taxes

The state budget deal

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By Tim Redmond

The state Legislature is scheduled to vote Friday on a budget deal that nobody likes.. I’m told that labor groups will urge Democratic legislators to oppose the deal; it’s not even clear that Republicans — whose leaders helped negotiate it — will vote for the proposal.

The GOP members still insist, for the most part, that they won’t accept new taxes, and this plan has $14.3 billion in new taxes, some of which are pretty good. It calls for a 12-cent increase in the gas tax, which is a great way to raise money and should be higher, and a slight increase in the car tax (ditto). I don’t like the 1-cent sales tax hike, and while I’m all for raising income taxes on the rich, a 2.5-percent across-the-board surtax isn’t even remotely fair (esp. since the higher earners, who tend to itemize deductions, will wind up deducting the higher tax from the federal income taxes, while the average person won’t get that benefit.) Still: at least some of the budget gap will be addressed with new revenues (which the mayor of San Francisco can’t seem to accept as a solution back home.)

The cuts are awful. The schools will get hammered . According to the Sacramento Bee

Welfare recipients and low-income disabled, blind and elderly individuals would not receive cost-of-living increases

which is awfully harsh.

And it goes downhill from there — among other things, the budget would eliminate state support for local transit systems, which is going to be a brutal hit for San Francisco.

So the more liberal Dems are going to get pressure to say no, and even the Republican leaders who worked on the deal won’t promise to vote for it. But as state Sen. Mark Leno told me:

“Given the nature of the $42 billion deficit, our budget resolution is by definition painful all around. And we have to move forward to get the state off life support.”

Bizarro Gavin’s alternate universe

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By Steven T. Jones

What kind of alternate universe does Mayor Gavin Newsom live in? Apparently, it’s one where you can write your own reality and ignore inconvenient fiscal and political realities.
The last example of Newsom’s tenuous connection to the real world is his announcement today of a “local economic stimulus package” that cuts the payroll and property taxes paid by the business community and offers local businesses $23 million in no-interest loans.

Why we’re broke

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By Tim Redmond

State Sen. Mark Leno explained to me a few days ago that, despite the GOP’s claim that California has “a spending problem,” when you actually look at how state spending has increased over the past 20 years, you get a very different picture. Actually, after accounting for inflation and population growth, state spending would have been relatively flat — save for the insane prison expansion and the governor’s car-tax cut.

There’s an interesting analysis of all this at Calitics, which looks at the Monterey Herald’s story on Where the Money Went. Bottom line: The state’s problem — as I keep saying — is that Californians want all kinds of services — good education, parks, roads, transportation systems and yes, sadly, prisons — but nobody wants to pay for them. It’s expensive to run the world’s eighth-largest economy, a state with more people than most countries and a wide range of social problems. And there is plenty of money floating around — even in this economy, California is a very wealthy state.

But as long as we aren’t willing to raise taxes on the wealthy and look at issues like Prop. 13, these budget problems aren’t going to go away.

Free the prisoners!

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By Steven T. Jones

For all the outrage and political posturing around federal judges ordering California to reduce the state’s prison population, this has been foreseeable for more than a decade and it’s something that our elected leaders should embrace as both humane and a partial solution to our budget woes.

The bottom line is our prisons are shamefully overcrowded, thanks largely to legislators pushing tough-on-crime and no-new-taxes measures for decades. But politicians from Gov. Arnold Schwarzenegger to Attorney General Jerry Brown have vowed to fight the order all the way to the U.S. Supreme Court.

“It seems like everyone’s on the same page with this as far as elected officials,” Ronn Owens said on KGO radio this morning, where Lt. Gov. (and gubernatorial candidate) John Garamendi sounded a little more reasonable than other politicians who have been tripping all over themselves to sound tough and indignant, lest someone call them soft on crime.

“We’ve known this is coming. This is not something new,” Garamendi said. “The problem is failed leadership.” He called for more creative incarceration solutions such as more conservation camps (not the best idea) and more aggressive efforts to lower recidivism rates (a better idea). But he shied away from more radical and effective solutions such as ending the war on drugs.

Brown, after taking a courageous stand in favor of judicial independence in December, should be ashamed of himself. Instead of beating his chest, he should be talking about the kinds of obvious solutions that he’s advocated in his previous iterations, such as ending the war on drugs, parole reform, and freeing most nonviolent offenders.

We can no longer afford to have some of the world’s highest incarceration rates and lowest tax rates, it’s just that simple.

Jess Brownell: Keynes & Friedman fight it out

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“John Maynard Keynes, he’s our man. He knows more dead than Alan Greenspan”

By Jess Brownell

In the January 28 edition of the New York Times there was a full-page advertisement paid for by the Cato Institute and signed by 203 economists (if I counted correctly; I’m not an economist myself) objecting to the following statement by President Obama: “There is no disagreement that we need action by our government, a recovery plan that will help to jumpstart the economy.”

The brief text above all those signatures advises the world that the signers do not in fact agree and deeply resent being lumped with those who do. No jumpstarting needed, in their opinion. Indeed, the so-called recession/depression seems to bother them very little. Less government and lower taxes will easily solve that problem, and psoriasis better look out, too.

Ken Garcia’s cuts

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By Tim Redmond

Okay, this is the sort of thing that really, really annoys me. Ken Garcia is against a June election, which is fine if he thinks no tax measures will pass and thus it’s a waste of money.

But then he says this:

The City doesn’t have a revenue problem, it has a spending problem. It spends wildly on public health programs and hospitals that most cities long ago curbed, and its health care costs and pension benefits spike around 25 percent each year.

So what the board must do, which it hasn’t to any formidable degree, is start cutting into the bloated bureaucracy our fearless leaders have created during the past 20 years, while the mayor tries to renegotiate labor contracts that always seem to sail through during election years.

And then cut. And then cut some more.

When people bloviate about bureacracy and cuts like this, I think they have a responsibility to tell us all, specifically, what they want to cut. It’s easy to talk about spending “wildly and public health programs,” but it’s another thing to say which programs, serving which people, ought to be eliminated.

I asked Garcia what his proposals were and he said he had no comment but would make some suggestions soon.

Frankly, this is horseshit. Half a billion dollars is a lot of money, and while I agree there’s waste at City Hall, there’s not anywhere near half a billion dollars worth of waste. If you don’t want to raise taxes, fine — tell us what you’ll cut instead. Or shut up.

Without a net

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› news@sfbg.com

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

The message was chilling.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Bad budget ideas

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

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

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

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

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

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

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

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

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

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

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

Editor’s Notes

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› Tredmond@sfbg.com

This is what happened in the office of the mayor of San Francisco last week:

1. One of the most highly respected members of the Newsom administration — quite possibly the only department head the mayor ever hired who has the unquestioned respect of every sector of the community she works with — was forced to resign, for reasons the mayor won’t explain. In fact, in a lame attempt at spin, the mayor’s press office put out a statement suggesting that Margaret Brodkin, who ran the Department of Children, Youth and Families, was leaving to take a new position.

