballot that can be passed by a simply majority vote (state law generally requires a two-third vote to increase taxes, but it makes provisions for fiscal emergencies, when a unanimous Board of Supervisors vote can waive the two-thirds rule).

Avalos has proposed placing sales tax and parcel tax measures on the fall ballot. Other proposals that have been discussed by a stakeholder committee assembled by Chiu include a measure to replace the payroll tax with a new gross receipts tax and general obligation bond measures to pay for things like park and road maintenance, which would allow those budget expenses to be applied elsewhere.

But Avalos said Newsom will need to step up and show some leadership if the measures are going to have any hope of being approved. “To get the two-thirds vote we need to win a revenue measure in this bad economy is going to be really hard,” Avalos said.

“The mayor is open to new revenue measures as long as they include significant reforms and are conceived and supported by a wide swath of the community including labor and business,” Ballard said.

Sup. Sean Elsbernd — one of the most conservative supervisors — has repeatedly said he won’t support new revenue measures unless they are accompanied by substantial budget reforms that will rein in ballooning expenditures in areas like city employee pensions.

“Pension reform. Health care reform. Spending reform. One of the above. A combination of the above,” Elsbernd told the Guardian when asked what he wants to see in a budget revenue deal.

Avalos says he’s mindful that not every progressive priority can be fully funded as the city wrestles with a budget deficit of almost $500 million, fully half the city’s discretionary budget. “It’s a crappy situation, and we can make it just a crummy situation.”

The Chron misquotes Campos

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By Tim Redmond

Sup. David Campos, who has been not only a solid progressive vote but a strong leader on city budget issues, is getting slammed today for his comments about white men — comments that were misquoted and taken out of context by the Chronicle.

Campos and Sups. Chris Daly and John Avalos have been pushing back — hard — against the bad priorities and brutal cuts in Mayor Gavin Newsom’s budget.

In fact, in a stunning political move that sets the tone for what will be a contentious budget debate, the supervisors Budget Committee yesterday sought to shift some $80 million from law-enforcement to social services. The move came during debate on what’s usually a routine issue — approving an interim budget to keep the city going for a few weeks, between the time the supervisors start discussing the budget and the time they finally approve it.

On a 3-2 vote, the committee declined to sign off on the mayor’s interim plan and instead set very different priorities. That won’t have any immediate impact (Newsom won’t have to cut police and fire spending in July) but it sent a message that this board isn’t going to simply tinker with the budget. There’s going to be a complete overhaul.

In the process, Campos blasted Newsom’s claim that the budget was nearly “pefect,” saying that “It’s a perfect budget only if you’re a wealthy, straight white man from Pacific Heights.” That’s possibly a bit of hyperbole, but it’s generally accurate — the budget is fine if you don’t want to pay more taxes and you don’t need the sort of city services that working-class and poor people rely on.

But the Chron got the quote completely wrong. In the edition that hit the streets this morning, Marisa Lagos quoted Campos as saying the budget was perfect “if you’re a straight, white male.” That, obviously, made the comment far more inflammatory — there are, as Campos well knows, plenty of poor people who are straight, white and male. “I’ve been getting hate emails, nasty calls, people calling me a racist,” Campos told us.

BeyondChron busted the Chron this morning for getting the quote wrong, and it’s corrected now in the online version. Campos isn’t backing down: “I stand by what I said. We are devastating services for poor people and people of color,” he said.

So the budget battle begins, with a bang. Good for Campos, Avalos and David Chiu, who voted to shift the budget priorities; they realize, as does anyone who goes beyond political soundbites and stops to think about it, that cutting health and human services leads to more crime, and that paying more for cops isn’t the only — or even the best — way to keep the public safe.

The Catholics and the Nazis

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By Tim Redmond

The radical right wing of the Catholic Church really has no business using the image of Nazi Germany to discredit critics. The history books (and the doctrine of glass houses) suggest a few problems with that game.

But the Thomas More Law Center, which represents the Catholic League (that group of wingos who don’t like the Folsom Street Fair) is up in arms over the fact that the 9th Circuit Court of Appeals has concluded that the San Francisco Board of Supervisors “>had the right to criticize Church positions.

