Mayor and Supes Push Mid-Market Proposal; Question Time Legislation

by Paul Hogarth on February 9, 2011

With Gavin Newsom and Chris Daly gone, it’s a lot harder to write about what goes on at City Hall. You didn’t have to know much about policy back then, because the political drama of Mayor-Board relations was enough to understand the dynamic. But today, it’s more complicated. Beyond mere labels, it’s important to look at each piece of legislation and decide if it’s “progressive.” At yesterday’s Board meeting, Supervisor Jane Kim introduced legislation to jump-start economic growth in Mid-Market – which she helped negotiate with Mayor Ed Lee and Board President David Chiu. Beyond keeping Twitter in San Francisco, the ordinance will help re-open a dialogue about progressive ways to tax business – and could help finally bring a grocery store to the Uptown Tenderloin. Chiu also introduced legislation to codify “Question Time” at the Board of Supervisors – and some progressives won’t be happy that questions will be required in advance. But Ed Lee is not Gavin Newsom, and this Mayor has shown a sincere willingness to engage with Supervisors on a more equal footing.

It’s tempting for some progressives to oppose the so-called “Twitter legislation” on a knee-jerk level – because companies often threaten to leave town if they don’t get a tax break. Kim’s predecessor, Chris Daly, went so far as to call it a “corporate giveaway.”

But that misreads a few details. First, while discussions initially were about a complete payroll tax exemption for businesses that move to Mid-Market, Kim and Chiu pushed to have the break only apply to “net new jobs.” Twitter currently has 350 employees, and would still pay its current level of $1.2 million in payroll taxes under the legislation. But by moving from South Park to Mid-Market, it would not be taxed for six years of new jobs created.

Sixty-five percent of Twitter’s employees live in San Francisco, and 25% of them bike to work each day. Therefore, it makes sense to create an incentive to keep them downtown.

And this legislation re-opens a bigger discussion that progressives have talked about for years – the payroll tax is a terrible way to raise revenue. First, only 10% of business pay it – either because they have a payroll of less than $250,000, or for various legal reasons the City can’t extend it to some employers. Second, rather than taxing company profits or their net worth, the payroll tax is calculated on how many people they employ – which by definition makes it a “job-killer” for business that are hoping to expand.

Recently, David Chiu has proposed scrapping the payroll tax entirely – replacing it with a gross receipts tax. Last year, when the Supervisors were considering various revenue proposals for the ballot, Chiu had an interesting idea – to instead start taxing businesses for commercial rents, which the Controller’s Economic Analysis said was better for both jobs and revenue. “We’ve been talking for years about reforming the payroll tax,” said Chiu yesterday.

And Mid-Market has needed an anchor tenant for decades – which will help draw more business and activity to the area. At a brief press conference before yesterday’s Board meeting, Mayor Ed Lee made one comment that I found illuminating. “We are working with police captains to make sure that foot patrols are happening in the area,” he said. As we all know, police foot patrols was an endless battle between Newsom and the Board. The Supes overrode a mayoral veto on mandating foot patrols, only to have Newsom snub them and the Supes would then go to the ballot. And it’s a tension that is persistent at City Hall.

At the Board meeting, progressive Supervisor David Campos brought up the issue of foot patrols – and requested a March 2nd hearing with the Public Safety Committee and Police Commission to scrutinize the “state of community policing” in San Francisco. The Mid-Market proposal may finally give the Police Department an incentive to co-operate.

But the payroll tax proposal would not just benefit Twitter – who has considered moving to 9th and Market. Beyond Mid-Market, the legislation would cover 28 blocks in the historic Uptown Tenderloin and bring a needed boost to the area. At Eddy and Taylor, TNDC (Tenderloin Neighborhood Development Corporation) owns a vacant lot that they have been trying for years to develop as an affordable housing complex – with a grocery store on the ground floor.

The Uptown Tenderloin desperately needs a supermarket – but despite TNDC’s efforts to lure various companies, no major outlet has wanted to come to the neighborhood. Maybe an exemption of the payroll tax for new jobs created could be enough to make it a reality.

At yesterday’s meeting, David Chiu also introduced legislation to codify Question Time – which the voters approved last November as a mandatory Charter Amendment. The Mayor is now required to attend a monthly Board of Supervisors meeting, for the purpose of “formal policy discussions.” The voters had previously passed this as an advisory measure, but Gavin Newsom notoriously refused to attend – calling it political theater.

Chiu’s legislation, however, is likely to raise a few eyebrows. In order to avoid “gotcha” moments, Supervisors will be required to submit questions one week in advance – and the questions will be published in the Board’s agenda. The purpose, he says, is for the Mayor to prepare more thorough answers and keep the focus on policy discussions.

Frankly, I don’t see the need for such caution. When he was Mayor, Gavin Newsom did attend one Board meeting to talk about mid-year budget cuts – where he took unscripted questions from the likes of Chris Daly. Far from “political theater,” he was treated with respect – although admittedly, Newsom was woefully unprepared for handling the questions.

Ed Lee is not Gavin Newsom, nor are Board-Mayor tensions nearly as bad. I have confidence in Mayor Lee to take unscripted questions, and the Supervisors to act like adults. But it’s also true that the need for Question Time – now that we are in a new era – is not what it was before. Chris Daly first proposed Question Time, because he and Newsom were not on speaking terms for over a year. Today, the Supervisors report that they have had more meetings with Lee in a month than with Newsom in two years.

EDITOR’S NOTE: A resident of District 6, Paul Hogarth was an active campaign volunteer for both David Chiu in 2008, and Jane Kim in 2010.

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