Wrong, as Brodkin quickly (and predictably) pointed out in her own release, which hit my inbox at almost exactly the same time. Brodkin told the truth: the mayor, who has had nothing but praise for her in public, fired her, summarily.

2. Just a few weeks after vowing to begin a new era of mutual respect and a desire to work with the new Board of Supervisors, the mayor tried to override the board, quietly, and place his own unqualified ally on a key state commission.

The supervisors had voted 8-0 to nominate Sup. Ross Mirkarimi for a slot on the state Coastal Commission. That’s an important job: the commission regulates development all along the state’s coast, and the person who represents San Francisco, Marin, and Sonoma counties needs to be a strong and reliable environmentalist. Mirkarimi, a Green Party member, has devoted much of his life to environmental causes; his colleagues on the board agreed he was the best candidate to forward to the state Senate Rules Committee, which has the final say on appointments.

Without informing Mirkarimi or Board President David Chiu, Newsom tried to pull a fast move: he forwarded the name of Sup. Michela Alioto-Pier to Senate Rules, hoping, perhaps, that as a Democrat, Alioto-Pier might get the nod. There’s a good reason the supervisors didn’t nominate her — her record on environmental issues is awful, she’s way too friendly to developers, and the last time she had an outside job, as a delegate to the Golden Gate Bridge board, she missed half the meetings. But Newsom wouldn’t trust the board, and wanted his own candidate.

Which was not only wrong, but stupid: turns out state law gives the supervisors, not the mayor, the exclusive right to nominate Coastal Commission candidates. Newsom’s office didn’t even check the regulations, and by the end of the week, his spinmeisters were pretending that they’d never really forwarded her name in the first place.

3. The mayor came out strongly against a June special election to raise taxes to cover some of the half-billion-dollar deficit — but offered absolutely no alternative. That left the supervisors, city employees, the press, and the public wondering what exactly the mayor has in mind — 1,000 layoffs? 2,000? Major service cuts? — and when he’s going to tell us about it.

Oh, and while all of this was happening, Himself was out of town, hobnobbing with the hip swells at the World Economic Forum in Davos.

I don’t think I’m the only one who’s asking — what the fuck is going on in Newsom-land, anyway? *

Business community attacks tax proposals

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By Steven T. Jones

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

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

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

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

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

The shit we’re up against

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By Tim Redmond

Why is it so hard to get a budget deal out of Sacramento? While the gov blames the Legislature, let’s take a look at why it’s almost impossible to get Republican members of the state Assembly or Senate to vote for a tax hike.

Case study: Assembly Member Anthony Adams, R-Hesperia.

Adams emerged from a Republican caucus meeting a few days back to say that a budget deal would require both sides to give in on some hot-button issues. The Democrats would have to accept major cuts in popular programs — and the GOP would have to accept some tax increases.

He is now in serious political trouble.

Two popular right-wing L.A. radio nuts, John and Ken, put out a “call to battle stations”, lambasted Adams for 45 screeching minutes on the air, then put a graphic of the Assemblymember’s severed head on a stick on their website. Adams admits that voting for even modest tax hikes, as a part of a broader budget that includes massive spending cuts, will probably be the end of his political career.

“This,” Assembly member Tom Ammiano told me, “is the shit we’re up against.” The radical anti-tax crew in the GOP is preparing to trash, abuse, challenge and if necessary recall any Republican we dares talk of taxes. And since the Legislative districts in California are so successfully gerrymandered to give Democrats more power, the Republican seats are VERY Republican and these anti-tax nuts have a lot of power.

That’s why the two-thirds majority for approving a budget is crippling this state.

Budget woes show new political calculus

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By Rebecca Bowe

About 150 labor representatives and health-service providers turned out at last night’s Board of Supervisors meeting to sound off on drastic budget cuts that many said would weaken an already-strained safety net for populations who are most in need. For more than four hours, representatives from homeless-advocacy groups; clinics serving the uninsured, sex workers or other disenfranchised populations; youth organizations that strive to keep kids off the street; labor-union representatives; stressed-out hospital staffers and many others gave the board an earful. The overwhelming majority urged the Board of Supervisors to approve a special election for June 2, which would give voters an opportunity to decide whether to establish new taxes as a way of generating revenue, rather than relying solely on deep cuts to solve the city’s budget woes.

The city is facing a budgetary crisis of unprecedented scale, with a daunting $576 million deficit. When Mayor Gavin Newsom appeared before the supervisors last December to ask for their cooperation in tackling the budget shortfall, he described it as arguably the most daunting crisis the city has seen since the Great Depression. (Newsom was attending the World Economic Forum in Davos, Switzerland yesterday.)

While the members of the board put off the decision as to whether or not to actually hold a special election, they did pass a measure allowing for the option to stay open. With Supervisors Alioto-Pier, Chu and Elsbernd voting no, the board approved an emergency measure to waive regular election procedures that would have prevented the tax measure from being placed on a June 2 ballot.

Nor did the board vote on an amended budget package, which was introduced by Supervisor Chris Daly to counter Mayor Gavin Newsom’s mid-year budget cuts. Daly’s list of alternative cuts targeted management-level positions, mayoral communications staff and funding for the opera, ballet and symphony in an effort to free up funds that could then be diverted to sectors such as public health.

Instead of adopting Daly’s amended list of cuts, supervisors voted 6-5 on a motion — called by Supervisor Sean Elsbernd — to send the whole thing back to the Budget & Finance Committee for a closer look. “All of this needs to be analyzed,” Elsbernd said after questioning a few management-level cuts included in the list. “To push this forward today without total understanding of the impact of each and every one of these — and these are just the ones I’ve caught while sitting here! — God knows what else is in there. I’m just saying, let’s have this fully vetted.” Supervisors Alioto-Pier, Chiu, Chu, Dufty, Elsburnd and Maxwell supported the motion.

That left an interesting and somewhat mixed message about the politics of the new board. Supervisors Dufty and Maxwell, who will be the swing votes on anything that requires a supermajority (to override a mayoral veto) stayed with the progressives on the vote for a June election. But Chiu – elected board president entirely with progressive support – sided with the mayor’s allies and the moderates on the budget re-allocation vote.

We’ll have to see how this new calculus plays out in the next few weeks.

Editor’s Notes

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› tredmond@sfbg.com

Just about every progressive economist agrees that the federal bailout bill should include money to help state and local government. I agree. Forcing government to lay off public sector workers and cut services is the worst thing you can do in a recession.

But in a strange way, some sick, contrary part of me almost hopes the Obama administration doesn’t bail out California. Federal money would let us off easy. It would let us do what just about everyone in Sacramento desperately wants to do right now: figure out a way to get out of this mess for another year. Then we can all hope things will get better again.

