taxes Archives — Page 7 of 43 — San Francisco Bay Guardian Archive 1966

Willie Brown and Ammiano’s pot bill

Zelda Bronstein

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March 26, 2013

Assemblymember Tom Ammiano’s new medical marijuana bill seems pretty straightforward. Almost everyone in the medpot biz thinks there ought to be some sort of statewide regulations for a growing industry that operates in a mish-mash of local jurisdictions with no overall rules. If nothing else, consumer-protection policies ought to be in place. And, of course, the more the dispensaries accept, and follow, reasonable regs, the easier it is to win the mainstream political support necessary to get the feds off all of our backs and ultimately follow Colorado and Washington.

All good, right?

So Ammiano, who has been on this issue for years, is proposing that the state’s Department of Alcoholic Beverage Control — which for all its problems has experience regulating mind-altering substances — draft and oversee medpot rules.

But the industry that makes a lot of money off the legalization of medicinal weed is famously fractured — and the politics of Sacramento are often nasty. Add in former San Francisco Mayor Willie Brown — who has his fingers in all sorts of business opportunities these days — and the story turns downright weird.
Ammiano’s been talking about Califonria and pot for years. He proposed legalization before the other states did, but frankly, this current state Legislature’s never going to have that kind of courage.

But he continues on with the effort. Last year, he tried to put pot under the Department of Consumer Affairs, which clearly didn’t want it; his bill died in the state Senate.

Normally, when new regulations are proposed for an industry, the Legislature holds what’s called a Sunrise Hearing, to bring all the stakeholders into a room and talk about what issues ought to be addressed. So Ammiano a few months back asked for a hearing in the Senate Business, Professions, and Economic Development Committee. No problem, said the chair, Curren Price, a Los Angeles Democrat.

But in February, five days before the hearing was set, Curran called the whole thing off. Turns out that the Governor’s Office and the Attorney General’s Office wanted no part of it, so it was hard to round up the essential players. Also, Curran was running for an open LA City Council seat and probably didn’t want the publicity. As Ammiano said at the time, “What’s up with marijuana? You can’t even have a hearing?”

Even without a hearing, he’s moving a new bill, AB 473, which would create under ABC a Division of Medical Cannabis Regulation and Enforcement. The bill is modeled on a successful effort in Colorado that has kept the feds at bay. Washington is also putting marijuana regulation under its liquor control authority.
“We’ve had not one federal intervention,” in Colorado, Matt Cook, a consultant who help write the rules in that state, said.

But just as Ammiano was preparing to line up support for his measure, another bill mysteriously appeared, in the state Senate. A “spot bill” with no actual content, the measure was set as a medical marijuana regulation placeholder. The authors: Senate President Darrell Steinberg and San Francisco’s Mark Leno.

Now: Leno’s been a big supporter of medical pot for years — but the bill wasn’t his idea. “Darrell told me he was going to do something about marijuana regulations, and he asked me if I would join him,” Leno told us.

What Leno didn’t know: Steinberg had been approached and asked to carry a bill by Willie Brown. Brown contacted the Senate president, sources tell us, and said that Ammiano was the wrong person to carry pot legislation.

Why? Who knows. Brown wouldn’t return my calls. But I can tell you with absolute certainty that Brown has been looking for ways to discredit Ammiano since 1999, when the then-supervisor challenged the mayor’s re-election in a legendary write-in campaign that galvanized the city’s left and created the momentum for the complete rejection of Brown’s politics and endorsed candidates a year later, in the first district elections.

And yes: Willie Brown carries a grudge. So it’s possible that he would go out of his way to make sure that Ammiano didn’t get credit for leading the way on what will evenutally be a huge sea chance in how California handles pot.

Now: This sort of thing isn’t viewed very highly in the hallowed halls of the state Leg, where people take their bills — and their history on issues — very seriously. Ammiano was furious, and talked to Steinberg, who (properly) apologized for stepping on his toes. Leno told us he had no intention of undermining his San Francisco colleague, that he had immense respect for Ammiano and all of his efforts, and that he wouldn’t move forward with any bill that didn’t have Ammiano’s input and support.

But it raises the question: Why is Brown even involved in medical marijuana? The only answer I can come up with is that he’s making money off it. Not as a dispensary owner or a grower, but as, in effect, a lobbyist.

When I heard Brown was messing around with the industry, I called Steve DeAngelo, who runs Harborside Health Center, the $22 million a year dispensary in Oakland. DeAngelo’s a promient leader on medical marijuana issues, and has built a respected business that pays taxes to Oakland, provides quality product, and is in many ways a model for what a dispensary should look like.

We talked for a while about Ammiano’s bill, and DeAngelo said he wants to be sure there’s community consensus. “The most important thing is that whatever passes addresses the issues and has broad supoprt in the industry,” he said. He agreed that regulation is needed, but stopped short of endorsing Ammiano’s bill, saying “there still needs to be further discussion.”

Then I asked him if he knew why Brown was talking to the state Senate president, and he told me:

“Willie Brown has been a political advisor to Harborside.”

I asked him if Harborside was paying Brown for his advice. He refused to say.

Okay then. But Brown doesn’t have much of a history of working on this issue pro bono, and is not known for serving as a “political advisor” (or doing much of anything else in the way of work) for free.

What does Brown think about the Ammiano bill? “He thinks,” DeAngelo said, “that it’s important it have a broad base of support.”

Willie Brown is not popular with the voters of California. His history of questionable (at best) ethics was among the reasons the voters approved terms limits for the Legislature. Hardly anyone on the left trusts him. A medical marijuana regulatory bill that has his fingerprints isn’t going to do much for “consensus” or “broad-based support.”

So maybe the best thing Brown could do for his client is stay the hell out of Sacramento.

Does Mayor Lee support Airbnb dodging its $1.8 million tax debt to SF?

Sasha Cuttler

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March 22, 2013

185

Does Mayor Lee support Airbnb dodging its $1.8 million tax debt to SF?

My story in this week’s Guardian about how Airbnb appears to be refusing to pay the hotel taxes it owes to the city has gotten a lot of attention. But I’m still getting stonewalled by representatives from the company and Mayor Ed Lee, who apparently refuses to take a public stand against corporate tax evasion, even when it means thousands of San Franciscans could get stuck with an unexpected tax bill.

How much money are we talking about? According to a study that Airbnb commissioned and publicized late last year, its hosts in San Francisco collect $12.7 million from their guests every year. That means that if the company was charging the 14 percent Transient Occupancy Tax – as the Tax Collector’s Office last year ruled that it must – it would be paying the city nearly $1.8 million annually.

But that doesn’t seem to be happening, although only Airbnb can say for sure, which is why its spokespeople have been dodging my questions for more than a week. As I reported, taxpayer privacy laws prevent city officials from disclosing how much individual businesses pay in local taxes, but we do know Airbnb doesn’t add the TOT to the online transactions it facilitates or specifically encourage its San Francisco hosts to collect the taxes (even though the tax codes make the hosts and Airbnb jointly responsible for this growing debt to city coffers). And with the company charging 6-12 percent per transaction, it’s a safe bet that it isn’t simply paying the taxes itself.

What makes this particular case of corporate tax dodging even more interesting is the fact that Mayor Lee has a close connection to this particular San Francisco-based corporation. Venture capitalist Ron Conway is a top investor in both Airbnb and Mayor Lee’s political campaigns, creating a potential conflict-of-interest in Room 200. Last year, Mayor Lee personally lobbied against the interpretation by the Tax Collector’s Office, and now he appears to be silently backing Airbnb’s resistance to paying its taxes.

Last week, when I was trying to get a comment for Lee spokesperson Francis Tsang on Airbnb’s apparent tax dodge, he replied, “It’s an incorrect assumption that Airbnb and hosts haven’t been paying any transient occupancy tax..” Of course, because of the taxpayer privacy laws, Tsang can’t actually support that statement and I responded by laying out the evidence that the city is getting stiffed by Airbnb.

Then, he and Airbnb simply stopped responding to my questions, even though I’ve made repeated inquiries and asked only whether Mayor Lee was willing to make a public statement calling for a major San Francisco corporation to meet its local tax obligations. And in the interests of fully transparency, I’ll close with the email that I sent to spokespersons for Airbnb and the Mayor’s Office on Wednesday as my story came out, along with their emails in case you want to push for answers yourself.

kim@airbnb.com, francis.tsang@sfgov.org, christine.falvey@sfgov.org.

Dear Airbnb and mayoral spokespeople,

Since I couldn’t get responsive answers from any of you about why Airbnb isn’t collecting the Transient Occupancy Tax from its guests, I wanted to forward the link to my story on the topic in our latest issue (http://www.sfbg.com/2013/03/19/airbnb-isnt-sharing) and to let you know that I will continue covering this issue in the Guardian and our sister newspapers until you address it publicly.

Because of privacy laws that limit the Tax Collector’s Office from addressing this directly, only Airbnb can say whether they’re paying any of the hotel taxes that the city last year conclusively ruled that they owe. As I reported in my story, that tax obligation is shared jointly by Airbnb and its hosts, who don’t appear to have been warned of this by the company, making this an issue of consumer protection as well as corporate greed.

Will the Mayor’s Office make a public statement opposing tax evasion? Will it stand up for San Franciscans who may be unwittingly stuck with the tax bill by Airbnb? Or will Mayor Lee stick up for a tax-dodging corporation funded by the same billionaire that funds his political campaigns? And how will people feel about San Franciscans and the city treasury paying for his political ambitions?

These are all questions that I plan to air and explore in the Guardian, and I think that our readers and the general public deserve answers to those questions. If there are reasons why Airbnb guests aren’t being charged the TOT, some other arrangement that has been made, or some other complex reasons why Airbnb feels it can’t comply with last year’s ruling by the Tax Collector’s Office, I’ll be happy to hear it and let you make your case to our readers. But I don’t think that continuing to stonewall me is going to be a viable strategy for any of you. I hope to hear from you soon.

On KPFA, Gavin Newsom ducks the tough ones

Zelda Bronstein

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March 21, 2013

184

On KPFA, Gavin Newsom ducks the tough ones

Gavin Newsom sat down for an hour with Brian Edwards-Tiekert of KPFA’s Up Front, and the show is remarkable. Brian was a little less harsh than Steven Colbert, who (properly) said the Gavster’s new book, Citizenville, needs “a bullshit detector” and that “everything in there could be carved on a stone and put in someone’s garden,” but he did a great job putting Newsom’s book in the context of state and local politics and he tried valiently to pin the lite guv down — on anything.