And the openly anti-gay bigots dared to say this:

Richard Thompson, President and Chief Counsel of the Law Center remarked, “It is not a stretch to compare the San Francisco Board’s actions to that of the Nazi Germany policy of Gleichschaltung: vilifying Jews as an auxiliary to and laying the groundwork for more repressive policies, including the final solution of extermination. The policy of San Francisco is one of totalitarian intolerance of Christians of all denominations who oppose homosexual conduct. My concern is that if this ruling is allowed to stand, it will further embolden anti-Christian attacks.

The whole episode is kind of silly — the supervisors simply called on William (“Darth”) Levada to back off on his position that guy familes shouldn’t be allowed to adopt kids. (Which is, by the way, about the most anti-Christian position imaginable.)

The Catholics (who are happy to get tax exemptions, put biblical messages in public places, allow prayer in public schools, cheat the city out of transfer taxes and park in the middle of the Goddamn street) say the resolution was a violation of the separation of church and state.

As they say in New York, yagattabekiddin.

The deadbeat church

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news@sfbg.com

The Roman Catholic Archdiocese of San Francisco is trying to duck paying as much as $15 million in city taxes, according to documents filed by the city assessor’s office.

Assessor-Recorder Phil Ting argues that the archdiocese, which governs a collection of churches, schools, parking lots, commercial buildings, and other real property in the city, shifted 232 parcels of land from two church-held corporations to another church corporation in April 2008, triggering real estate transfer taxes.

The legal issues are complicated, and church lawyer Philip Jelsma wouldn’t return our calls, but the city officials say the deal amounts to this: The archdiocese is moving valuable property out of the hands of a corporation that might be liable for legal claims and into a separate entity that would be exempt from those claims.

And the church is taking two contradictory positions on the reorganizing. According to documents from the Assessor-Recorder’s Office, when the archdiocese is discussing the protection of its assets from litigants, it claims that the legal entities in question are separate and distinct under civil law. However, when the city comes calling for much needed transfer tax dollars, church officials argue that the entities are merely interdenominational under the common banner of the Roman Catholic Church and that the transfers are considered "gifts" under canon law.

The issue comes before the Transfer Tax Board of Review on June 16. If the board, made up of the controller, the tax collector and the head of the Department of Real Estate, upholds Ting’s position, the city will be able to collect between $3 million and $15 million, depending on the assessed value of the transferred parcels.

Major corporations in San Francisco have a long history of using bogus property transfers and shifts in corporate ownership to avoid paying property and transfer taxes. But this case is a bit more curious: why is the Roman Catholic Archdiocese, self-proclaimed champion of the poor, fighting tooth and nail to keep the city from collecting tax dollars that would help fund public welfare programs?

The deadbeat church

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news@sfbg.com

The Roman Catholic Archdiocese of San Francisco is trying to duck paying as much as $15 million in city taxes, according to documents filed by the city assessor’s office.

Assessor-Recorder Phil Ting argues that the archdiocese, which governs a collection of churches, schools, parking lots, commercial buildings, and other real property in the city, shifted 232 parcels of land from two church-held corporations to another church corporation in April 2008, triggering real estate transfer taxes.

The legal issues are complicated, and church lawyer Philip Jelsma wouldn’t return our calls, but the city officials say the deal amounts to this: The archdiocese is moving valuable property out of the hands of a corporation that might be liable for legal claims and into a separate entity that would be exempt from those claims.

And the church is taking two contradictory positions on the reorganizing. According to documents from the Assessor-Recorder’s Office, when the archdiocese is discussing the protection of its assets from litigants, it claims that the legal entities in question are separate and distinct under civil law. However, when the city comes calling for much needed transfer tax dollars, church officials argue that the entities are merely interdenominational under the common banner of the Roman Catholic Church and that the transfers are considered "gifts" under canon law.

The issue comes before the Transfer Tax Board of Review on June 16. If the board, made up of the controller, the tax collector and the head of the Department of Real Estate, upholds Ting’s position, the city will be able to collect between $3 million and $15 million, depending on the assessed value of the transferred parcels.