But they won’t, is the thing. As the San Francisco Chronicle reported Jan. 25, the weak economy is leading to a lot of home sales, and a lot of those sales are at prices below the level of the property’s current tax assessment. So property tax revenue will be dropping this year – but they’ll stay low next year, and the year after, and the year after that. Because under Proposition 13, property taxes can’t go up by more than 2 percent a year. So even as the economy recovers and property values rise, those houses and commercial properties sold at bargain basement levels today will continue to enjoy nice tax cuts for the foreseeable future.

Meanwhile, the state already owes billions from previous one-time borrowing to cover previous one-time budget solutions. And since most of the money comes from taxes that are highly unstable and move with the economy (sales taxes, for example), the budget hole is going to get worse before it gets better.

This is no way to run the world’s eighth-largest economy.

And I keep thinking: could this finally be our chance to do something about it? Might things get so bad this year that people start asking about actual radical change?

And when I talk about radical change, I’m not talking about a tax here or there. I’m talking about somebody in the Legislature standing up and saying, if we were going to create from scratch a system to fund the state of California, what would it look like? And I can tell you, it would look nothing like the Winchester Mystery House of tax laws that we have today.

I won’t be the one called on to draft the blueprint for a new California revenue system, which is probably a good thing. But I can make a few observations and offer a few proposals that almost everyone with any sense agrees ought to be on the table.

First, California may be broke right now, but many of its residents are not. Generally speaking, the fairest types of taxes are income taxes, and the state doesn’t charge the people with very high earnings anywhere near enough. And since the rich don’t tend to suffer as much as the rest of us in recessions, that’s a fairly stable resource.

We don’t do enough to capture our share of the money companies make off California’s resources, either. This is an oil-producing state, yet we have no tax on oil at the wellhead; even Louisiana has that. And we don’t do nearly enough to charge consumers for the damage they do to the environment (the car tax being the most obvious example).

But beyond that, we tax goods and manufacturing, which is no longer the base of our economy, and let services go free. Some services are necessary and should be exempt (medical care, for example). But are the people who pay for, say, personal trainers or cosmetic surgery by and large better off financially than the rest of us? I suspect they are. Should they be taxed on what is by almost any standard a luxury service?

The point is, we need to stop looking at this as a one-time problem. This year’s deficit is the canary in the financial coal mine. Maybe instead of a ballot measure on one tax plan, we should have an election to reconsider Prop. 13, the tax code, and the entire way we finance the state. The system is about to collapse. Maybe we should start again, and get it right this time.

Editor’s Notes

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› tredmond@sfbg.com

I guess Mayor Gavin Newsom really wants to cut the budget. He wants to force city employees (and not just the cops) to accept pay cuts. He wants to lay people off and eliminate services. He wants to solve the budget crisis entirely on his terms — and honestly, it baffles me.

Anyone who runs a public or private enterprise has to make tough decisions and tough choices in tough times. I know that. I’ve had to cut spending and lay people off — and I can tell you, it sucked. It didn’t make me feel like a strong leader or a hard-nosed manager, it just made me sad.

In politics, I guess, there’s some advantage to looking like you can stand up to organized labor and the left. Maybe Newsom thinks he can run for governor as the mayor who refused to raise taxes during a budget crisis. Maybe he, like Gov. Arnold Schwarzenegger, thinks taxes are for girlie men.

But does he really want to preside over the decline of his own signature health care plan? Does he want to be mayor of a city that recovers more slowly from the recession? Does he want to be the environmental leader who cut public transportation funding?

He doesn’t have to do that. There’s another alternative. He can work with the supervisors — and labor, and business, and community activists — and look at ways to bring in some more money. It shouldn’t be that hard a sell, really. The budget gap is huge — Aaron Peskin, who served on the Board of Supervisors for eight years, said before he left office that he’s having a hard time even getting his mind around the monstrosity of the necessary cuts. I’ve been watching local politics for 25 years, and I’ve having a hard time too. We could be looking at eliminating half the discretionary spending in the general fund.

Do people who live and work in this city (including business owners) want to see public health cut by 25 percent? Do they want to see libraries closed, and neighborhood fire stations eliminated, and police stations shut down, and recreation programs that keep kids off the streets eliminated, and the Small Business Assistance Center defunded, and more mentally ill people wandering the streets, and longer waits for more crowded Muni buses? Is this the city we all want to live in?

Or are the wealthier residents and bigger businesses willing to pay just a little bit more each year to keep basic services in place?

If Mayor Newsom, who is still quite popular in town, asked that question, in that fashion, and presented budget cuts that everyone knows are necessary and better oversight and good government programs to let us all know that the money isn’t being wasted, and then promoted a couple of fair and progressive new revenue measures in a June special election, the worst of the bloodbath could be avoided.

I can’t understand why he wants this to be so hard.

The challenges for President Chiu

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EDITORIAL The ascension of Sup. David Chiu to the presidency of the Board of Supervisors gives a relative political newcomer considerable power. It also puts Chiu in position to carry on the legacy of Aaron Peskin and lead the opposition to Mayor Gavin Newsom’s pro-downtown, pro-Pacific Gas and Electric Co. agenda. Chiu, obviously, lacks the experience Peskin brought to the job, so he needs to move carefully at first. But he also needs to show that he’s more than a compromise candidate and that he has the ability to lead the board and promote the progressive agenda.

Let’s remember: Chiu was elected president entirely by the six progressive supervisors. The way the vote went down, five people, including Newsom’s closest allies, stuck together as a solid bloc and repeatedly voted for Sup. Sophie Maxwell. Maxwell had come down to the Guardian office a few days earlier to tell us that she was a solid progressive, but we saw the future of the board playing out when the votes were counted. Maxwell and Sup. Sean Elsbernd, who both have voiced concerns about the prospect of an inexperienced person taking the top job, could have broken with their bloc and voted for Sup. Ross Mirkarimi — that would have put him over the top. But through seven votes, as the progressives moved around trying to find a candidates all six could support, the Newsom Five stuck together. (Of course, if it hadn’t been for Sup. Chris Daly’s ill-conceived antics, Mirkarimi would have been able to get six votes, and we would have had an experienced leader in place).

Although Chiu talks (as he should) about bringing everyone together, he needs to keep in mind from day one that he is now the most visible member of a six-person board majority that can control the agenda and the set the tone for the city — if none of the six starts to drift toward the squishy center.

It’s going to be a rough, brutal year. The mayor has already made clear through his comments that he doesn’t even want to look at new revenue measures; he intends to solve the city’s half-billion-dollar budget crisis with cuts — deep, bloody cuts — alone. Chiu will have to stand up to him, publicly and privately, and make clear that a cuts-only budget isn’t going to fly in San Francisco.