Up Front is on at 7 am, and that’s a little early to start on the bourbon (even by my standards), but I was so tempted to do the Gavin Newsom Platitude Drinking Game … and fortunately, I linked to the recorded archive above to so you do it yourself tonight. Every time Newsom says “engagement,” take a shot. Everytime he says “robust,” take two. Don’t worry — when he talks about fracking, you’ll need to throw up anyway.

Newsom’s basic argument is that the public needs to get more involved in government, and that the generation just coming of political age is used to crowd-sourcing and peer-to-peer communication, and that technology can allow politicians to have “a real conversation with the public.” (Oh, and he talks about “transparency,” although his mayor administration was openly hostile to sunshine and public records.)

Whatever; that’s all fine, as far as it goes. Holding virtual “town hall” meetings is a nice idea; asking the public how to solve city and state problems makes good sense. Some people in office already do that.

But the notion that we can fix what he calls a “broken system” entirely by adopting private-sector models and using digital devices ignores (as Brian pointed out repeatedly) the reality of American politics. “Most of society’s problems,” the KPFA host noted, “are rooted in who has the power.”

There are tough issues that require not more “conversation” but real leadership — and strong stands. If Newsom had “crowdsourced” his decision on same-sex marriage back in 2004, it never would have happened.

Same goes for Prop. 13, prisons v. education, the state’s tax system — and the dramatic divide between the rich and the poor. That and the fact that the state doesn’t raise enough revenue in taxes on big business and the wealthy to provide decent services.

Brian notes that the state cut dental care for poor people; “either the money is there for dental care or it isn’t.” Newsom countered that there’s enough volunteer and private-sector help out there to solve all these sorts of problems that the government can’t pay for. He’s just wrong; there isn’t. You cut dental care and people’s teeth get worse and worse and some of them get very sick.

His response to the need for more state money? Growth. Same as what the Republicans say. No wonder Newt Gingrich loves the book so much.

Then after ducking questions about Prop. 13, oil severance taxes, and tax policy in general (excpet to say that we need to expand sales taxes — the most regressive of all — to cover “services” — he got to fracking.

Brian asked him about the expansion of hydrofracking in California, and Newsom refused to come out against it. All he said was that “we’re not going to do anything that’s not done right.” Huh? There’s a “right” way to do fracking?

You want to throw up what’s left of your Newsom Platitude Drinking Game consumption at the very end, when he talks about the Twitter tax break and the cost of housing in San Francisco. His basic message? Bummer that it costs so much to live here. Not much we can do. “It’s a challenge,” he says, “that’s the burden of success.”

Success for some. Challenge for others.

Party on.

Spare change, Larry?

Sasha Cuttler And Mary Magee

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March 20, 2013

43

Tensions flared over the America’s Cup last week as critics called for billionaire yacht owner Larry Ellison to cover the looming city deficit out of his own deep pockets.

It’s evidently a popular idea: A petition asking Ellison to pony up had collected 1,663 signatures as of Wednesday morning.

The language in the petition, started by former Sup. Aaron Peskin, cuts straight to the point: “Your net worth is $43 billion,” it states. “Covering the America’s Cup debt would be equivalent to a person who has $40,000 donating $13.95. Is that too much to ask?”

At a hearing March 13, Sup. John Avalos asked why the city’s General Fund was on the hook to help cover costs for the yachting event, despite earlier assurances that the city would be reimbursed for tournament-related expenses.

The prestigious international yacht race will be held on the San Francisco Bay starting in July. A host and venue agreement hashed out between the city and race organizers provided that the America’s Cup Organizing Committee, the tournament’s fundraising arm, would “endeavor” to solicit donations from private donors to reimburse the city for expenses incurred, originally pegged at $32 million. Total city costs are now estimated to hover around $22 million, but so far ACOC has sent less than $7 million in reimbursement, city agency representatives reported at the hearing.

The fundraising committee has mostly come up dry on the rest — and now Avalos is irked because the city agency that negotiated the deal appears to be “moving the buoys,” as he characterized it, by counting a projected tax revenue boost instead of actual reimbursement dollars as adequate compensation for city spending.

Mike Martin, tasked with leading the city’s involvement in the America’s Cup under the Office of Economic and Workforce Development, showed a slide at the hearing suggesting that ACOC’s “remaining fundraising need” was just $2.6 million, since a projected $13 million in increased tax revenues would bring the city to a break-even point. That projection was based on expected increases in sales, payroll and hotel taxes during the yachting event.

The presentation seemed to reframe the premise that the city would be made whole for tournament-related expenditures, as well as reap the benefits of a tax boost, in exchange for agreeing to host the sailing events. Yet Martin called this notion a “mischaracterization” in a phone interview.

“I don’t disagree that there are people who think that this is not what they understood to be the deal,” Martin said, clearly reacting to Avalos. But “this was part of the policy dialogue at all steps of the conversation.”

Reached by phone after the hearing, Avalos did not sound satisfied with the responses he’d heard. “It seems that the commitments that were made to the Board in 2010 … are not being taken seriously,” he said. “Now that they’re coming up short on fundraising efforts, they’re trying to say the General Fund should be subsidizing the cost of the race.”

Martin pointed to a report prepared by Budget and Legislative Analyst Harvey Rose in December of 2010, before the contract between the city and race organizers was finalized. The report included a break-even analysis that factored in tax revenues, and Martin stressed that this consideration had been part of the dialogue since the outset.

But that same report also contained a key recommendation: Rose advised the supervisors to amend the proposed agreement to “require that the America’s Cup Organizing Committee pay the City and County of San Francisco $32 million, or final estimated city costs.”

No such ironclad requirement was ever included; instead, the fine print in the final agreement wound up containing watered-down language: “The Authority and the City acknowledge and agree that they are not relying in any manner on any current or future commitment … or any statements, representation, or actions of, any … agent of [ACOC].”

Nick Magel, who works for Causes.com, told us that Peskin’s online petition calling on Ellison to cover the fundraising shortfall was gaining more momentum than most online campaigns taken up via the website. “The campaign is performing well, considering it’s less than a day old,” he said March 15. “The most impressive indicator is that over 95 percent of the signatories are from the Bay Area. Seems the campaign is striking a chord with local residents.”

Airbnb isn’t sharing

Andrew Lam

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March 19, 2013

108

[UPDATE 3/22: Airbnb owes nearly $1.8 million to the city. Why is Mayor Lee silent?]

steve@sfbg.com

Despite a widely watched ruling last year by the San Francisco Treasurer/Tax Collector’s Office that Internet-based “shared housing” companies must pay the city’s hotel tax, the high-profile local outfit Airbnb and its hosts aren’t routinely charging guests that 14 percent tax.

And while privacy laws prevent the city from revealing any company’s specific tax payments, it’s possible that San Francisco is getting no hotel tax money from Airbnb at all.

Airbnb allows residents to rent out their apartments to visitors through a web interface. Tax Collector Jose Cisneros concluded in April 2012 that the company and its hosts are acting as hotels, and must pay the city’s Transient Occupancy Tax.

But almost a year later, Airbnb’s website doesn’t include the tax in its booking rates. And local hosts who are partially responsible for paying the tax are being given only vague information about their tax obligations.

Hotels add the tax to the price of a room. But when you book a room on the Airbnb site, there’s no category for local taxes and the 14 percent isn’t added to the price.

When I inquired about renting an Airbnb room in San Francisco this week and asked my would-be host about the issue, he said he was unaware of his tax obligation and referred me to Airbnb’s online policies, which are vague at best. One FAQ specifically about tax issues was answered, “We expect all hosts to abide by local laws, agreements, and other applicable regulations, as outlined in our terms of service,” later adding, “We encourage you to work with a legal and/or tax professional in your area to determine how to handle compliance.”

For a company that bills itself as an easy way for the average renter to make some spare cash, that doesn’t seem to encourage compliance with San Francisco law. Even the civic-minded host who clicks through the “How do I collect taxes for my reservations?” question is given this answer, “You are responsible for managing your tax and other regulatory obligations. If you determine that you need to collect tax for renting in your city, please add the tax amount to the listing price.”

We couldn’t find a listing anywhere that included the city’s 14 percent tax.

In theory, the hosts could be paying that money — but the entire transaction is done through the web, and there’s nothing on the site that informs hosts that they need to collect 14 percent. In fact, there’s no mention in any of the material about any specific city tax.

It’s possible that Airbnb is simply covering the 14 percent out of its profits — but the company only collects 6 to 12 percent of the cost of a room as its cut. So by taking on the taxes itself, Airbnb would be losing money on every transaction.

Greg Kato, the policy and legislative director for the Tax Collector’s Office, told us he’s barred from disclosing information about Airbnb or any individual taxpayer. So the city can’t confirm or deny that the money is coming in. He did say that his office takes the issue seriously: “Just because I can’t talk to you about individual taxpayers doesn’t mean we aren’t enforcing the law….We continue to collect taxes, we continue to audit folks and do investigations.“

Airbnb could tell us if it’s paying, but spokesperson Kimberly Rubey and local consultants to the company have ignored repeated calls and email inquires from the Guardian about the issue.

Airbnb lobbied aggressively to avoid the tax liability, with the support of Mayor Ed Lee. The mayor’s top campaign fundraiser, venture capitalist Ron Conway, was a big early investor in the company.

Lee, who toured Airbnb’s huge new headquarters space at 888 Brannan with CEO Brian Chesky on March 4, had no comment directly on whether the company was paying — or should be paying — its hotel taxes. Spokesman Francis Tsang would only say: “The Mayor supports the emerging sharing economy and efforts to support it within appropriate regulation to ensure public safety. The Mayor also believes that laws and regulations should occasionally be reviewed for continued effectiveness and application in light of changing technologies and economic/cultural trends.”

San Francisco and other California cities have been battling Internet-based companies over the collection of hotel taxes for years. San Francisco, Los Angeles, San Diego, Santa Monica, and Anaheim are together suing Expedia, Travelocity, Priceline, and other companies that do hotel reservations over the issue, with LA County Superior Court Judge Elihu Berle ruling against the cities last month. Appeals are expected in the case.