Major corporations in San Francisco have a long history of using bogus property transfers and shifts in corporate ownership to avoid paying property and transfer taxes. But this case is a bit more curious: why is the Roman Catholic Archdiocese, self-proclaimed champion of the poor, fighting tooth and nail to keep the city from collecting tax dollars that would help fund public welfare programs? *

Dismantling the Newsom budget

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EDITORIAL Mayor Gavin Newsom was upbeat when he delivered his budget proposal last week. It won’t be that bad, he told everyone — "At the end of the day, it’s a math problem."

Well, actually, it’s not. At the end of the day, it’s job losses, major cuts to city services, and hidden taxes — most of them, despite the mayor’s rhetoric, falling on the backs of the poor.

You can’t cut $70 million from the Department of Public Health — which is already operating at bare-bones levels after years of previous cuts — without significant impacts on health care for San Franciscans. You can’t cut $19 million out of the Human Services Agency without badly hurting homeless and needy people. You can’t raise Muni fares to $2 without taking cash out of the pockets of working-class people. The mayor’s cheery line may sound good when he’s out of town running for governor, but it’s not going to play so well on the streets of San Francisco.

Just for the record, here are a few of the proposed cuts:

A 21-bed acute psychiatric unit would be shut and replaced with an 18-bed unit for milder cases. Where would the seriously mentally ill go?

The number of home-healthcare workers, the folks who take care of the very sick who need skilled clinical services in the home, would be cut by 30 percent. Those clients would either suffer, go to (expensive) hospitals, or die.

Ongoing outpatient mental health services would be limited to the most severe cases. People who are, for now, only moderately mentally ill would lose access to care (until, without care, they become severely mentally ill).

The emergency food-bag program for seniors will lose $50,000, so hungry senior citizens won’t get to eat.

Almost $3 million will be cut from community-based organizations that provide direct, frontline services to the homeless.

Almost half of the city’s recreation directors — people who provide direct services and mentoring to at-risk youth — will be laid off.

The Tenderloin Housing Clinic Eviction Defense Center, the only place that offers free legal defense for Ellis Act evictions, will lose funding, leaving hundreds of tenants at risk of losing their homes.

Drop-in centers will close. Programs for homeless youth will shut down. More homeless people with increasingly more serious mental illness will be wandering the streets with nowhere to go for help.

Mayor Newsom brags in his campaign ads about creating private-sector jobs — but the budget will mean layoffs not just for city employees but for perhaps 1,000 nonprofit workers. That dwarfs the job creation he’s claiming — and defies the Obama administration’s call for government and private business to try to preserve and create jobs.

This isn’t a math problem. It’s a political problem, and the supervisors need to make it very clear that the mayor’s budget isn’t going to fly.

The supervisors need to take the budget apart, piece by piece, and reset its priorities. Newsom increases funding for police investigators by $7 million, while cutting the Public Defender’s Office by $2 million. He’s preserving his own bloated political operation (a big press office, highly paid special assistants and programs like 311 that are part of his gubernatorial campaign) while eliminating big parts of the social safety net. He’s raising bus fares, but not taxes on downtown.

"The mayor has presented his vision," Sup. John Avalos, who chairs the Budget Committee, explained. "Now our priorities have to be presented."

This can’t be a modest, typical budget negotiation with the supervisors tweaking a few items here and there. This is a battle for San Francisco, for its future and its soul, and the supervisors need to start talking, today, about how they’re going to fight back. *

Editorial: Dismantling the Newsom budget

1

The mayor’s cheery line may sound good when he’s out of town running for governor, but it’s not going to play so well on the streets of San Francisco.

EDITORIAL Mayor Gavin Newsom was upbeat when he delivered his budget proposal last week. It won’t be that bad, he told everyone — "At the end of the day, it’s a math problem."

Well, actually, it’s not. At the end of the day, it’s job losses, major cuts to city services, and hidden taxes — most of them, despite the mayor’s rhetoric, falling on the backs of the poor.

You can’t cut $70 million from the Department of Public Health — which is already operating at bare-bones levels after years of previous cuts — without significant impacts on health care for San Franciscans. You can’t cut $19 million out of the Human Services Agency without badly hurting homeless and needy people. You can’t raise Muni fares to $2 without taking cash out of the pockets of working-class people. The mayor’s cheery line may sound good when he’s out of town running for governor, but it’s not going to play so well on the streets of San Francisco.