And while Chiu will need some time to develop a leadership style and become familiar with the often-complex workings of the board, he should do a few things right away to show that he’s prepared to take on the difficult tasks ahead:

Support Peskin’s proposal for a special election in June. The proposal to allow the voters to consider raising taxes instead of just cutting is going to need a lot of help and support. The mayor opposes it, and some of his allies may oppose it too. But it’s absolutely crucial that San Francisco refuse to follow the lead of Gov. Arnold Schwarzenegger. It’s crucial that the progressives, while acknowledging that cuts will have to happen, also insist on looking at fair revenue ideas. Chiu needs to take the point on this.

In fact, now that the mayor and his allies on the board have made this a central battleground — and in effect have made this a litmus test for Chiu’s new presidency — it’s even more important that every one of the six progressive supervisors stands up to this challenge.

We’re not sure which of the dozen-odd tax proposals floating around is the right one. But it would be the worst kind of foolishness to take the whole idea off the table.

Put good people on the key committees. The Budget Committee at this point looks good, with Mirkarimi, Sup. John Avalos, and Elsbernd. When that panel expands to five members (and it should, soon) Chiu should make sure that either David Campos or Eric Mar joins the committee, keeping a progressive majority. The Land Use committee will be crucial as the Eastern Neighborhoods plan is implemented; Chiu needs to appoint a progressive chair and majority.

Save LAFCO. The Local Agency Formation Commission is the only board committee that has public power and energy policy as its primary agenda. Budget-cutters (spurred by PG&E, which more than any other company is responsible for the budget crisis) have made LAFCO a target; Chiu needs to make it clear immediately that LAFCO will remain in place, with strong appointments and a chair committed to making community choice aggregation work and pursuing public power as the largest potential new revenue source for the city.

Chiu has promised to work with the mayor, which is fine. But first he needs to show the progressives who elected him that he’s also ready to do battle.

Six aren’t enough

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› news@sfbg.com

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

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

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

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

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

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

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

 

POLITICS AND POLICY

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

THE BUDGET MESS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Offies 2008

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› tredmond@sfbg.com

Wow. What a year.

Sarah Palin ran for vice president. Joe the Plumber got his 15 minutes. Gavin Newsom made out with Sarah Silverman. Eliot Spitzer seemed to be the only one in New York with any money left to spend. Dana Rohrabacher dressed in drag to go to prison. And O.J. Simpson finally managed to get convicted of something…. It was a year for the ages. And it’s finally, finally over.

HEY, GIVE THE POOR WOMAN A BREAK — YOU CAN’T SEE FRANCE FROM ALASKA

Sarah Palin took a call from a Canadian radio comedian posing as French Prime Minister Nicholas Sarkozy and remained on the line, convinced she was talking to a foreign leader, for several minutes as the comedian told her his wife was hot in bed and that he loved the Hustler smut film Who’s Nailin’ Paylin?.

FROM ALASKA, YOU CAN SEE RUSSIA, AND RUSSIA’S COLD, AND IF IT ISN’T IT WOULD STILL LOOK COLD, SO WHAT’S THE BIG DEAL?

Palin said the "jury’s still out" on global warming and that even if the climate was changing, she didn’t know what was causing it.

KILLING YOUR WIFE IS NOTHING, BUT DON’T YOU DARE STEAL FOOTBALL CARDS

O.J. Simpson faced more than 30 years in jail for stealing some sports memorabilia he said belonged to him.

AND FOR A FEW WEEKS, THE ENTIRE STATE OF WORLD DISCOURSE GOT A LITTLE BIT SMARTER

Ann Coulter broke her jaw and had her mouth wired shut.

WHAT IS THE VALUE OF HUMAN LIFE COMPARED TO A $99 FLAT-SCREEN?

A temporary worker in a Long Island, N.Y., Wal-Mart died when bargain-crazy crowds smashed through the store’s front door.

AND HE STILL GOT MORE VOTES THAN MCCAIN

Absentee ballots in an upstate New York county listed "Barack Osama" as a presidential candidate.

SEE, IT ALL DEPENDS ON WHAT THE MEANING OF "YOU BETCHA" IS

The Alaska legislature concluded that Sarah Palin had violated ethics laws when she tried to have her ex brother-in-law fired from the state police. Palin immediately announced that she had been cleared of any wrongdoing.

AND THIS WAS THE GUY WHO RAN THE ECONOMY ALL THOSE YEARS?

Former Federal Reserve Chair Alan Greenspan admitted there was a "flaw" in his free-market approach to economic policy, but said he wasn’t sure exactly what went wrong.

GREAT MOMENTS IN PUBLIC POLICY

A Treasury Department spokesperson announced that the agency had set $700 billion as the amount for the financial bailout because "we just wanted to choose a really large number."

THEY SAVED VILLAGES THAT WAY IN VIETNAM, TOO, BUT YOU MANAGED TO DUCK THAT WAR, SO YOU WOULDN’T UNDERSTAND

George W. Bush addressed the massive federal bailout of the banking system by saying, "I’ve abandoned free-market principles to save the free-market system."

WHY THE RICH ARE DIFFERENT FROM YOU AND ME

John McCain admitted he didn’t know how many houses he owned.

PROOF POSITIVE OF THE VALUE OF A YALE EDUCATION

President Bush, addressing the state of the economy, announced that "if money isn’t loosened up, this sucker could go down."

WHOOPS, GUESS THAT ONE ISN’T WORKING OUT SO WELL, EH?

Levi Johnston, who impregnated Sarah Palin’s daughter, Bristol, described himself as a "fucking redneck" who didn’t want kids.

THE CASE FOR A FEDERAL BAILOUT, #422

P. Diddy announced that the economy and the cost of fuel had forced him to give up private jet travel.

ENTIRELY APPROPRIATE FOR A MAN WHO’S AN ASSHOLE

A book by Cliff Schecter reported that McCain had called his wife, Cindy, a "cunt."

WELL, THEY’RE A LOT MORE POLITE ABOUT THESE THINGS DOWN IN BRAZIL

A Brazilian former exotic dancer said she’d had an affair 50 years ago with John McCain, whom she called "my coconut desert."

BUT DON’T WORRY, HILLARY, BARACK LIKES YOU FINE

Samantha Power, an advisor to Obama, called Hillary Clinton "a monster."

THAT’S RIGHT — THE ONE WHO KICKED YOUR ASS. THAT ONE.

In a presidential debate, McCain referred to Obama as "that one."

SUCH HIGH PRAISE FROM SUCH A WONDERFUL MAN

Illinois Gov. Rod Blagojevich referred to Obama as "that motherfucker."

NATURALLY — SHE LIVES IN ALASKA, AND YOU CAN SEE ENERGY FROM THERE

McCain said that Palin "knows more about energy than probably anyone in the United States."

FORTUNATELY, HE NEVER GOT TO THE OVAL OFFICE, SO SOME OF US MAY ESCAPE CUSTODY

In a speech, McCain referred to Americans as "my fellow prisoners."