The issues are different in that case because the hotels are still paying the tax, based on discounted room rates charged after the companies collect their fees. Airbnb, Vacation Rentals By Owner (vrbo.com) and other companies have contested the requirement that they pay any local taxes on their service.

Cisneros told us he made it clear last year through hearings and a ruling interpreting city tax law that Airbnb must pay the Transient Occupancy Tax: “We work very hard to collect all taxes and to make sure everyone is clear on when taxes apply, which is why we did these hearings.”

Board of Supervisors President David Chiu has been in negotiations with Airbnb, similar companies, the Hotel Council of San Francisco, and other interested parties to develop legislation to address the “legal grey area” they occupy, as The Economist magazine put it in a March 9 cover story on “The sharing economy.”

As I explored in my own investigation last year (“The problem with the sharing economy,” 5/1/12), Airbnb’s basic business model often runs afoul of city laws (such as the ban on charging guests more than the tenant pays in rent) and private leases (which routinely prohibit subletting of apartments), as well as raising complicated tax, liability, and land use issues.

In high-cost cities like San Francisco that have complex landlord-tenant dynamics, Airbnb can be a way to skirt local protections. New York City essentially banned Airbnb rentals in 2010 and last year went after a landlord for using the service, threatening fines of up to $30,000, according to The Economist.

“The shareable economy has raised many new and complicated public policy issues,” Chiu told us. “Crafting legislation on shareable housing spaces has taken longer than expected because of these complications, but we hope to have something in the coming months.”

Chiu has staked out a middle ground on the shared housing issue, in the past authoring legislation that challenged the “hotelization” of San Francisco apartments by corporations seeking to get around local tenant protections, expressing hope that his legislation will legalize Airbnb’s activities in ways that both its supporters and critics can live with.

Notably, Chiu also differed from Lee on the tax issue when it arose last year. As Chiu told us, “It has always been my perspective that we need to treat Airbnb and similarly situated companies the same as we treat our hotels.”

Poverty among plenty — and it’s getting worse

Zelda Bronstein

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March 12, 2013

410

Poverty among plenty — and it’s getting worse

Check out the news this week:

The Associate Press reports that there are increasing numbers of homeless and poor people in Silicon Valley. The piece almost sounds like something I would write:

Simply put, while the ultra-rich are getting even richer, record numbers of Silicon Valley residents are slipping into poverty. “In the midst of a national economic recovery led by Silicon Valley’s resurgence, as measured by corporate profits and record stock prices, something strange is going on in the Valley itself. Most people are getting poorer,” said Cindy Chavez, executive director of San Jose-based Working Partnerships USA, a nonprofit advocating for affordable housing, higher minimum wages and access to health care.

That will come as no surprise to people who lived through the last tech boom in San Francisco and are struggling to live through this one. Great wealth does not trickle down around here; it sucks up housing, drives up costs, and creates homelessness and poverty for the most vulnerable:

The causes for the growing disparity are complex, but largely come down to one thing: a very high cost of living. The median home price is $550,000, and rents average just under $2,000 a month for a two-bedroom apartment in this region that is home to many of the nation’s wealthiest companies including Facebook, Apple Inc., Hewlett-Packard Co. and Google. For a family of four, just covering basic needs like rent, food, childcare and transportation comes to almost $90,000 a year, according to the nonprofit Insight Center for Community Economic Development. “The fact is that we have an economy now that’s working well only for those at the very top,” said Lawrence Mishel at the Economic Policy Institute in Washington, D.C. “Unless we adopt a new approach to economic policy, we’re going to continue going down this path, which means growth that does not really benefit the great majority of people in this country.”

Meanwhile, there’s a new study out, using a new approach to economic data, that shows that almost a quarter of all California residents live below the poverty line. The raw data, which is a bit thick, is here. There’s a state Senate report on it here. Sen. Leland Yee (D-SF) held a hearing on the data — but uncovering the facts, while valuable, isn’t going to get anyone off the streets. And I don’t understand why this isn’t on the front page of every major newspaper in the state.

Before my trolls tell me that I hate the rich, let me repeat: I don’t hate anybody and I don’t blame rich people for what this country has created. That’s the fault of the policymakers who, since Ronald Reagan too office in 1981, have allowed the United States to embrace increasing social inequality.

Great wealth can make a country, well, wealthy. But if it’s allowed to stick entirely to the top, then if can do more harm than good.

And the reality is that, particularly in the South and the West, tax policy is designed to help the wealthy at the expense of the poor:

The fact is, the more the poor are taxed, the worse off they are, whether they are working or not. We all pay a huge price for this shortsightedness. Medicaid payments, food stamps, disability benefits — all of these federal programs swoop in to try to patch up a frayed safety net.

In other words, it’s not the Invisible Hand of Adam Smith causing the poverty in California. It’s not laziness that causes poor people to live on the streets. And it’s not just happening in San Francisco.

Now, some of the people who like to comment on this blog suggest that poor people just move somewhere else, that it’s too expensive to live in San Francisco and that’s just the way it is.

That’s a bit of a harsh approach, and undermines the entire idea of a city as a community, where people of different income levels can live. But it’s also impractical; one of the reasons people come here, besides the weather and the scintillating level of intellectual dialogue (present company excluded) is that there are jobs here. Oh, and most poor people can’ t just pack up, hire a moving van, relocate to another city, pay first and last month’s rent, and live on savings until they find a new job.

There was a time when the federal government taxed great wealth, and used the money to invest in cities, building (and subsidizing) housing and infrasructure and funding jobs programs. Much of that is now gone; revenue sharing is a ghost of the past, eliminated in the Reagan era.

So now we have almost a parody of American economic news: The New York Times reports that the Dow Jones Industrial Average is setting new records, and on the same page notes that the numbers of homeless people and people living in poverty are also setting records.

This is by far the biggest issue, the most serious crisis, facing the country, and (unlike wealth) it trickles down to every level of government. And it seems as if nobody is paying attention.

The America’s Cup is killing us!

Sasha Cuttler

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March 6, 2013

56

First Larry Ellison and his rich cronies try to perpetrate an audacious real estate scam on San Francisco, after pitting us against other cities to host his America’s Cup race. Even though we were able to scale back that swindle, they still evicted Teatro ZinZanni from Pier 27 so they could profit from overpriced waterfront concerts at the spot they supposedly need for their boat race — lying, cheating and corrupting the system along the way.

Then we learned that Ellison, the world’s fifth richest man, and the other 1-percenters on the America’s Cup Organizing Committee, may stick San Francisco taxpayers with a $20 million bill for their race because they’re all too greedy and selfish to honor their private fundraising commitment – which they could cover by simply writing checks for amounts they would barely notice, and which they’d probably find a way to write off of their taxes anyway.

And now, on top of all those outrageous indignities … they’re killing people!

Well, maybe Ellison and his crew aren’t actually committing murder. But during last weekend’s venerable Escape from Alcatraz triathlon – which was moved up from the warm-ish summer months to the frigid winter because the yachts are apparently unable to share the bay for a few hours one morning – one man died of a heart attack and 150 participants had to be rescued (three times the normal number) because the water was so dangerously cold.

Just one more example of how overentitled rich people, with the active complicity of the Mayor’s Office, are having their way with San Francisco, heedless of the consequences.

It’s about housing, not taxes

Zelda Bronstein

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February 14, 2013

48

Texas Guv Rick Perry made a spectacle of himself trying to take businesses away from California, but as everyone with any sense predicted, his trip was a bust. Fact is, very few businessess anywhere make major relocation decisions because of taxes and regulations. But as Calitics points out (with a nice chart), the real reason people have left California of late is the cost of housing.

The so-called “job creators” have enough money to afford to live here, so they aren’t going anywhere. What’s happening is that the rest of the workforce, particularly the middle-class workforce, is finding the gap between the amount they can earn and the amount they have to pay for a home is getting so radical that they’re leaving altogether.

That’s happening in San Francisco, as evictions are driving people out of the city. Some may move to other parts of the Bay Area, creating what most environmentalists and economists agree is an unsustainable situation: Workers living so far from their jobs that vast amounts of energy have to be expended getting them back and forth. But the data shows that people are leaving California altogether. Calitics:

If we are to really continue our growth, we must address the housing crunch that is going on, especially along the coast. That isn’t accomplished through slashing services and budgets, but rather working to create new affordable housing solutions and ways for young families to stay here in California, where most would rather stay.

And let’s remember: One of the biggest factors that does drive business location decisions is the availability of skilled labor. If people are leaving the state because they can’t afford to live here, who’s going to work in the industries that are the biggest employers in San Francisco (hint: It’s not tech)? Tourism is this city’s greatest economic engine, and jobs in the hospitality industry don’t pay enough for housing in the city that depends on it.

That’s a dilemma we all ought to be talking about — and Rick Perry trying to get businesses to go to Texas is not.

America’s new Progressive Era?

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January 31, 2013

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By Jeffrey D. Sachs
Jeffrey D. Sachs is Professor of Sustainable Development, Professor of Health Policy and Management, and Director of the Earth Institute at Columbia University. He is also Special Adviser to the United Nations Secretary-General on the Millennium Development Goals.

NEW YORK – In 1981, US President Ronald Reagan came to office famously declaring that, “Government is not the solution to our problem. Government is the problem.” Thirty-two years and four presidents later, Barack Obama’s recent inaugural address, with its ringing endorsement of a larger role for government in addressing America’s – and the world’s – most urgent challenges, looks like it may bring down the curtain on that era.

Reagan’s statement in 1981 was extraordinary. It signaled that America’s new president was less interested in using government to solve society’s problems than he was in cutting taxes, mainly for the benefit of the wealthy. More important, his presidency began a “revolution” from the political right – against the poor, the environment, and science and technology – that lasted for three decades, its tenets upheld, more or less, by all who followed him: George H. W. Bush, Bill Clinton, George W. Bush, and, in some respects, by Obama in his first term.

The “Reagan Revolution” had four main components: tax cuts for the rich; spending cuts on education, infrastructure, energy, climate change, and job training; massive growth in the defense budget; and economic deregulation, including privatization of core government functions, like operating military bases and prisons. Billed as a “free-market” revolution, because it promised to reduce the role of government, in practice it was the beginning of an assault on the middle class and the poor by wealthy special interests.