Newsom’s winning the budget spin

3

By Tim Redmond

The mayor is winning the spin battle over the city budget. The Chron’s first-day story tells the tale:

San Francisco Mayor Gavin Newsom unveiled a $6.6 billion budget Monday for the 2009-10 fiscal year that he said “does a lot of extraordinary things” including bridging a half-billion-dollar deficit without raising taxes or laying off police officers, firefighters or teachers.

“It’s not perfect, but it’s as close to perfect, under the circumstances, as we could make it,” he said. “We did this without the devastation some had predicted.”

The Chron editorial the next day parrots the Newsom line:

San Francisco mayor Gavin Newsom acknowledges the obvious about next year’s budget: “It’s not perfect.” But his spending plan bridges a nearly half-billion dollar gap that existed three months ago and leaves basic services and schools in good shape.

Actually, that’s completely untrue — the devastation is going to be pretty serious. And basic services won’t be in good shape, they’ll be shredded.

But the progressives on the Board of Supervisors haven’t made that case yet — and it’s time to get started.

If we wait until the budget hearings, in a couple of weeks, the board will be on the defensive. It’s taken everyone a couple of days to figure out what’s in and out of the budget, but we know enough to understand the impacts — and we know enought to be able to argue that without some serious new revenue, the city’s going to be in horrible shape.

The mayor has, of course, dumped the budget off and fled for a fundraiser in New York . The leaders of the progressive wing on the board ought to be planning a press conference — soon — to tell the other side of the story, and they ought to be presenting an alternative fact sheet showing what Newsom really has in mind for the city.

The supervisors typically change just a tiny fraction of the budget, but this year’s going to be different. It will be — it almost has to be — a major battle over public priorities. And if the mayor sets the agenda and controls the public debate, the outcome won’t be pretty.

Is this really our only choice?

22

By Tim Redmond

603newsom.jpg 603brown.jpg

Now that Antonio Villaraigosa appears not to be running for governor, the most populous state in the nation, the world’s eighth-largest economy, is headed for a very ugly choice. The Democratic Party has exactly two prominent candidates to run California — Jerry Brown, who has become a conservative with his no-new-taxes pledge and his tough-on-crime stuff, and Gavin Newsom, who has been a pretty awful mayor of San Francisco.

Is this the best that the state can do?

It might be — and here’s the problem. In a state this big, with more than 36 million people, a race for governor is all about image. It’s about television ads and media hype — and most people don’t pay attention to the details. Brown is ahead in the polls almost entirely because of name recognition; he’s the attorney general, has been govenor before, his dad was governor, he’s run for president — people have heard of him. Liberal Democrats who are older and remember when he was the dynamic young, progressive leader think back fondly to those days. Democrats who are more moderate look at his hard-ass love-developers-and-cops tenure as mayor of Oakland. Nobody has any idea how he would fix the state’s economy; I don’t think he knows himself.

Newsom is catching up, and will make this a close race, because he’s the new young face — and because he’s got a team of consultants and producers who are experts at creating false images. He’ll run as the “green mayor,” although he’s opposed the most important environmental measures in the city. He’ll run as a sensible leader who balanced a budget with no borrowing or taxes (although he’s doing it by destroying the local safety net). What most voters won’t see is the arrogant, petulant guy who has surrounded himself with fawning accolytes and nasty hit men. They won’t see a person who is way over his head in his current job, and has no business moving on to a much bigger one.

And that’s what we’ve got.

I wasn’t kidding last week when we talked about splitting up the state. It sounds like a radical idea, but think about it: If we were electing a governor of the coastal counties between Sonoma and Los Angeles, Jerry Brown wouldn’t even be a factor — and a lot of smart, experienced progressives would have a shot at the job. We wouldn’t be facing this ugly choice of finding someone either bland or conservative enough to appeal to the Central Valley. The voting population would be much smaller, and thus the vast sums of money that candidates have to raise would be significantly reduced.

We might even get a good governor.

In the meantime, we have to do better than this. Is there nobody else out there, no real change candidate who might actually be able to take on the serious problems facing California?