AS LONG AS THEY SIP IT SLOWLY, SO AS NOT TO BURN THEIR ITTY-BITTY MOUTHS

McCain proclaimed that "we should be able to deliver bottled hot water to dehydrated babies."

NEVER MIND GRAN TORINO, THE WRESTLER, AND MILK — THE OSCAR GOES TO . . .

A TV station in Germany reported that the East German secret police had made private porno movies in the early 1980s with titles like Private Werner’s Big Surprise and Fucking for the Fatherland.

WHERE IS PRIVATE WERNER WHEN YOU NEED HIM?

Eliot Spitzer, the crusading governor of New York, had to resign after a federal sting operation found he had spent more than $80,000 on high-end prostitutes from the Emperor’s Club. On an FBI wiretap, a prostitute named Kristen, after an assignation with Spitzer, told her boss she’d heard that the governor would "ask you do to do things that, like, you might not think were safe" but that "I have a way of dealing with that. I’d be like, listen dude, do you really want the sex?"

NOTHING WRONG WITH THIS PICTURE, YOU BETCHA

Palin gave a speech on the economy while TV cameras captured a farmer beheading turkeys and draining the blood from their carcasses.

ANOTHER HERO FROM MCCAIN’S STRAIGHT TALK EXPRESS

Joseph Wurzelbacher rose to fame as Joe the Plumber after he confronted Obama and said that the Democrat would force him to pay higher taxes. It later turned out that Joe wasn’t a licensed plumber, owed $1,182 in back taxes, and didn’t make anywhere near enough money to be affected by Obama’s tax plans.

CROSS DRESSING, GRASSY KNOLL VARIETY

Rep. Dana Rohrabacher (R., Orange County) dressed in drag and pretended to be a human-rights worker named "Diana" to sneak into a state prison and badger Sirhan Sirhan, whom the congressman believed was part of a vast Arab conspiracy to kill Robert Kennedy.

IT’S FINE TO BLAST THE QUEERS, JUST DON’T GO BADMOUTHING AMERICA

Barack Obama, who was stung by criticism that his former pastor criticized America, chose for his inaugural convocation a pastor who says homosexuality is a sin.

LET’S SEE. 90,000 CIVILIAN DEATHS, THE RISE OF AL QAEDA, WATER, FUEL, AND ELECTRICITY SHORTAGES, GANGS OF ARMED THUGS IN THE STREETS … CAN’T IMAGINE WHAT THIS DUDE WAS UPSET ABOUT

An Iraqi journalist who threw two shoes at Bush was beaten badly by security guards; Bush later said he "didn’t know what the guy’s beef was."

WHY HE WOULD COVER UP THAT BEAUTIFUL HAIR, WE’LL NEVER KNOW

Mayor Gavin Newsom wore a cowboy hat and rode a horse for a photo shoot at his wedding.

PERHAPS MS. SILVERMAN CAN GET HIM TO PUT HIS HANDS AROUND THE CITY BUDGET, TOO

Newsom groped comedian Sarah Silverman on stage at a Democratic National Convention party after she said she wanted to "sexually discipline" him.

FIRE IN THE HOLE

An unknown arsonist with an unknown motive set more than half a dozen portable toilets on fire in San Francisco.

THIS, FROM A MAN WHO WROTE THE BOOK ON POLITICAL SLEAZE IN CALIFORNIA

Former Mayor Willie Brown complained about progressives using techniques from "Tammany Hall or Richard Daly’s Chicago" to take over the local Democratic Party.

HEY, SOMEBODY’S GOT TO CHANNEL MR. MAGOO

Witnesses reported seeing Carole Migden talking on her cell phone and reading while rapidly changing lanes at 80 mph on the freeway shortly before she crashed into another car. One caller to the state police asked officers to "please get out here, she’s scary."

NOW THAT WE KNOW WHO’S REALLY IN CHARGE AT CITY HALL, WE CAN STOP WASTING OUR TIME WITH THE ELECTED OFFICIALS

Newsom’s press secretary said that reporters wondering about the mayor’s position on public power should ask Pacific Gas and Electric Co. consultant Eric Jaye.

MY GOD, YOU WOULDN’T WANT ANY HUNGRY PEOPLE TO ACTUALLY EAT THE MAYOR’S FOOD

Newsom spent more than $50,000 in city money protecting his slow-food victory garden near City Hall from homeless people.

I’M HAPPY TO WORK WITH YOU, AS LONG AS I DON’T HAVE TO TELL YOU ANYTHING AND YOU DON’T ASK ANY QUESTIONS

Newsom appeared before the Board of Supervisors to discuss his budget cuts, but didn’t actually hand out the budget proposal. Press aides handled that job two hours later.

SINCE THAT APPROACH HAS WORKED SO WELL WITH RAPE VICTIMS

Sam Singer, a $400-per-hour flak for the San Francisco Zoo, sought to blame the victims of a tiger attack by saying that they were drunk and asking for it.

WE’LL GET THOSE BUGGERS — AND THEIR LITTLE DOGS, TOO

California officials threatened to bombard the Bay Area by spraying hazardous moth pheromones from helicopters to eradicate an agricultural pest that has probably been around for decades and will almost certainly survive the assault anyway.

YOUR RATEPAYER DOLLARS AT WORK

PG&E spent $10 million to fight a public power proposal.

THE CROWDS CHEERED A DRAMATIC EVENT AS THE OLYMPIC SPIRIT OF INTERNATIONAL COOPERATION CAME TO ONE OF THE WORLD’S GREAT CITIES . . . OH WAIT, THAT MUST HAVE BEEN SOMEWHERE ELSE

Newsom decided to avoid protests by keeping the route of the Olympic torch relay secret.

ANOTHER SIGN OF POLITICAL BRILLIANCE FROM THE MAN WHO WOULD BE GOVERNOR

Newsom tried to mess with the supervisors by having voters support his Community Justice Center, which the voters then rejected.

WHEN THERE ARE NO PROBLEMS LEFT FOR THE WORLD’S GREAT RELIGIONS TO SPEND MONEY ON

The San Francisco Catholic archbishop helped convince Mormon leaders to join him in pouring millions of dollars into defeating same-sex marriage.

Republicans are stupid

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By Steven T. Jones

Forgive the blunt headline, but it seems to me an inescapable conclusion based on the ridiculousness going on right now in Sacramento. Since writing about Republican legislators’ illogically doctrinaire opposition to taxes in this week’s paper, I’ve now watched the Democrats come up with a dishonest yet effective way around the blockade.

Even Gov. Arnold Schwarzenegger agreed with the legally dubious tax gambit, noting that desperate times require desperate measures. But then he vetoed the bill, criticizing Democrats for not making deep enough spending cuts in social services that people need most during hard times. This is the guy who keeps saying we face “fiscal Armageddon” if we don’t act immediately (and his best shot doesn’t take effect for another month and a half). And then, he has the balls to summon back the legislators, who had already stretched in barely legal ways to work around the Republican temper tantrum.