These special interests included Wall Street, Big Oil, the big health insurers, and arms manufacturers. They demanded tax cuts, and got them; they demanded a rollback of environmental protection, and got it; they demanded, and received, the right to attack unions; and they demanded lucrative government contracts, even for paramilitary operations, and got those, too.

For more than three decades, no one really challenged the consequences of turning political power over to the highest bidders. In the meantime, America went from being a middle-class society to one increasingly divided between rich and poor. CEOs who were once paid around 30 times what their average workers earned now make around 230 times that amount. Once a world leader in the fight against environmental degradation, America was the last major economy to acknowledge the reality of climate change. Financial deregulation enriched Wall Street, but ended up creating a global economic crisis through fraud, excessive risk-taking, incompetence, and insider dealing.

Maybe, just maybe, Obama’s recent address marks not only the end of this destructive agenda, but also the start of a new era. Indeed, he devoted almost the entire speech to the positive role of government in providing education, fighting climate change, rebuilding infrastructure, taking care of the poor and disabled, and generally investing in the future. It was the first inaugural address of its kind since Reagan turned America away from government in 1981.

If Obama’s speech turns out to mark the start of a new era of progressive politics in America, it would fit a pattern explored by one of America’s great historians, Arthur Schlesinger, Jr., who documented roughly 30-year intervals between periods of what he called “private interest” and “public purpose.”

In the late 1800’s, America had its Gilded Age, with the creation of large new industries by the era’s “robber barons” accompanied by massive inequality and corruption. The subsequent Progressive Era was followed by a temporary return to plutocracy in the 1920’s.

Then came the Great Depression, Franklin Roosevelt’s New Deal, and another 30 years of progressive politics, from the 1930’s to the 1960’s. The 1970’s were a transition period to the Age of Reagan – 30 years of conservative politics led by powerful corporate interests.

It is certainly time for a rebirth of public purpose and government leadership in the US to fight climate change, help the poor, promote sustainable technologies, and modernize America’s infrastructure. If America realizes these bold steps through purposeful public policies, as Obama outlined, the innovative science, new technology, and powerful demonstration effects that result will benefit countries around the world.

It is certainly too early to declare a new Progressive Era in America. Vested interests remain powerful, certainly in Congress – and even within the White House. These wealthy groups and individuals gave billions of dollars to the candidates in the recent election campaign, and they expect their contributions to yield benefits. Moreover, 30 years of tax cutting has left the US government without the financial resources needed to carry out effective programs in key areas such as the transition to low-carbon energy.

Still, Obama has wisely thrown down the gauntlet, calling for a new era of government activism. He is right to do so, because many of today’s crucial challenges – saving the planet from our own excesses; ensuring that technological advances benefit all members of society; and building the new infrastructure that we need nationally and globally for a sustainable future – demand collective solutions.

Implementation of public policy is just as important to good governance as the vision that underlies it. So the next task is to design wise, innovative, and cost-effective programs to address these challenges. Unfortunately, when it comes to bold and innovative programs to meet critical human needs, America is out of practice. It is time to begin anew, and Obama’s full-throated defense of a progressive vision points the US in the right direction.

Jeffrey D. Sachs is Professor of Sustainable Development, Professor of Health Policy and Management, and Director of the Earth Institute at Columbia University. He is also Special Adviser to the United Nations Secretary-General on the Millennium Development Goals.

Copyright: Project Syndicate, 2013.
www.project-syndicate.org

Can Obama really unravel Reagan?

Zelda Bronstein

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January 28, 2013

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I like Robert Reich; he’s one of the smartest economic thinkers in the country and can explain everything that’s wrong with the economy in two minutes. And I really want to believe that he’s correct in his latest essay, and that President Obama really is poised to under the Reagan Revolution (or at least, the Reagan Republican Coalition).

I get it: The GOP is a fractured collection of groups that often have little in common (although the Democratic Party has some of the same problems). And the Reich message is hopeful:

Obama’s focus in his second inaugural — and, by inference, in his second term — on equal opportunity is hardly a radical agenda. But it aggravates all the tensions inside the GOP. And it leaves the GOP without an overriding target to maintain its fragile coalition. In hammering home the need for the rich to contribute a fair share in order to ensure equal opportunity, and for anyone in America — be they poor, black, gay, immigrant, women, or average working person — to be able to make the most of themselves, Obama advances the founding ideals of America in such way that the Republican Party is incapable of opposing yet also incapable of uniting behind.

All of that may be true — but it’s hard to understate the damage that Reagan did to America — and the amount of work and leadership it’s going to take to get us back to where we were as a nation before he and his ilk declared war on social programs, cities, and non-military government spending.

Before the Reagan Era, even Republicans accepted the concept that the very rich should be taxed at high rates; the marginal rates under Richard Nixon were at 70 percent. In the 1960s and 1970s, the federal government spent huge sums of money on cities. Before Reagan, economic equality was a value in this country. Now it’s not even on the agenda.

Obama’s second inaugural touched all the right notes. But he needs to do more than tinker around the edges of policy if he wants to have a Reagan-style impact on the country. And I don’t know if he’s up for it.

King’s ideals echoed in SF and DC events

Sasha Cuttler

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January 21, 2013

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King’s ideals echoed in SF and DC events

Labor leaders and a plethora of elected officials from San Francisco – including almost the entire Board of Supervisors – began today at the San Francisco Labor Council’s annual Martin Luther King Jr. Breakfast. They heard inspiring words from speakers on hand, but not from President Barack Obama, whose inaugural address wasn’t broadcast at the event as planned due to technical difficulties.

Yet the ideals voiced here at the West Bay Conference Center on Fillmore Street echoed those sounded on Capitol Mall in Washington DC, channeling the spirit of Dr. King in calling for us to take bold collective action to better care for all people and the planet.

“My fellow Americans, we were made for this moment, and we will seize it as long as we seize it together,” Obama said in his speech. “For we, the people, understand that our country cannot succeed when a shrinking few do very well and a growing many barely make it.”

At his invocation here in San Francisco, Rev. Floyd Trammel, called for a “clarity of thought and unity of purpose” and cast Obama as the inheritor of King’s legacy. “In many ways, you sent one, Dr. Martin Luther King Jr., to pave the way for another, President Barack Hussein Obama,” Trammel said in his prayer.

Sen. Mark Leno – speaking in the place of Mayor Ed Lee, who is in DC for the inauguration – quoted the late Supreme Court Justice Louis Brandeis, who said, “We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both.” And while Leno praised those present for helping pass Prop. 30 to begin turning around California’s fiscal state with higher taxes on the rich, Leno also said, “The work is just beginning.”

It was a theme echoed by the most dynamic speaker on the program, Thurgood Marshall High School teacher Van Cedric Williams, who said the theme of both MLK Day and Obama’s inaugural address was that there is still much work to do to realize King’s dreams of social and economic justice.

“I believe community and labor are working on the unfinished business that Martin Luther King started,” Williams said, calling it a moral imperative to help create a better world for all. He called on those present to really “embrace your fellow community member,” those of all races and backgrounds, to pursue the solutions the world needs.

“They have to see the passion,” Williams said of young people today, “they have to know we got their backs.”

Obama also appealed to the obligation that we have to future generations. “We will respond to the threat of climate change, knowing the failure to do so would betray our children and future generations.”

It was a call for Americans to move beyond our narrow self-interest. As King once said, in a quote included at the MLK memorial in SF’s Yerba Buena Center, “An individual has not started living until he can rise above the narrow confines of his individualistic concerns to the broader concerns of all humanity.”

The inauguration and the economic divide

Zelda Bronstein

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January 21, 2013

112

The inauguration and the economic divide

Second inaugration speeches are hard; you have to be political without sounding partisan, inspiring without being divisive — and promise change and progress even if you haven’t accomplished what you wanted in the first term. The Obama address surprised me: He went left, making clear that he wants economic and social equality to be his final legacy. It’s getting rave reviews in the lib-blogosphere, where it’s been described as the speech liberals have been begging him to give for years. You can’t argue with the content — he mentions gay rights, global climate change, equal pay, protecting social security, economic inequality, the need for collective effort … he even talks about reforming the tax code.

So now comes the hard part: The struggle for economic justice has to go beyond a compromise plan that limits higher tax rates to people earning more than $400,000 a year.

In fact, the best thing I read this weekend was a NY Times piece by Nobel-Prize-winning economist Joseph Stiglitz, who argues forcefully that continued economic inequality is prolonging the recession. It’s also destroying the nation’s future:

Our skyrocketing inequality — so contrary to our meritocratic ideal of America as a place where anyone with hard work and talent can “make it” — means that those who are born to parents of limited means are likely never to live up to their potential. Children in other rich countries like Canada, France, Germany and Sweden have a better chance of doing better than their parents did than American kids have. More than a fifth of our children live in poverty — the second worst of all the advanced economies, putting us behind countries like Bulgaria, Latvia and Greece. Our society is squandering its most valuable resource: our young.

Stiglitz says what few in Washington want to admit: We can’t get the economy going again without rebuilding the middle class, and we can’t do that without higher taxes on the rich and a lot more public investment in education. Oh, and all this talk of how it’s out of our control is bullshit:

There are all kinds of excuses for inequality. Some say it’s beyond our control, pointing to market forces like globalization, trade liberalization, the technological revolution, the “rise of the rest.” Others assert that doing anything about it would make us all worse off, by stifling our already sputtering economic engine. These are self-serving, ignorant falsehoods. Market forces don’t exist in a vacuum — we shape them. Other countries, like fast-growing Brazil, have shaped them in ways that have lowered inequality while creating more opportunity and higher growth. Countries far poorer than ours have decided that all young people should have access to food, education and health care so they can fulfill their aspirations.

Makes me think about some of what I hear out of San Francisco City Hall. Oh, we can’t do anything about economic inequality; that’s a national issue. Or maybe it’s a state issue. I bet there’s not an elected official in town today who woudn’t proclaim complete agreement with everything Obama just said — and there are very few of them who are trying to bring that message back home.

In San Francisco, we give tax breaks for businesses that create high-end jobs that drive poor people out of town. We happily seek development without considering the impact it will have on existing vulnerable populations. We even struggle over free Muni for low-income youth. We do nothing — nothing — to reclaim wealth from the 1 percent and put it into local housing, public education, and job-training that could make a dent in our local economic inequality.