Shrinking government

0

steve@sfbg.com

Mayor Gavin Newsom released his proposed 2009-10 city budget June 1, proclaiming it far better than doomsayers predicted and emphasizing how he minimized cuts to health and human services that he once said could be as deep as 25 percent in order to bridge a $438 million budget deficit.

"It doesn’t come close to balancing on the backs of our health and human services agencies, as some had feared," Newsom told the department heads, elected supervisors, and journalists who were tightly packed into his office for the announcement event.

But there’s still plenty of pain in a city budget where the General Fund — the portion of the budget local officials can control — would be reduced by more than 11 percent, its only reduction in recent memory. And at a time when every reasonable Democrat in Sacramento has been nearly begging for tax hikes to prevent budget blood, San Francisco’s Democratic mayor proudly proclaimed that there are no new taxes in the budget.

"We didn’t raise taxes, and we didn’t borrow," he said. You can almost hear that line being repeated in the ads he’ll be running as he campaigns for governor.

Newsom proposes slashing the city’s public health budget by $128.4 million, or 8 percent (a total of 400 employees), while the human services budget would take a $15.9 million hit, or 2 percent. "That’s a lot, but by no means is it devastating," Newsom said, noting that he restored some of the deepest cuts that were the subject of alarming public hearings. "I listened to the public comments at the Board of Supervisors… Things got a lot better than the headlines and the hearings."

The proposed budget includes 1,603 full-time-equivalent layoffs, or a 5.8 reduction in the city’s workforce, trimming more than $75.5 million from the general fund budget. In addition, the Department of Health and Human Services is cutting back its workweek to 37.5 hours to further trim costs.

"The smoke hasn’t cleared yet and there’s a lot of devastation in this budget that isn’t being talked about," Sup. John Avalos, who chairs the Board of Supervisors Budget Committee, said at the event. Newsom’s budget will be analyzed and then face its first committee hearing June 17, with approval by the full board required by July 31.

"The mayor told us a lot about what’s in the budget, but not a lot about what’s not in the budget, so we’ll spend a few days figuring that out," board President David Chiu told the Guardian.

The budget was aided greatly by more than $80 million in federal stimulus funds and other one-time revenue sources (such as $10 million from the sale of city-owned energy turbines) that were used to plug this year’s gap and offset cuts by the state and depressed tax revenue.

Although Newsom doesn’t want to raise taxes, licenses and fees would go up 41 percent, increasing revenue by $64 million to $220 million. Some of those proposed fee hikes range from the cost of parking in city-owned garages to admission fees for city-owned facilities such as the Strybing Arboretum. Muni riders will also see fares hiked to $2.

There will also be deep cuts to some key city functions. The Department of Emergency Management would take a 24 percent cut under the mayor’s plan, while the Department of Building Inspection faces a 20 percent cut to expenditures and a 29 percent reduction in staff.

The Planning Department would also take a hit of about 7 percent, with most of that focused on the department’s long-range planning functions, which were slashed by 19 percent to $4.7 million.

But it’s not an entirely austere budget. The police and fire departments have status quo budgets with no layoffs. Travel expenses would increase 13.5 percent to $2.9 million and the cost of food purchased by the city would rise 127 percent to $7 million.

The Mayor’s Office of Economic and Workforce Development — which often uses public funds to subsidize private sector projects — would get a 32 percent increase, to $24.7 million.

It’s unclear how much the Mayor’s Office has shared the budget pain. During the presentation, Newsom said his office’s budget has been cut by 28 percent, but he later clarified that was spread over the five years he has been mayor. Yet even that is tough to account for given that some functions have been shuffled to other departments.

The document shows a proposed 60 percent increase in the Mayor’s Office budget, although the lion’s share of that comes from the Mayor’s Office of Housing’s one-time financial support for some long-awaited projects, including rebuilding the Hunters View housing and support services project for low-income people connected to the Central YMCA, and an apartment project on 29th Avenue for people with disabilities.

Avalos has said he will look to find money by cutting some of the highly paid policy czars and communications specialists added to the Mayor’s Office in recent years, as well as Newsom’s cherished 311 call center and the Community Justice Court he created. Supervisors are also expected to resist Newsom’s penchant for privatization. Newsom proposed to privatize seven city functions, from jail health services and security guards and city-owned facilities, and to consolidate another 14 functions between various city departments.