Let me say it again: Republicans are stupid, and California is about to start paying a heavy price for that stupidity.

Conservatism’s last stand?

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As Tom Ammiano moved from the San Francisco Board of Supervisors to the California Assembly at the start of the month, he went from the budgetary frying pan right into fiscal fire, a place where the Republican Party’s "no new taxes" pledge has finally turned the political heat up to an unbearable level.

"I think the state’s road is very, very difficult, and the city’s road is very difficult," Ammiano told the Guardian. "There is a failure of leadership on [Gov.] Arnold [Schwarzenegger’s] part. I’m not giving [Mayor Gavin] Newsom an A+, but he at least came to the board."

The difference lies with the anti-tax pledge by the influential right-wing group Americans for Tax Reform that all Republican legislators have signed. Combined with the requirement for two-thirds of the Legislature to approve state budgets, the pledge has made it impossible to close a state budget deficit pegged at $40 billion over the next 18 months, a gap that could shut down state government by March.

"No matter how nice the Republican next to me is, or how gay friendly, they’re doctrinaire and they have everyone by the cojones," Ammiano said.

Senator Mark Leno says now is the time for Democrats to aggressively fight back against an inflexible anti-tax stand that has eroded critical government services for a generation and has now finally reached a crisis point. The conservative crusade has been led largely by ATR head Grover Norquist, who once famously said he wants to shrink government to the level where he can drown it in the bathtub.

"Every Republican has signed a pledge to someone who wants to drown government in a bathtub — Grover Norquist. So nothing will happen until we rip up those pledges," Leno told me, noting that the two-thirds vote margin is just three Republicans each in the Assembly and Senate. "Six human beings are bringing us to our knees."

Even the conservative editorial page writers of the San Francisco Examiner (who endorsed John McCain for president) on Dec. 15 wrote, "the deficit has become so overpowering that — hate it all we want — California cannot continue functioning in 2009 without at least temporary tax raises."

Yet Norquist and the Republican legislators in his thrall haven’t softened their position one bit and instead hope to win deep cuts with this game of brinksmanship. "Now it’s up to the governor to come up with a budget that doesn’t borrow money and doesn’t raise taxes," Norquist told the Guardian.

He said the problem is that California hasn’t adopted a system of making a searchable, detailed list of all government expenditures available to the public, as they have in states like Texas, Missouri, Kansas, Oklahoma, and Alaska.

"Ralph Nader and I have joined in sending three letters to your governor asking them to go transparent," he told us. "To say you’ve cut the budget as much as possible without having 30 million Californians help look at what makes sense and how to cut the budget is not serious. There’s not been a serious effort in California to scrub the budget, period."

Norquist did not return Guardian calls with follow-up questions about the fact that few credible government watchers think the budget gap can be closed with cuts alone or whether the current standoff — which even Schwarzenegger blamed on legislative Republicans — could hasten the demise of conservatism. But for now, conservatives are standing firm.

Senate Republican leader Dave Cogdill put out a statement saying, "Raising taxes doesn’t solve the underlying problem of California’s budget, which is the state spends more than it takes in." His statement may not be true — after all, raising taxes does indeed address that problem — but his caucus is sticking to it for now.

"Republicans remain strong against tax increases and that’s particularly important now when the nation is facing a recession," Sabrina Demayo Lockhart, press secretary for the Senate Republican Caucus, told the Guardian.

Leno called the tax pledge "childish and irresponsible," and akin to Democrats saying they won’t consider any spending cuts. "What kind of honest negotiations can there be when they’ve signed that pledge?" Leno said.

Lockhart countered that, "we’re bargaining in good faith for California taxpayers." Asked about the potentially devastating impact to the economy of shutting down all state spending and projects, Lockhart denied the Republicans were being irresponsible: "The responsible thing to do is project California taxpayers and jobs."

The Legislative Analyst’s Office last year put out a report entitled California’s Tax System: A Primer in which it wrote "California’s tax burden is about average," and in fact less than the industrial states’ average of under $12 for every $100 of personal income. And US tax rates are about 15 percent less than those in the European Union.

Leno has reached out to business leaders to have them try to talk some sense into the Republicans. Ironically, despite the Republicans rationalizing their pledge in the name of not wanting to hurt economic growth, the collapse of the bond market combined with the budget impasse threatens to cut off all state spending and send the already weakened economy into a nose dive.

"I wouldn’t think that anyone with a business mind or business concerns would in any way support the status quo right now," Leno said.

Leno said that even the Chambers of Commerce in San Francisco and Los Angeles are advocating for a reinstatement of the vehicle license fee, something that Schwarzenegger has voiced openness to even though his crusade against it helped sweep him into office five years ago. LAO figures show the lack of a VLF, by the end of the current fiscal year, will have cost the state $43.3 billion since it was repealed.

Leno said the Democrats are planning ballot measures for next year to raise revenue and repeal the two-thirds budget vote requirement, which only California, Rhode Island, and Arkansas have. As the state’s budget crisis devastates state services as well as those at county and city levels, Leno hopes this will be Norquist’s final stand.

"No one expects we can make $40 billion in cuts," said Leno, who hopes that the situation illustrates the intellectual bankruptcy of the right-wing stance.

"We do know there’s opportunity in crisis," Leno said. "It’s getting really ugly now and everybody knows it."

Beyond the bloody cuts

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EDITORIAL There’s actually a bright side to the brutally depressing budget struggles in San Francisco and Sacramento. This could be the year Californians finally start to recognize that they can’t have a functioning state, with the services everyone wants, without paying taxes. It could be the end of the Republican lie that the budget problem is only on the spending side, the end of the famous no-new-taxes pledge — and the end to the requirement that two-thirds of the Legislature pass any budget, an archaic rule that is crippling California.

And with a little leadership from the new supervisors at City Hall, this could be the year San Francisco takes a serious look at how local government is financed.

This is no time for modest, cautious proposals. The budget situation is alarming. California is looking at $40 billion in cuts over the next 18 months — more than a third of the entire state budget. San Francisco is looking at $500 million in red ink — roughly half the discretionary spending from the general fund. Filling those holes with cuts alone would be devastating.

This isn’t your average budget battle, where everyone fights to save a few hundred thousand dollars here and a million there for a crucial program. This is, by all accounts, something of an order that the state and local government haven’t seen since the 1930s.

So small-time, piecemeal fixes aren’t going to work. Here’s what the state and the city need to be talking about.

AT THE STATE LEGISLATURE


The first thing that has to go is the two-thirds rule. It’s become almost a farce — a handful of Republicans, who have sworn never to raise taxes under any circumstances, are holding the world’s sixth-largest economy and a state of more than 37 million people hostage to their failed ideology. Enough talk: the Democrats need to mount a massive signature drive for a special election this summer to repeal that requirement.