Mr. Mayor: Are you even paying attention?

The (bad) Warriors deal, by the numbers

Zelda Bronstein

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January 17, 2013

36

Rudy Nothenberg, who ran Muni and the city’s water system, was chief administrative officer, negotiated the deal for the Giants ballpark, and served under six San Francisco mayors, stopped by the office last week to talk to us about the Warriors Arena. We’ve had our fights with Nothenberg (as we would with anyone who was that close to Willie Brown and Dianne Feinstein) but the guy knows more about City Hall, public works, private development, and infrastructure finance than almost anyone alive. So we were happy to hear what he had to say.

Let’s be clear, here: Nothenberg lives near where the arena is slated to be built, and, as he was quick to tell us, he doesn’t want it in his backyard. But he also presented a compelling case that San Francisco is getting ripped off. And he had a few pointed things to say about the lack of negotiating skills among the members of Mayor Ed Lee’s administration.

Back when Nothenberg was talking to the Giants about a stadium at Third and King — at that point a district of dilapidated and underused warehouses — always kept a card in his back pocket. “I always knew that if things didn’t work out and we didn’t build the stadium, that would be okay too,” he said. In other words: You can’t get a good deal if you’re not prepared to walk away. And when it comes to the Warriors proposal, the mayor has made it so clear that this is his legacy that the team knows the city will never walk away. So one side of the talks can demand pretty much anything, and the other side has no leverage.

Oh, and it doesn’t hurt that just about every development lawyer, political consultant, and lobbyist in town is already working on the project. “They have co-opted everyone,” Nothenberg — no stranger to the dark side of politics — told us.

The exact terms of the deal are still not public, which is a bit odd since the city has already started its environmental review. (Can you really do an environmental impact report on a project when you don’t know what the project actually is? Two difference state courts have come to opposite conclusions, so for now the answer is: maybe.)

But there’s enough information out there for Nothenberg to give us a basic rundown on the financing — and it doesn’t look good. “The Port is really not getting anything out of the deal,” he said. The city will get some increased sales and business taxes, and the Warriors will have to pay housing and transit fees. But there won’t be a lot of new property tax revenue, since that will all go to pay for the arena.

Here’s how Nothenberg laid out his analysis:

The Warriors have to spend $120 million to replace Piers 30-32. (Costs a lot to build such a huge structure over the water.) To make the team whole, the city will sell the Warriors a seawall lot on the other side of the Embarcadero for $30 million, then give the $30 million right back to the team. Then the city will set up an Infrastructure Finance District — the 2013 equivalent of a redevelopment agency — use the future tax increments to fund a $50 million bond. The Warriors get the bond money; the city pays it back. Oh, and then the city gives the team $30 million worth of rent credits, meaning the Warriors will probably never pay any rent at all for the use of that public property. And to make it sweeter, San Francisco will pay the Warriors 13 percent interest on the rent-credit money.

Meanwhile, the local taxpayers will have to come up with a huge amount of money to increase Muni capacity, since the existing transit can’t possibly handle the load of the new arena. Yes, the Warriors, like any developer, will have to pay a modest transit impact fee — “but it’s laughable to thing that this will ever cover the capital and operating costs,” Nothenberg said.

To summarize: The wealthy owners of a professional sports team will get free waterfront land to build an immensely valuable new arena. The city will pay to bring the fans there and get them home, deal with the traffic impacts — and get almost nothing in return.

Good one, Mr. Mayor.

Texas and tax cuts suck; CA leads job growth

Zelda Bronstein

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January 16, 2013

41

Texas and tax cuts suck; CA leads job growth

How many times have we heard that jobs are leaving California for Texas? How many times have big-business groups and the polticians who play to their needs said that lower taxes and corporate welfare make states more “competitive” and are good for the economy?

So look, for a moment, at California and Texas. Who has the lower taxes and the governor who will do whatever employers want? And who has the more robust job growth?

Just goes to show: Tax breaks do not a health economy make. What companies look for when the make location decisions is much more complicated. An educated labor force (which, by the way, means spending tax money on schools and colleges), access to transportation (again, a public-sector concern) and yes, a decent place where the executives want to live are bigger factors than things like the payroll tax.

That’s what studies have shown repeatedly over the years — and it’s playing out now in CA.

The downside of Jerry Brown’s budget

Zelda Bronstein

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January 10, 2013

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The guv is quite proud of his new budget: He’s eliminated the chronic deficits, he’s giving some more money to the schools, and he’s vowing that the state will live “within its means.” Which sounds like no more taxes. And gee, just about everyone in Sacramento is singing Kumbaya; the praise is coming not just from Democrats but from Republicans.

But there’s a downside to the Brown budget: He has, to his credit, stopped the red ink, and he’s presenting things in a brilliant way that makes him look like the grownup the state has needed for many years — but he’s doing very little to replace the the money that services for the poor have lost in the past five years.

“At first blush, it has some good things,” Assemblymember Tom Ammiano told me. “But I don’t see restoration of the cuts for the disenfranchised.”

Ammiano is calling for closing Prop. 13 loopholes and passing an oil severance tax as part of the budget process. And with Democrats holding a two-thirds majority in both houses, those kinds of changes are possible. At the very least, it seems, the progressives ought to demand from Brown a plan to backfill what social service providers have lost. If it can’t all happen this year, it ought to be part of the future budget process.

State Sen. Mark Leno, who chairs the Senate Budget Commitee, was a bit more politic than Ammiano, but he also is concerned that the budget move the state forward:

“With the improvement of our fiscal outlook comes the opportunity to continue our work to restore California. While our recent efforts have focused largely on making cuts in the least harmful manner possible, we will now have more capacity to refine our work to improve essential programs and analyze the role of government and its effectiveness. I look forward to working with Governor Brown and my colleagues in the Legislature to evaluate this year’s budget to help ensure it is the best possible plan for a state on the mend.”

On the mend is right — because the state of California is in way worse shape than it was when Arnold Schwarzenegger took over and screwed things up, and the goal shoudn’t be to keep at a steady state that’s unacceptable. It ought to be returning California to its role as a leader in progressive policy. Sorry, Jerry: A balanced budget alone isn’t good enough.

Oh, and Californians United for a Reponsible Budget, which seeks to cut prison spending, points out that this budget is hardly tough on the bloated corrections budget:

The administration has deserted plans to shrink California’s over-sized prison population, ignoring clear messages from voters. The proposed budget increases prison spending $250 million including a $52 million General Fund increase, bringing the total Corrections budget over $11 billion. Despite the passage of Prop. 36 and continuing realignment, It also projects an increase in the prison population by 2,262 people over the 2012 Budget Act projections. ”If the Governor believes that ‘we can’t pour more and more dollars down the rat hole of incarceration’ then why is he increasing spending on Corrections, planning for more prisoners rather than fewer and defying the demands of the Federal Court and the voters to further shrink the prison system?” asked Diana Zuñiga, Field Organizer for Californians United for a Responsible Budget.

It’s no surprise that the prison guards’ union is happy.

UPDATE: An analysis by Ammiano’s office shows a few other lowlights of the budget: It reduced AIDS Drug Assistance Program money by $16.9 million. It doesn’t restore any of the deep cuts to the state’s Welfare to Work Program. It cuts community college funding by tying state money to student completion, not student enrollment. It offers no additional funding for child care programs. It caps the number of courses students are allowed to take if they want to receive Cal Grants.

The Leg needs to take a hard look at this before it signs off on all these cuts.

Editor’s notes

Andrew Lam

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January 8, 2013

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tredmond@sfbg.com

EDITOR’S NOTES Everybody’s talking about the new data on the price of housing in San Francisco, which is in part because everybody talks about the price of housing in San Francisco anyway and in part because the figures are just so alarming. The figures show that the median rent in San Francisco is $3,100 a month — and while it’s hard to know exactly what that means, since some three-bedroom and larger units are in the mix, most San Francisco rentals are smaller, and I’m hearing tell of people paying more than $2,000 for a studio.

Insane. This hurts everyone, particularly small businesses. The much-reviled payroll tax doesn’t really affect the bottom lines of most businesses, but the cost of housing absolutely does, since it drives up the cost of employing people. High rents are way worse for business than high taxes. I don’t get why all the downtown types refuse to see that.

At any rate, I was listening to KQED’s Forum this morning, and the guests, including an economist from Trulia, the real-estate analysis outfit, kept talking about the “healthy” housing market. Again: Insane. This housing market is about as unhealthy as any capitalist market anywhere in the country. It’s increasing the wealth gap, impoverishing thousands, forcing vast amounts of displacement and making the city less diverse. In what economic universe is that “healthy?”

When I write about this sort of stuff, my beloved trolls all say that’s just how markets work and that any form of regulation (say, rent controls on vacant apartments) just makes things worse. (Not true — see Berkeley in the 1980s.) But it all raises a fun question, and gives me a chance to make a very immodest proposal that is no more outrageous than the existing situation for people who want to live in San Francisco.

Maybe we should take housing in this city out of the private market entirely, regulate it like a public utility — and assign it by seniority.

Remember the college housing lottery? First year, you got stuck with a small dorm room, just like everyone else. You lived with it, and with the roommates they assigned you; rich student, poor student, we all lived in the same place under the same conditions.

Sophomores had a little more choice, and by senior year you could pick the best housing on campus. Nobody complained about unfairness; that’s just how the deal worked.

So imagine if everyone who first arrives in San Francisco (or graduates here and enters the job market) had to live in a small SRO or mini-studio. Twitter executive, nonprofit worker, unemployed person — all of us start out with the same housing conditions.

After you’ve stuck around a while, demonstrating a commitment to the community, you move up — say, after five years you get a one-bedroom apartment, after ten you get a flat, and after 20 years you get a house of your own. People who start families would get more space, but on the same type of schedule. Everyone pays the same monthly rent for the same size place, and eventually, after time, vests into home equity.

What should cities encourage? Stability, community involvement, respect for elders … all of those things fit into this plan. People who might otherwise never meet each other would be thrown into living in the same places; high-paid professionals would learn what life was like for working stiffs (and vice versa).

It’s an eminently fair way of allocating a scarce resource. Anyone have a better idea?

Will narrow business interests continue to dominate SF’s political agenda?