Newsom pledged to work with supervisors who want to change the budget, continuing the rhetoric of cooperation that he opened the budget season with in January, which supervisors say hasn’t been matched by his actions or the secretive nature of this budget. "This budget is by no means done," Newsom said. "It’s an ongoing process."

In fact, Newsom warned that the budget news could be even worse than his budget outlines. Gov. Arnold Schwarzenegger is talking about new cuts that could total $175 million or more for San Francisco only, although Newsom only included $25 million of that in his budget because it went to the printer on May 22 and the total hit is still unclear. "So," Newsom said, "we’re by no means out of the woods."

Editor’s Notes

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› Tredmond@sfbg.com

The absolute most stunning statement of how messed up the state of California is emerged last week from the state director of finance, explaining why the proposed budget cuts fall so heavily on services for the poor. Let me quote directly from The New York Times:

"Government doesn’t provide services to rich people," Mike Genest, the state’s finance director, said on a conference call with reporters on Friday. "It doesn’t even really provide services to the middle class.

"You have to cut where the money is," he added.

Um … government doesn’t provide services to rich people? What about, say, the roads they drive on, and the airports they fly in and out of? What about the vast sums the state spends putting out fires that threaten wealthy enclaves in Southern California? What about the public education system, which trains workers for businesses? What about the entire criminal justice system, which exists to a significant extent to prevent poor people from taking rich people’s money?

Do you think Sergey Brin and Larry Page would have become Google billionaires if the Internet — developed and paid for by the government — didn’t exist?

No. Federal, state, and local governments all spend money on services for the rich. And by and large, those services don’t get cut when budgets are busted, and by and large, the rich don’t pay their fair share for the services they get — and by and large, nobody in politics talks about that when these nasty decisions get made.

It doesn’t have to be this way. Let’s just remember that as 900,000 kids lose their health insurance and California becomes, in the words of Mayor Gavin Newsom, the first state in the industrialized world to have no welfare system at all. It doesn’t have to be this way.

Cutting services for the poor, as opposed to cutting things rich people want and need, or making them pay a tiny bit more to keep society stable, is a political choice.

The American Federation of State, County, and Municipal Employees just put out a fascinating document looking at alternatives to the governor’s cuts — including a bunch of things that can be done without the two-thirds vote required to raise taxes. There are, for example, about $2.5 billion worth of useless and wasteful tax loopholes identified by AFSCME that could be closed (hurting the rich, helping the rest of us). That would save a lot of health and welfare programs.

San Francisco has choices, too. Downtown parking fees hit wealthier people; Muni fare hikes are a tax on the poor. A congestion management fee on downtown would overwhelmingly hit wealthier commuters; cuts in public health overwhelmingly hit the poor. The Tenderloin’s Community Justice Center hurts low-income people (and helps rich tourists and the hotels scare away the homeless).

The thing that kills me is that some of us have been saying over and over — for years and years — that the city needs to develop a better tax system (which will require a public vote) to minimize these cyclical crises. And some of us have been pointing out that a public power system would generate several hundred million a year (and that private power is sucking $600 million a year out of the local economy).

Do we have to keep blundering from disaster to disaster? For how long?

*

Newsom’s no-tax budget

1

By Tim Redmond

Steve Jones will be reporting in tomorrow’s paper about the details of Newsom’s budget proposal, and it’s going to take a few days to figure out exactly what’s in and what’s out of the budget, but the mayor has already made one point, and it’s infuriating:

He proudly announced that the budget is balanced with no borrowing and no new taxes.

Sounds like something that George W. Bush would have said.

And here’s the problem: When Newsom was negotiating the latest round of givebacks with the unions, he promised to work toward a revenue measure in November. And if he were serious about that, he could have included that projected revenue in this budget — avoiding some of the most painful cuts.

So what’s up? Is Newsom going back on the deal with SEIU — or is he just assuming that any revenue measure he puts on the ballot will fail?

Here’s what the mayor’s press secretary, Nathan Ballard, has to say:

After SEIU rejected the sensible deal that had been reached with the Mayor,
the revenue-measure talks unraveled, and so the Mayor could not in good
faith include projected revenue from a hypothetical measure in his proposed
budget.