There are many fair ways to raise taxes to bring in enough revenue to stave off devastating cuts. Raising the income tax levels on the highest wage earners makes the most sense. Gas prices are way down; raising the state gas tax by a few cents a gallon won’t bring prices even close to last summer’s level. We’re nervous about taxing services (medical care, for example, is a "service"), but a carefully crafted tax that exempts essentials ought to be on the table. California is the only oil-producing state that doesn’t tax oil at the wellhead; that’s a no-brainer. So is restoring the vehicle license fee; Gov. Schwarzenegger’s decision to eliminate that fee has cost the state $40 billion over the past five years.

AT CITY HALL


Step one: the mayor has to recognize that there’s no way to solve a half-billion dollar shortfall with cuts alone. Step two: the mayor needs to back off from the layoffs and cuts for a few weeks until the supervisors and the community stakeholders have a chance to meet, talk, and look at all the options. Step three: some far-reaching changes have to be on the agenda, right now.

We like the idea of a city income tax. Technically, under state law, all the city can do is tax income earned within local borders, meaning that commuters would pay (good) and San Franciscans who work out of town would escape payment (bad). But overall, the concept is better than anything else out there. A local income tax that exempts, say, the first $50,000 (assuring that lower-income people pay nothing) with progressive rates skewed toward charging very high wage-earners the most could bring in significant revenue in the fairest way possible.

We’d like to see a progressive business tax — raise the rates on the biggest companies. We could live with a short-term hike in the local sales tax; frankly, we could live with most short-term revenue increases. The supervisors need to look at what new taxes make the most sense and prepare for a special election in the spring to put a revenue package before the voters. And everyone — including the mayor — needs to campaign hard for it.

The city also needs to look at the rainy-day fund, money set aside for bad economic times. Only a small amount of the close to $100 million now in that fund is available in any one year, but that rule might have to be changed.

This crisis is an opportunity — a chance to examine how the city’s current revenue sources are unfair, unstable, and unwieldy. Why are business taxes flat (big corporations and small businesses pay the same rate)? Why does San Francisco rely so much on property and transfer taxes, which shift radically with economic ups and downs? And of course, a public power system would generate enough money to cover a huge part of the deficit. The supervisors need to find an immediate revenue-based solution, but should also start creating a serious task force to overhaul the entire revenue side of the budget. Today.

Republicans attack education

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By Tim Redmond

The GOP proposal to cut $10 billion out of K-12 education is unconscionable and the Democrats who control the Legislature will never go for it. And the state’s getting sued over low school funding already. But the proposal just shows how bankrupt the GOP ideas are as California struggles with a horrible budget crisis.

First of all, California’s schools are so big, and have so many contracts, that it’s hard to imagine how anyone could simply whack 20 percent of all spending in one year. Even if you wanted to cut spending that much, it would take a couple of years to phase those cuts in (unless you’re interested in wholesale dismantling of public education).

But here’s the nut: Even after destroying the schools, the GOP would still come up radically short in closing the state’s budget gap. The Republican plan covers $22 billion. The deficit is about $40 billion. What about the rest of the money? No answer except “no new taxes.”

Not the the Democrats or the governor are doing a whole lot better, but at least they’re part of the reality-based community. This is going to take a radical combination of cuts and tax increases. Period.

Or perhaps we should simply cut off all state payments to the Legislative districts that have sent no-tax Republicans to Sacramento. No schools, no road repairs, no housing money … nothing for the people who don’t want to pay for it.

Republicans make one last stand to drown government

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By Steven T. Jones

Democrats in the California Legislature say they’re ready to take the gloves off and start aggressively attacking the longstanding “no new taxes” pledge that their Republican colleagues signed with American for Tax Reform, which threatens to shut down the deficit-plagued state government.
“Every Republican has signed a pledge to someone who wants to drown government in a bathtub, Grover Norquist. So nothing will happen until we rip up those pledges,” Sen. Mark Leno told me, noting the devastating combination of that pledge and the two-thirds vote requirement to pass a budget in California, which only two other states have. That margin is just three Republicans in each the Assembly and Senate. “Six human beings are bringing us to our knees.”
“No matter how nice the Republican next to me is, or how gay friendly, they’re doctrinaire and they have everyone by the cojones,” Assembly member Tom Ammiano told me.
Senate Republican leader Dave Cogdill yesterday put out a statement saying, “Raising taxes doesn’t solve the underlying problem of California’s budget, which is the state spends more than it takes in.” I’m awaiting return calls from both Cogdill’s office and the ATR, but Cogdill’s statement is simply untrue on its face. Raising taxes does indeed address the problem of the state spending more than it takes in.

Breaking ground

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› steve@sfbg.com

The long-awaited process of rebuilding the Transbay Terminal formally begins Dec. 10 with a groundbreaking ceremony led by Mayor Gavin Newsom. But the agency pushing the project is still a long way from finding the money to build the project’s voter-mandated centerpiece: a high-speed rail and Caltrain station.

Even as the Transbay Joint Powers Authority embarks on the fully funded, $1.2 billion first phase of the project — which includes building a temporary bus station, demolishing the current building, and rebuilding the 1 million-square-foot transit hub by 2014 — the agency still hasn’t included the crucial $300 million "train box" in its plans.

Transportation planners say the train box, which is essentially the shell structure in which the train station would be built during the project’s second phase, is very important both logistically and financially (doing it later could be very expensive and disruptive to the station’s operation), particularly since the TJPA has secured little of the $3 billion needed for phase two.

"It would be a misuse of taxpayer money not to build the train box now," Dave Snyder, transportation policy director for the San Francisco Planning and Urban Research Association, told the Guardian. "The most urgent thing now is to make sure the train box is built as part of phase one."

"We are working hard to identify the funding for the train box in phase one," TJPA executive director Maria Ayerdi-Kaplan told the Guardian. "It’s more expensive to build it later."

But that source must be found by spring to be included in construction contracts.

Critics have questioned whether the trains will ever arrive at Transbay Terminal’s downtown location, and those doubts grew in recent weeks after Judge Quentin Kopp, the California High Speed Rail Authority chair, publicly suggested that the existing Caltrain station at Fourth and Townsend streets would be a fine high-speed rail terminus and that tunneling the final 1.4 miles to Transbay might not be worth the money (see "High speed derailment?", SFBG Politics blog, 11/18/08).

Kopp’s comments were prompted by premature TJPA efforts to secure funding guarantees from the $10 billion in high-speed rail bond money approved by voters Nov. 4 and by his concerns about how the project is being managed by Ayerdi-Kaplan and the high-priced public relations firm she relies on, Singer & Associates.

That rift, its lingering aftermath, and the failure of the TJPA to identify funding for Transbay Terminal’s rail components have rattled those who see the project as the linchpin for the region’s transportation system.

"I don’t think it works with the rail terminal at the current Caltrain station at Fourth and Townsend," Snyder said. "The access to downtown just isn’t good enough. The trains have to come downtown."