Sasha Cuttler

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January 4, 2013

44

Will narrow business interests continue to dominate SF’s political agenda?

Will the narrow, deceptive, and disempowering “jobs” rhetoric of the last two years continue to dominate San Francisco politics in 2013? Or can San Franciscans find the will and organizing ability to create a broader political agenda that includes livability, sustainability, and affordability?

If it’s up to the San Francisco Chamber of Commerce – whose perspective has been aired in both the Examiner and Chronicle over the last two days – private sector profits will continue to be our only metric of civic success.

Just take a look at the “Pinkslips and Paychecks Scorecard” that the Chamber released yesterday, rating members of the Board of Supervisors based on a series of 16 votes for tax cuts and public subsidies for businesses, approvals of projects serving the rich, rollbacks of government regulations, business surcharges on consumers, maintaining PG&E’s dirty energy monopoly, and blocking an expansion of developer fees to improve Muni.

That aggressive neoliberal agenda, which is shared by Mayor Ed Lee and his big corporate backers, was reinforced by Chamber VP Jim Lazarus in an op-ed in today’s Examiner. Ignoring the rising housing and other living costs that plague the average San Francisco, Lazarus uses hopeful language about how we’re all “poised for success in 2013,” burying the Chamber’s aggressive and exclusive agenda in the subtext.

At the top of his agenda are: “Approval of the California Pacific Medical Center rebuild, reforming San Francisco’s California Environmental Quality Act appeals process, and rule-making for the upcoming gross-receipts tax.” In other words, let CPMC have what it wants, make it more difficult to challenge developers on environmental grounds, and ensure business taxes remain as low as possible.

And to ensure supervisors get the message, he closes by noting that business leaders are “energized and ready” to push their agenda with tools such as the Alliance for Jobs and Sustainable Growth, which waged some of the nastiest and most deceptive political attack ads on progressive candidates in the last election cycle.

The progressive movement of San Francisco has its problems and issues, including a recently widening schism between environmental and transportation activists on one side and the nonprofit housing and social justice faction on the other. And in the current economic and political climate, both sides too often find themselves partnering with corporate and neoliberal interests to get things done.

But now, more than ever, San Francisco needs to broaden into political dialogue, and that means a reconstitution and expansion of its progressive movement. That’s something that the Guardian has long focused on facilitating and publicizing – something that will be my personal focus as well – and we have some idea percolating that we’ll discuss in the coming weeks and months.

Then maybe all San Franciscans can be poised for success in 2013 and beyond.

Why the GOP gets away with obstructing Congress

Zelda Bronstein

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January 3, 2013

91

Why the GOP gets away with obstructing Congress

There’s an interesting piece on Calitics talking about what California can teach the nation in terms of ending Republican obstructionism. Robert Cruickshank, as usual, is right on target — and he points to the real problem in Washington. Republicans in the House no longer worry about losing their seats to Democrats; the GOP has been so good about gerrymandering that only maybe 30 or 40 seats in the entire nation are still competitive. What these increasingly right-wing loonies worry about is a primary challenge from an even loonier, even right-wingier candidate — so they refuse to vote for any taxes and they’re willing to bring down the entire economy if that’s what it takes.

The problem is it’s not as easy to fix nationally as it was in California. We’re talking long-term efforts to change governors and state Legislatures so they can rewrite Congressional districts (or create California-style independent redistricting, which I initially opposed but hasn’t turned out so bad). The Constitution mandages redistricting every ten years, but I don’t think there’s any rule saying you can’t draw new districts more often, or that you can’t create a new way of drawing them and put that in place right away. But again, that’s not immediate.

Meanwhile, Obama’s going to have to force as much as he can through a reluctant Congress and do as much as he can with executive orders.

Willie Brown is so full of shit on Prop. 13

Zelda Bronstein

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December 10, 2012

43

Willie Brown is so full of shit on Prop. 13

The Chron’s conflict-laden columnist made an interesting admission Dec. 9: The multibillion-dollar tax loophole that allows corporations to avoid reassessments under Prop. 13 was all his fault:

After voters approved Prop. 13 in 1978, capping property taxes for landowners, we had to sit down in the Legislature and figure out how to implement it. One of the biggest questions was how and when properties could be reassessed. We decided that should happen whenever a property was “transferred.” When you sold your home, it was transferred to someone else. The home was reassessed, and the taxes for the buyer were increased accordingly. What we did not realize was that corporations don’t actually transfer property – they transfer the stock in the company that owns the property. And Prop. 13 didn’t apply to stock.

Wait: In 1978, Brown (a lawyer) and the office of the Legislative Counsel and the rest of the lawyer-heavy Legislature didn’t know how corporations transfer property? It was all a big mistake? There were no corporate lobbyists in Sacramento trying to make sure that the loophole was created? Just the poor undereducated elected officials who got snookered by their own lack of information?

And remember: That was 1978. Brown was elected Speaker of the Assembly in 1980, and served for 14 years. Somewhere during that era, someone must have noticed what was going on (every county assessor in California did). There was ample opportunity to close that loophole, if the immensely powerful Speaker Brown had any desire to do so.

But somehow, it never happened. Funny thing, that.

So now Brown agrees that this problem should be fixed — but he says the person carrying the bill, Assemblymember Tom Ammiano, shouldn’t be doing the work because he’s too liberal and pro-tax. Which is either stupidity (and Brown’s many things, but normally stupid isn’t one of them) or he’s still bitter that Ammiano forced him into a mayoral runoff in 1999 and lead the rebellion that ousted all of the mayor’s loyal supervisors a year later. Vindictive? Yeah, we’ve heard that about Willie Brown.

“He doesn’t even understand the history of the bill,” Ammiano told me. “I introduced it last year and got it out of committee and to the floor, which was a miracle.” And now, with a two-thirds majority in both houses, the Democrats can approve it without the Republican minority veto.

“I have cosponsors and I’m going to get more,” Ammiano said. “We may be able to make it part of the budget process.”

And since local governments all over the state, and anyone who believes in tax fairness, is going to support this, I think it’s got a pretty good chance of getting to the desk of the governor.

Willie Brown, as is his practice, didn’t return my call seeking comment.

Could we really fix Prop. 13?

Zelda Bronstein

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December 6, 2012

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Is it really possible? Could California be on the path to repair the damage of Prop. 13? Would Jerry go along?

You wouldn’t think so — it’s been talked about for so long and so little has happened. But it’s an all new year in Sacramento, and the era of Republican dominancy-by-minority is over (in fact, the era when Republicans will have any role at all in state government is pretty much over), and already, some changes are in the works.

Assemblymember Tom Ammiano notes:

“Prop. 13 is not the untouchable third-rail anymore. It’s more like the bad guy with the mustache who has tied California to the rails with the fiscal train wreck coming.”

Ammiano is introducing legislation to change the way Prop. 13 is interpreted — to stop corporations for using loopholes to get around paying higher taxes after commercial property changes hands. But the polls now suggest the voters might be willing to do more — the Public Policy Institute suggests that a sizable majority of Californians would like to see a split-role measure approved. That alone would provide billions of dollars in revenue for public schools.

By a 57-36% margin, voters responded positively when asked this question: Under Proposition 13, residential and commercial property taxes are both strictly limited. What do you think about having commercial properties taxed according to their current market value? Do you favor or oppose this proposal? Democrats favor the idea 66-26% and independents like the prospect 58-36%. Even Republicans are evenly divided 47-48%. Voters aged 18-34, who represent the future, favor the idea 65-28% but the idea is also popular among the most reliable voters, those 55 and older, by 56-39%. Splitting the tax roll is a popular idea in every region of the state, among men and women equally and especially among Asians (65-26%) and Latinos (58-36%) but also among whites (56-38%).

Now: That’s before the commercial property industry and every major landowning corporation in the state pours about $50 million into a campaign to defeat any whisper of a split-roll. But we all know that big-money campaigns don’t always win in California — and right now, the guv is a pretty popular guy. So if he got behind a split-roll measure, and every progressive and labor group in the state (and most local elected officials) did, too, it would be at the very least a level playing field.

That, alone, would change California more than anything else the Legislature or the governor could do. It’s out there; it’s possible. I wouldn’t try in 2013, but 2014 is looking pretty good.

Twitter, tax breaks and the New York Times

Zelda Bronstein

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December 3, 2012

86

Twitter, tax breaks and the New York Times

Just about everyone who watches news media is calling it the Story of the Week, and it’s probably going to be one of the top stories of the year, my (informal) nominee for a Pulitzer: Louise Story at the New York Times exposes how corporate America shakes down state and local governments — who often get little in return. The biggest perp over the years has been the automotive industry, which Story says first perfected this kind of blackmail (though Southern Pacific Railroad did pretty well in its day). But now just about every big company tries to demand a tax break or threatens to leave town.

In in the end, there’s no evidence that tax breaks, or the lack of tax breaks, is the most important factor in corporate relocations. There’s even less evidence that all these billions of dollars in public money actually help create jobs, pay for themselves, or are the best way to invest in economic development:

One corporate executive, Donald J. Hall Jr. of Hallmark, thinks business subsidies are hurting his hometown, Kansas City, Mo., by diverting money from public education. “It’s really not creating new jobs,” Mr. Hall said. “It’s motivated by politicians who want to claim they have brought new jobs into their state.”

It’s hard to imagine any sane person reading all the way through the story and now wanting to feel like this poor guy:

“I just shake my head every time it happens, it just gives me a sick feeling in the pit of my stomach,” said Sean O’Byrne, the vice president of the Downtown Council of Kansas City. “It sounds like I’m talking myself out of a job, but there ought to be a law against what I’m doing.”

Story even weighs in on San Francisco’s deal with Twitter, which, she notes, was hardly a struggling startup at the time:

Twitter was not short on money — it soon received a $300 million investment from a Saudi prince and $800 million from a private consortium. The two received Twitter equity, but San Francisco got a different sort of deal. The city exempted Twitter from what could total $22 million in payroll taxes, and the company agreed to stay put. The city estimates that Twitter’s work force could grow to 2,600 employees, although the company made no such promise. … Like many places, San Francisco has been cutting its budget. Public parks have lost about $12 million in recent years, though workers at Twitter will not lack for greenery. The company’s plush new office has a rooftop garden with great views and amenities. Enjoying the perks, one employee sent out a tweet: “Tanned on Twitter’s new roof deck this morning as some dude served me smoothie shots. This is real life?”