All along we’ve said that a revenue measure would have to include support
from a broad coalition of San Franciscans, and nobody from the business
community — an essential part of any such coalition — is going to support
a revenue measure unless SEIU has already agreed to shoulder its fair share
of the city’s budget burden.

However, once SEIU votes to approve the new deal with the Mayor’s office,
it’s a whole new ball game. At that point we can convene a new series of
talks and attempt to come up with revenue measures that a broad coalition
can support. Once that happens, the budget could be adjusted accordingly.

Okay, sure — blame it on the SEIU members. But that’s not the point. First of all, it’s pretty likely the union membership will approve the latest contract offer, and Newsom knows that. More important, this isn’t about SEIU v. Newsom. It’s about the city, and the health of San Francisco and its residents. And a mayor who was serious about preserving essential services wouldn’t be waiting until the last minute, and planning to “adjust the budget” after front-line workers are laid off, programs are cut, nonprofits shut down etc. before he started talking seriously about new revenue sources.

And it all went down

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By Tim Redmond

It’s no surprise that all of the governor’s measures failedl. The Chronicle is already doing what the mainstream spin is going to be:

The defeat of the measures would put the state that’s already in financial abyss into a deeper hole, but the voter rejection would further confirm Californians’ disapproval of the way Gov. Arnold Schwarzenegger and the Legislature are handling the state’s fiscal crisis

And:

The opposition, made up mostly of anti-tax groups and some labor unions, raised about $5 million .

Part one is absolutely true — the governor and the Legislature together have a dismal approval rating, and that just confirms the fact that something major, structureal is going to have to change in California. What the voters don’t like is gridlock. So the question for next year is: Can the Democrats convince the electorate (and the voters in some swing districts) that things would be better off if one party was running the show and could actually get results? Because the only way this paralysis is going to change is if (a) GOP moderates have a resurgence — fat chace — or (b) the Democrats take over the governor’s office and a strong majority in the Legislature and the voters get rid of the two-thirds rule for passing a budget and raising taxes.

That’s a hell of a sales job and will need an Obama-size movement behind it. So far, none of the Democrats running for governor give me much hope.

The second part of the Chron’s analysis is just wrong.

Yes, the money came from anti-tax zealots and some unions, but this defeat is the result of both the left and the right finding the compromise unacceptable. There was as much opposition from people who thought the notion of a spending cap was disastrous for the state’s future as there was from people who don’t want higher taxes.

And while the Democratic leadership tried their best to sell a bad deal to their constituents, the defeat here belongs to the governor, who has become California’s version of George W. Bush.

Prison report: Why are we here?

7

By Just A Guy

Editors note: Just A Guy is an inmate in a California state prison. He writes on life behind bars and tries to explain to Californians what their taxes — huge amounts of their taxes — are paying for. He will attempt to answer all questions and comments, but it’s hard to communicate from a state prison, so it may take a while. His last post is here.

Hello everybody. I’m happy that many more people responded to my previous blog than I expected. I am glad that you were able to speak out a little on a more widely read forum. This seems to be working and maybe people will wake up to what’s really happening.

On to business.

So, Arnold is considering releasing many more inmates than the 8,000 initially proposed by his administration. I am not sure what the latest numbers are, I am hearing everything from 20,0000 to 38,000 potential releases. There’s even talk of selling San Quentin. Let’s all hope for the best, but let’s examine this a little deeper.

First, let me say this: I think it’s strange that Arnold is going to show the public two budget proposals, one if the propositions don’t pass and one for if they do. I strongly suspect the one for non-passage is going to be a scare tactic with which he threatens the mass release of prisoners into the public. Your neighborhoods will be overrun by all these horrible prisoners, so you’d better pass these propositions or the ex-cons will be next door to you come July!

Wow! I hope that’s not what it he says, but I think he will.

What about all these “hardened” criminals that shouldn’t be let out, or certainly not let out early? Let’s talk about them. What about all the lifers that get parole dates, but then the governor in his “Governor’s Review” denies the person his/her parole out of hand? What is the purpose of a parole board if the governor has the final say? Seems to be just more people (the parole board) supping at the trough of your tax money.

Shop local, City Hall!

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news@sfbg.com

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

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

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

Newsom said he didn’t have a clue.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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