The Transbay Terminal was built in 1939 as the truly multimodal facility that supporters want it to become again. It received both buses and the commuter trains that traveled along the lower deck of the Bay Bridge until the bridge was converted to handle cars alone in 1959. At its peak at the end of World War II, 26 million passengers used the station annually, but those numbers dropped off precipitously as private automobile use increased.

The neighborhood around the terminal at First and Mission streets deteriorated and became a redevelopment district full of dormant public land, which the state turned over to facilitate development activity that includes the terminal rebuild (with a rooftop park), a neighborhood of 2,600 new homes (35 percent of which are required to be affordable), and a series of towering office buildings (including the tallest one on the West Coast).

Land sales expected to total $429 million are the single biggest funding source for phase one of the Transbay Terminal project, with the rest coming from state and federal funds, participating transit agencies such as AC Transit, a loan that will be repaid by increased property taxes, and increases in the sales tax and bridge tolls that were dedicated to the project by past ballot measures.

The prospects of bringing trains into the terminal seemed to rely on the high-speed rail project, which Kopp instigated as a legislator in the mid-’90s. Since then, the project has been studied and certified, with its documents explicitly spelling out how trains will travel from Transbay Terminal to Los Angeles Union Station in about two hours and 38 minutes.

After years of delays in bringing the $9.9 billion high-speed rail bond measure to the ballot, Proposition 1A was narrowly approved by voters Nov. 4. The TJPA immediately asked CHSRA for priority funding and was rebuffed by Kopp, who on Nov. 13 wrote, "Please do not attempt to secure California High Speed Rail Project funds to defray the enormous cost of the 1.4 mile ‘downtown rail extension.’ Such effort will not be welcomed by me."

In comments to both the Guardian and the San Francisco Chronicle, Kopp raised questions about wasteful spending at TJPA, the leadership of Ayerdi-Kaplan (who has met with Kopp and CHSRA director Mehdi Morshed just once), and the TJPA’s use of Singer and Associates, whose multiyear contract of up to $900,000 calls for paying the TJPA’s main contact, Adam Alberti, $350 per hour. "We don’t have a PR person deflecting media inquiries," Kopp said of his agency.

Ayerdi-Kaplan, who had little transit or executive experience before being appointed to the post at the urging of then–mayor Willie Brown, met with the Guardian editorial board last week and glossed over her past inaccessibility and conflicts with Kopp, saying the project is on track, she’s engaged with it, and she’s confident of its success.

"We have raised over $2 billion for the project and have a fully funded phase one. We’re still working on identifying the funding for the rail," Ayerdi-Kaplan said. TJPA has developed a list of possible funding sources, the biggest item being $600 million from the CHSRA.

She admitted that she hasn’t personally tried to contact Kopp about the funding request or worked to develop a good relationship with him or his agency, both of which Kopp has criticized. "At some point, we are going to sit down and talk," Ayerdi-Kaplan said.

She said there’s strong public support for the project. "We take a very positive approach," she told us. "You have to believe in what you’re working on, you have to believe it’s going to happen — as anything in life: you have believe your relationships are going to work, that your business is going to work, that your project is going to happen — or you have no business doing it," she said. Ayerdi-Kaplan said the project is fully certified and just waiting for funding, which should make it attractive to increased infrastructure spending proposed by President-elect Barack Obama. "There’s a lot of things that are in the works immediately with his economic stimulus package," she said.

Alberti said he has reached out to Morshed and received assurances that the CHSRA is still planning to use Transbay Terminal, something Morshed also confirmed for the Guardian — but with some hedging.

"Transbay Terminal is our terminal station in San Francisco as of now, based on our environmental documents," Morshed told the Guardian. Yet he said the authority is beginning more project-specific environmental studies, "and part of the requirements of environmental analysis is we need to look at all options."

Kopp said it’s unlikely that the Transbay Terminal — or any other project — will get a commitment for bond money soon: "We’re not going to be spending money or making funding commitments for years."

Editor’s Notes

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› Tredmond@sfbg.com

Muni is heading for a hiring freeze and delaying system improvements at the same time that Mayor Gavin Newsom says this is "not a time to raise fees and taxes on business." The head of the California High-Speed Rail Authority is fighting with the head of the Transbay Terminal project over money to extend train tracks downtown. The United States of America is bailing out car companies that have been fighting for years against tougher emissions standards and still can’t seem to make fuel-efficient vehicles. And we’re all worried about global warming and a deepening recession.

I’m not getting this.

Historians and economists can argue forever about the causes of the Great Depression, but most people agree about what brought it to an end: massive, over-the-top levels of public spending. Huge investments in infrastructure. Huge investments in employment programs.

Tax cuts didn’t end the Depression. Government layoffs and belt-tightening didn’t end the Depression. Under President Roosevelt, the government taxed and spent, borrowed and spent — and spent and spent and spent — starting with the New Deal and continuing through the gigantic reindustrialization of America known as World War II. And money went into things that actually created jobs — in many cases, public-sector jobs.

So now we’re in a period where San Francisco, California, and the nation desperately need new infrastructure . We need to shift, fairly radically, away from a car-based transportation system to one based on energy-efficient transit, particularly trains. We need to profoundly shift the electricity grid, away from nuclear and fossil fuels (and away from private control). All these things create jobs. It’s kind of a no-brainer.

California just approved $9.9 billion in bonds for a high-speed rail system between San Francisco and Los Angeles. But even that money isn’t going to be enough, and progress is going to be slow. Take 1/10th of the $800 billion the federal government is putting into propping up big banks and spend it on an emergency plan to build high-speed rail all the way from Seattle to San Diego, and imagine how many jobs that would produce. Jobs for planners, engineers, accountants, office-support people, steel fabrication, construction work, heavy equipment operators … jobs for college grads, jobs for high school grads, union jobs, steady jobs, jobs that train people for other jobs –tens of thousands of them.

Take another 10 percent of that and spend it building solar panels on every public building on the West Coast. Again: jobs of every sort, at every level. Mandate that all the work gets done in America, and you’ll develop an entire new industry or two (we don’t build trains in this country much, but we could, and we already have auto workers and factories that are about to be idled).

I hear some talk about this from the Obama administration, but I also hear some caution and some discussion about budget deficits and keeping the financial sector happy. Fact: the financial sector will be happy when a few million more people are working and spending money. That’s where the economy starts.

I just watched all 34 minutes of the economic segment of Newsom’s state-of-the-city YouTube extravaganza. In and around the rhetoric, he devoted a few moments to the city’s budget deficit and how he was going to institute a hiring freeze, lay off workers and consolidate departments. All wrong.

In fact, this is an excellent time to raise taxes and fees — on the rich, the well-off commuters, the big businesses, the billionaires … Shifting wealth from the top to the bottom, creating public sector jobs in the process, is an fine recipe for economic stimulus. At every level of government.

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