Randy Shaw, who loves and worships Twitter and the tax break it demanded, takes the Times to task on this section, arguing that Story got the deal wrong. Actually, neither of them has the true story — what Twitter was most freaked about was the prospect that the city’s payroll tax might apply to the huge wealth in stock options it will be dispensing when it goes public. That’s about a $40 million tax break.

So what if the city just said that it wasn’t going to tax stock options as payroll? Wouldn’t that have satisfied Twitter — without the city giving up payroll taxes on a large swath of mid-Market and surrounding areas? Could we instead have used some of that payroll tax money to protect the vulnerable small businesses that are getting forced out by the Twitter tech boom?

In the end, considering the pluses and minuses (displacement of existing small businesses and their jobs is a minus), will this dead really help create net new jobs for unemployed San Franciscans? (At least automotive manufacturing jobs are unionized and people without advanced degrees can qualify.)

I bet when the numbers are all crunched a decade from now, we’ll learn that this local tax break, like the others Story discusses, did nothing good for San Francisco.

Alerts

Jesse Hawthorne Ficks

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November 27, 2012

0

WED, NOV. 28

Grannies rally against fiscal cliff outside the Federal Building, Mission and 7th streets, SF, free, jreid@californiaalliance.org. The California Alliance for Retired Americans, Jobs with Justice, Gray Panthers of San Francisco, and other groups will be rallying in San Francisco and other cities as it also lobbies in Washington DC urges Congress and President Barack Obama to avoid driving country off the so-called “fiscal cliff” and making deep cuts to social safety net services. As Alliance Legislative Director Hene Kelley said, “That means Congress must raise more revenues by making the wealthy and big corporations pay their fair share of taxes.”

THURS, NOV. 29

Report on drone strikes in Pakistan First Unitarian Universalist Church, 1187 Franklin, SF, 7pm, free, Facebook: Drone Warfare. Code Pink members Toby Blome and Dr. Dianne Budd report back from their 32-member citizen diplomat peace mission to Waziristan, Pakistan to share stories about those affected by airstrikes of unmanned US military drones.

Van Jones speaks UCSF, 2130 Fulton, SF, 7:30-9am, $10–$500, tix and info at bydsf.org/vanjones. Black Young Democrats of San Francisco hosts a wrapup of the 2012 presidential election with author, activist, and former presidential advisor Van Jones, whose latest bestselling book is Rebuild the Dream.

SAT, DEC. 1

SF Women and Politics Women’s Building Auditorium, 3543 Capp, SF, 4:30-6:30pm, free, www.sfgreenparty.org. The San Francisco Green Party is sponsoring a community forum on “Women and Politics/The Status of Feminism in San Francisco.” Speakers to include Nicole Derse, Marie Harrison, Kim-Shree Maufus, Helen Grieco and Christina Olague. Child care available.

The plutocrat

Jesse Hawthorne Ficks

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November 27, 2012

181

news@sfbg.com

On October 6, 2010, longtime civic leader and financier Warren Hellman stood before the Bay Area Council’s annual dinner and announced the presence of a special guest. MC Hammer stepped forward to introduce the man of honor. His name was Ron Conway, and, according to the SF Business Times, he’d moved to San Francisco from Atherton six years earlier.

But now, he was acting like he owned the place.

Former Mayor Art Agnos was in the audience, and he remembers the moment well. “This guy stood up and said that we have to take the city back from the progressives,” Agnos told us. “I barely knew who he was. I’ve been in San Francisco since 1966, and here he comes telling us what to do.”

Agnos minces no words about the man who is, by some accounts, now the most powerful unelected person at City Hall despite suddenly bursting onto the political scene just last year, shortly after that event. “He’s come to San Francisco using his multimillions of dollars to buy systems and people to effectively mandate his views, to project his way of doing things onto liberal San Francisco.”

So who is this guy? He’s one of Mayor Ed Lee’s closest advisors. He’s poured more than $1 million into the last two local elections — dropping at least $625,000 in this year’s election cycle (journalist Larry Bush reports this year’s total at about $800,000). That includes $275,000 to help pass Prop. E, which lowered the business tax rates for technology companies in which he’s invested, and $69,000 to help oust Sup. Christina Olague for defying Lee and Conway on a couple of key votes.

Conway is one of the Silicon Valley’s preeminent angel investors since just after the dawn of the Internet, parlaying his early successes bankrolling Google, PayPal, and Facebook into investments with a vast array of SF-based tech companies, including Twitter, Digg, Airbnb, and Zynga.

His net worth is widely reported at $1.5 billion, but he disputes that he’s a billionaire. Business Insider obtained a leaked list of his investments in 2011 and it included 228 companies. A report on his investments that appeared on Crunchbase.com quantified many of Conway’s investments, including $10 million each in Square (the SF-based startup by a Twitter founder), Stitcher, Yammer, and Pinterest; $20 million in AddThis, $8.3 million in AirTime; $8 million in BuzzFeed; and $5 million each in Twitter, Friend.ly, and Magnetic, among more than 200 tech investments.

It’s difficult to discern his precise financial worth — but nobody doubts that it’s more than enough to funnel vast amounts into local politics, as Conway has been more willing to do than anyone in these last couple years.

There have always been wealthy people in San Francisco who have tried to throw their money — and political weight — around. Walter Shorenstein, the developer and commercial landlord, dominated Democratic Party politics for decades. Warren Hellman and Gap founder Don Fisher put money and time into political initiatives. The list goes on.

But most of them were fairly homegrown — they’d been active in the city for many years before they became political players. And they tended to make their mark in major charitable and philanthropic efforts as well as partisan politics.

Conway, while he does give money to charities like Ronald McDonald House, is a different type, part of the impatient tech generation that’s right-wing on economic policy (Conway was a registered Republican before switching to decline-to-state as he became political active here in early 2011), wants things done his way, and sees no need for community accountability.

“Warren Hellman was interested in children’s issues, public education, he wanted to invest in building community,” Sup. John Avalos told us. “Conway is all about the bottom line of his industry, and nothing more.”

Avalos complained that Conway (like many in his industry) disdains openness and public access. “It’s all behind the scenes,” he told us. “That’s how he likes to operate.”

In each of the last three years, Conway has doubled or quadrupled his political contributions. He’s the first big spender to operate in the city in the post-Citizens United era, when one rich person can play an outsized role in politics, creating independent expenditure committees that can throw around unlimited amounts of money.

And right now, a lot of City Hall insiders say, this unelected, unappointed operative is helping undermine progressive policy and send city politics in a very different direction.

WEALTHY, CONSERVATIVE ROOTS

Conway declined to be interviewed for this piece, with his press spokesperson — Aaron McLear, who served as press secretary to then-Gov. Arnold Schwarzenegger and other prominent Republicans — offering up a canned statement for print. So what little we can glean of Conway’s beginnings come from public records, other media reports, and Gary Rivlin’s insightful book The Godfather of Silicon Valley: Ron Conway and the Fall of the Dot-coms.

Ronald Crawford Conway was born in San Francisco on March 09, 1951. The middle child in an Irish-Catholic family of 12 siblings, Conway also has a twin brother, Rick. Ron Conway went to St. Stephen’s boys high school in San Francisco until he was 15, when the family moved to the wealthy nearby enclave of Atherton.

Conway’s father was a top exec at the then-Oakland-based American President Lines, which today is a major shipping company for Walmart’s goods. The elder Conway cashed out for what Conway described as “a couple million dollars,” according to Rivlin.

Driving through Atherton, you get a feel for how starkly different it is from San Francisco. Stone walls 10-feet high surround most homes, many that look like Spanish villas or small castles to the eye of a San Francisco native. The Conways home there was valued at $18 million in 2001.

It was in wealthy, conservative Atherton that Conway found his political voice, according to Rivlin’s book. “It was in high school where I became more outspoken,” Conway told him. While studying political science at San Jose State, Conway served on the Atherton City Council starting at the age of 21, mostly to “counteract the noisy student protesters at nearby Stanford,” Rivlin wrote.

While his father had been active in San Francisco politics as a Democrat, Conway got involved in local Republican politics as a teenager and worked on Nixon’s 1968 campaign for president, telling Rivlin that he and his twin brother were “dyed-in-the-wool conservatives.”

That ideology apparently stayed with Conway, who records show gave $50,000 to George W. Bush’s 2000 presidential campaign and $90,000 to Schwarzenegger, his “recover team,” and the California Republican Party in 2005-06.

But, Rivlin noted, “he was hardly someone you would describe as politically engaged.” On the issues, Conway told him, “I could care less.” He cares about government, Rivlin noted, “to the extent it has an impact on the business climate.”

GETTING HIS WINGS

Conway worked for National Semiconductor in the 1970s and cofounded Altos Computer Systems in 1979, selling it in the early ’90s and using its proceeds to become an “angel investor,” providing early capital in exchange for an ownership stake, in small tech startups in the early years of the Internet.

To Conway, being an angel seemed to be about helping the rich get richer by pumping up the first big tech bubble. His Angel Investors, LP consisted of Conway and a number of already wealthy Internet and film luminaries, from hardcore investors and disinterested tinkerers, each contributing to the pot that was controlled by Conway.

To be a part of his exclusive investment club you had to have a minimum net worth of at least a million dollars, or have a famous name, according to Rivlin. Countless of the Internet’s rising stars joined Angel Investors and its successor companies. Cobbled from myriad business journals is a small list from among many of Conway’s chosen: Dean Morton of Hewlett Packard, golfer Tiger Woods, Stanford University Engineering Dean Jim Gibbons, Twitter CEO Biz Stone, entertainer MC Hammer, venture capitalist Frank Quattrone, and Salesforce CEO Marc Benioff.

For a man who made his fortune investing in the hottest names in tech, Conway is often described as a bit of an anti-tech Luddite. Not relying on product knowledge, his strategy boils down to this: Conway trusts his first impression of a startup’s CEO. He goes with his gut, as he explains in a free Stanford YouTube class featuring Conway.

And though sometimes his companies would fail, the successes more than made up for those failures — so much so, that he had to expand. Conway started new LLCs to handle his expanding investments. Angel Investors II started with $150 million, according to Rivlin. SV Angel III and IV were no slouches either, starting with investments of $40 million apiece, according to SEC filings for the companies.

