Mayor Newsom’s Prop K was supposed to solve the city’s budget deficit. But the Mayor has done little to help pass the measure, and now claims that a last-minute legislative fix is needed for the measure to win. It is good that the Mayor has admitted his mistake in the drafting of Prop K, but his error could soon send over 1000 city workers to the unemployment line.
The Mayor and most of the Supervisors were all smiles when the city budget passed in July, as they patted themselves on the back for turning fiscal chaos into a balanced budget. But this balancing depended on voters approving Props J and K, the latter a business tax designed to bring in $30 million per year.
Prop K immediately ran into opposition from the Mayor’s own supporters in the small-business community and in the corporate suites of the large downtown law firms. Faced with this emerging opposition, Mayor Newsom had two choices.
First, he could have followed the Willie Brown approach. Brown would have met with the leaders of the opposition, and carefully explained to them what power the mayor has in this town and how it can be used to either benefit or harm their interests.
99 times out of 100, the Willie Brown approach achieved the intended result. Had Mayor Newsom used it here, Prop K would have easily passed.
But our Mayor instead used the Gavin Newsom approach. This approach means that opposing views from people who did not support you in the mayor’s race (Daly and Gonzalez) are ignored, and when your downtown and business backers want you to change course, you follow their advice.
The Newsom approach has led San Francisco to the brink of having a $30 million hole in its current year budget. This does not include the $6.5 million diverted from the Department of Building Inspection to the general fund, a shift whose legality will be decided by the court on October 20.
When Prop K was approved by the Board, Supervisors Daly and Gonzalez unsuccessfully sought to raise the gross receipts tax slightly above the 0.1% figure. This would have raised an additional $5million annually without increasing political opposition to passage.
But the Mayor and Board rejected the Daly-Gonzalez approach, and the “fix” Newsom now seeks—which would raise the threshold for paying the tax from gross receipts of $500,000 to $1,500,00—will bring in $5 million.
It does not take a rocket scientist to realize that had the Mayor and Board supported the Daly-Gonzalez gross receipts level, they could have then raised the threshold without causing a $5 million budget hole. And nearly all opposition to Prop K would have evaporated.
Keep this in mind the next time you read that progressives are not fiscally conscious.
It is clearly not fair to compare Newsom and Brown, but the current occupant of Room 200 should take note of what the veteran politician did well. One of these things was the ability to rally supporters behind a ballot initiative.
When the 49ers stadium-mall was placed on the ballot, Mayor Brown could easily have stood by and watched the measure go down. Instead, he pulled out all stops and called in all of his chits to bring the measure to a legal victory (that the election was likely stolen does not detract from the Mayor’s success at getting the margin close enough for the theft to be feasible).
We are regularly told that Mayor Newsom is wildly popular, with an approval rating of 73%. But instead of spending political capital to solve the city’s budget crisis, Newsom walked away from Prop K at the first sign of trouble.
Of course, it is not the Mayor’s fault that SEIU 790 relied on him to deliver for their members on Prop K. The city unions impacted by a potential $20-30 million budget cut should have mounted their own grassroots campaign to pass Prop K, rather than relying on a politician who is not a strong ally of organized labor.
It is always a mistake to put the passage of a progressive tax in the hands of a politician not truly committed to the cause. We have previously expressed doubts as to the Chamber of Commerce’s true level of support for Prop K, and the Chronicle and Examiner will likely attribute Prop K’s defeat to anti-tax sentiment, rather than a half-hearted, botched campaign by the Mayor.
We can talk all day about the merits of district elections, ranked choice voting, and the state of progressive politics in San Francisco, but the city’s likely failure to pass a progressive tax measure that simply replaces one thrown out by the courts is telling.
As hotel workers fight for their future, the Chamber of Commerce’s economic agenda for San Francisco is steadily being implemented.