The number of investments from Angel Investors at the time of Rivlin’s 2001 book was already well over the hundreds. And the most recent numbers for SVAngel, from 2011, list the number of startups they’ve invested in at 290 companies.

Conway disciple David Lee officially took over as head of the Angels last year, according to California business filings, but several sources indicate Conway is still the largest investor in the various “Angel” branded companies.

Conway is also the head of a long list of other shadowy businesses, all incorporated in Delaware for its lax tax and regulatory policies. Among the more than a dozen companies just in San Francisco that list Conway as president, partner, founder, or agent-of-service — for which most have little information publicly available — are SV Angel Management Holding, RC Chirp Fund LLC, RC Chirp Management LLC, 2000 Washington Street, 2006 Washington Street, Conway Family Foundation, and Magillicutty LLC.

What separates Angel Investors, though, from the usual investment angels, is Conway’s unique way of leveraging his network, known as his “Rontourage.” Hundreds of tech luminaries and celebrities tied to Conway’s Angel companies have an understanding that they will trade favors, according to Rivlin’s book.

“The only caveat, whether you joined a side fund, an advisory board, or Angel Investors, was that you should lend a hand when you could,” Rivlin wrote. “If you’re in the club, you can do someone a favor and trust that somehow you’re going to get repaid for that favor,” tech entrepreneur Jad Duwaik told Rivlin.

That strategy goes a long way towards explaining what Conway is doing in San Francisco.

CEO OF SAN FRANCISCO

Mayor Lee nows seems to be getting the royal Conway treatment, and the companies Conway invests in are getting strong support from the Mayor’s Office at City Hall, from the tax breaks that Twitter and Zynga received last year to this year’s unsuccessful effort to maintain Ainbnb’s exemption from the transient occupancy tax (a decision made by the Treasurer/ Tax Collector’s Office, which defied Lee’s public lobbying on the issue).

SV Angel has investments or equity in over 103 total San Francisco startups, according to SV Angel documents leaked to Fortune last year, including Airbnb, Digg, Formspring, Wikia, EventBrite, Zynga, StumbleUpon, Justin.TV, and a little company called Twitter.

It was Twitter’s threat to leave San Francisco in early 2011, which newly appointed Mayor Lee countered with a multi-million-dollar exemption from the city’s payroll tax — followed by a repeal of the city’s tax on stock options — that first attracted Conway and his wealth to city politics as Lee’s biggest benefactor.

Conway formed the independent expenditure group San Franciscans for Jobs and Good Government to back Lee and undermine his challengers, seeding it with $100,000 and urging fellow tech titans including Benioff and Sean Parker, founder of Napster and an early Facebook backer, to do the same (see “The billionaire’s mayor,” 10/18/11).

Beyond just money, Conway tapped his connections to back Lee, filling a re-mix video of MC Hammer’s “2Legit2Quit” promoting Lee with members of his Rontourage, including local sports stars Ronnie Lott and Brian Wilson, former Mayor Willie Brown, Twitter CEO Biz Stone, and Google exec Marissa Mayer — all performing their parts on the roof of Conway’s Pacific Heights home during a party he threw for them.

Emboldened by Lee’s decisive victory and the mayor’s apparently willingness to move Conway’s agenda of propping up tech companies, Conway upped the ante this year.

RAISING THE STAKES

After successfully pushing last year’s measure exempting Twitter and other mid-Market businesses from paying taxes on new hires, Conway this year supported broadening out those tax cuts through an overhaul of the business tax that voters approved as Prop. E this year.

The measure initially pitted Conway and the technology companies against more traditional businesses, at least in terms of which companies would see tax hikes and which would get the cuts. With large payrolls and low revenue streams until they take off, tech companies stood to gain the most from the measure.

Some technology companies could see their business taxes decrease by 25 percent, while large real estate firms could see theirs increase by a similar amount. The San Francisco Controller’s Office estimated “information” companies saw their share of city tax revenues drop from 8 percent to 6 percent under the change, while “Finance, Insurance, Real Estate” rose from 23 percent to 28 percent.

In October, Reuters reporter Gerry Shih reported on an heated exchange during a closed-door meeting at City Hall in April, where Conway reportedly cut off SF Chamber of Commerce leaders, telling them they “need to get on board” with backing the tax overhaul because “the tech industry is producing all the jobs in this city.”

That may not be entirely true, but Conway and his tech allies are certainly acting as if they are indispensable to both the business community and the city’s political landscape. The next month, on May 11, Conway donated $49,000 to the newly formed Mayor Ed Lee for San Francisco Committee.

And that was just the beginning of spendy year for Conway, from the $275,000 he spent to help pass Prop. E to the $69,000 that he and his wife Gayle contributed to San Francisco Women For Accountability to go after Olague for defying Lee by supporting efforts to have Prop. E bring in some extra revenue, creating CleanPowerSF, and the reinstating Sheriff Ross Mirkarimi.

Now, Conway has pledged to fund the campaign to recall Mirkarimi, continuing his efforts to support Lee and undermine progressives into the new year.

CONWAY’S AGENDA

Whether the Conway-funded attack on Olague was about power, payback, domestic violence, or something else is difficult to say for sure. But his formation earlier this year of San Francisco Citizens Initiative for Technology and Innovation (sf.citi) made clear his politics and agenda in a strange video it made.

The video talks about the range of San Francisco’s problems — you can’t get a cab fast enough, Muni doesn’t work very well, and there’s trash and graffiti on the streets. All of these problems, the video suggests, can be solved with technology. But there’s nothing in the video, or in sf.citi’s agenda, about homelessness or poverty or the gap between the rich and the poor — or the fact that the tech boom is making a lot of those problems worse.

In fact, sf.citi — and Conway’s agenda — offers nothing for San Franciscans who are not middle class or above. There is no suggestion of an app for facilitating improvements to dilapidated public housing in the city, or for a map of free immunization clinics in low-income neighborhoods, or a database for easily tracking the political influence of Conway and his wealthy friends.

In the end, Conway had only this to stay in a statement delivered to us by McLear: “I am very proud to support Mayor Lee and members of the Board of Supervisors who are tackling the important issues facing our City head-on, from creating jobs for San Francisco residents to building more affordable housing to improving our parks, transit and infrastructure.

I became involved in San Francisco politics and formed sf.citi with leading technology companies because we believe that the technology industry shares in the responsibility to solve our City’s challenges and give back to our community. That’s why I donated generously this year to support consensus measures for our parks, City College, affordable housing and protect Hetch Hetchy, and why sf.citi and so many of its member companies supported these measures as well. sf.citi member companies and I will continue to partner with City leaders and communities to give back to the City we love and work together to create jobs and to improve our public transit, public schools, public safety and the lives of every San Francisco resident.”

But his record shows that he’s mostly interested in how the public sector can help the private sector. McLear says that Conway has supported many Democrats; that’s true of almost anyone who tries to be a power-broker in a city where Republicans are a tiny minority.

“He is not right-wing,” McLear said, but when we asked McLear to tell us if Conway had ever supported a measure to raise taxes on wealthy people, we got no response.

That’s because Conway’s agenda is about — as he himself announced at the Bay Area Council and again later at the Commonwealth Club — repealing the progressive agenda. “He wants to make this a totally business-friendly city with nothing that would slow down his plans or those of his friends,” Agnos said.

Adds Avalos: “He wants San Francisco to be a mirror image of Silicon Valley, but he doesn’t have any real concern for the social impacts for working people, renters, and the rest of us.”

Conway’s role in the campaign to defeat Olague showed a fascinating, and dangerous, side of his politics. When Lee first named Olague to the Board of Supervisors, she told us she was introduced to Conway as someone who would support her.

“Willie Brown collected some checks from him,” she told us. She also said caustic mayoral aide Tony Winnicker, who sent Olague a vicious text message after the Mirkarimi vote with a vow to “defeat you,” is Lee’s main liaison to the tech industry. That vote was the last straw after she didn’t play along with Conway on taxes and defeating CleanPowerSF, so the Conway shithammer came down.

“It was a calculated, cruel political strategy to punish her, and to send a message to other politicians that this is what happens if you cross him,” Agnos said. “And that message is going to spread unless progressives stand up against it.”

Added Olague: “I’ve never seen anything like this.”

And Conway doesn’t like to operate in the sunshine. In fact, that’s a key part of his political strategy: Rather than contributing to existing organizations — the Chamber of Commerce, for example — Conway sets up his own independent committees, sometimes several in an election cycle. That can make it harder for the public to follow the money.

Avalos said the main problem with Conway is that “his campaign contributions gives one person, him, overwhelming influence in San Francisco elections and puts San Francisco’s democracy at great peril. ” Steven T. Jones and Larry Bush contributed to this report

SF’s newest political pole gets a new name: Moderate progressives

Sasha Cuttler

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November 19, 2012

101

SF’s newest political pole gets a new name: Moderate progressives

A Daily Kos blogger known as Kurykh has posted an interesting and insightful “crash course in San Francisco politics,” in which he correctly identifies the tri-polar dynamic of local politics. Everyone knows the progressives (Ammiano, Avalos, the Guardian) and the so-called moderates (Wiener, Ma, the Chronicle), and so Kurykh dubs the rising third pole (Chiu, Kim, Mayor Lee) “moderate progressives.”

He calls them “the new kids on the block,” noting that they sided with progressives in 2008 but ushered in a new political reality by siding with the moderates in 2010, now serving essentially as the swing votes on major issues and projects.

“Like other progressives, they are pro-tenant and advocate for more social services to the poor. However, they have pro-business and pro-development tendencies and tend to focus on streamlining bureaucracy and effective government,” he wrote of the moderate progressives.

Personally, I think a more accurate label for this rising new power center is “neoliberal” (I just called them “liberals” in my own San Francisco political primer that I wrote a year ago), a political term describing the belief that any reforms or progress needs to be negotiated with capitalists and corporations instead of coming directly through taxes or regulations.

And I think it underestimates the influence that so-called “moderates” who are actually quite conservative when it come to finances and land use – people like Lee fundraiser Ron Conway and Planning Commissioner Michael Antonini – have in influencing Lee and shaping politics in the city.

But I welcome this contribution to helping San Franciscans understand the political dynamics that are governing this city.