Square CEO Jack Dorsey’s tax fight goes beyond Prop. C

By Joshua Sabatini : sfexaminer – excerpt

Even before Square CEO Jack Dorsey publicly sparred with Salesforce CEO Marc Benioff over the homeless tax measure facing voters Tuesday, his company was already embroiled in another tax dispute in San Francisco.

Dorsey, who is also the CEO of Twitter, has publicly discussed his opposition to Proposition C and the impacts it will have on Square, an online payment company.

Less well known is that his company was already trying to pay fewer taxes in San Francisco, according to Square’s filings with the U.S. Securities and Exchange Commission.

Those filings show that Treasurer and Tax Collector José Cisneros audited Square’s tax payments for fiscal years 2014 and 2015 and determined the company failed to pay the full amount owed to The City…

The filings said that Cisneros “believes the Company’s primary business activity is financial services rather than information services.”

“We disagree with the Tax Collector’s position,” Square said in the filings… (more)

Whatever became of Berkeley’s neighborhood-serving retail?

Editorial by Becky o’Malley : berkeleyplanet – excerpt

Having lived in university towns for all of my adult life, I am very conscious of the difference in atmosphere when most of the students go home for summer vacation. One obvious benefit is that parking becomes infinitely easier. Yes, yes, I know that we’re not supposed to be driving, even those of us who are over 75 and a bit arthritic. Yes, I know that students never drive any more—well,hardly ever. It must be just a coincidence that many, many cars disappear from Berkeley streets in the summer—surely it’s not because the students are gone…

It will take more than inspiration to overcome what’s going wrong with small businesses in downtown Berkeley. They are getting evicted to make room for developments aimed at BART commuters to San Francisco, who will most likely do most of their purchasing in The City, and by UC offices for employees who drive in from distant suburbs with big box stores.

University Hardware, a stalwart for many years, was pushed or jumped from its wonderful location on University, complete with parking lot, to a dark and dreary car-free location on a side street. Now to add insult to injury the new store has lost access even for customers’ curbside pick-ups of large purchases to the city’s poorly conceptualized new bicycle routing.

There’s a host of similar examples of local businesses done wrong which give the lie to the perpetual myth of a Downtown Berkeley renaissance. Among other things, it’s past time to re-think Berkeley’s downtown area plan, which was jammed through by the previous city administration for the exclusive benefit of developers of mega apartment blocks for well-off consumers who’ll make their purchases elsewhere. A new and better plan would give much more respect to neighborhood-serving businesses and much less latitude to the smash-and-grab crowd who covet our downtown as potential building sites for commuter condos.

And don’t get me started on the way the University of California is sucking up downtown Berkeley as lebensraum for offices which don’t even pay property taxes. That’s a rant all its own, for another day… (more)

This story is repeating itself in communities all over California. The Berkeley story of disappearing local businesses is being exported to Napa County where the housing industry is getting ready to push the wineries out. What will tourists come for once the beautiful views, local wines and food are replaced by housing enclaves? What will people do with their time when the jobs are replaced by robots?

Breed’s oddly conservative attack on income taxes

tim redmond : 48hills – excerpt

Supes will start to look at Trump’s budget after board prez makes surprisingly conservative speech against progressive taxes

So now we know for sure what Donald Trump and the Republicans have in mind for their first budget:  Cut everything that is good for cities, for the environment, and for poor and working-class people, and give more money to the rich and the military. (Oh, and to his weekends in Florida, which will cost the government more than the cuts to senior services and the arts.).

We don’t know exactly yet how much this will cost San Francisco, but it’s going to be a big number. And equally important, San Francisco will need to spend more money, not less, on protecting vulnerable communities; just think about health care, and how many more people will be lining up at SF General if the Affordable Care Act is repealed.

So far, the mayor hasn’t said much about how he’s going to address the problem, but we will hear from his office, and from the controller, Thursday/23 at a special Budget and Finance Subcommittee hearing. It starts at 1pm in the Board chambers…

Today, San Francisco has some of the worst economic inequality in history, and is up there with countries like Rwanda for radical gaps between the rich and the poor. It’s an embarrassment – and one reason for the high housing costs and huge numbers of homeless people on the streets…(more)

There are a few ideas floating around City Hall about raising revenues, most having to do with increasing taxes one way or another. It will be interesting to see which scheme wins approval at City Hall this time. It will also be interesting to see how the voters feel about taxing themselves. Rejection of the sales tax increase proved that. They seem more likely to favor increasing taxes on the wealthy. The hungry SFMTA may have to take a seat in the back if voters find it more important to replace federal funding for health care, housing and food. There is also widespread concern over loss of funding for the environment, education and the arts.

 

Voters had no stomach for raising sales tax last time they faced that choice. So far they seem to favor taxing the rich. Of course a lot of these options depend on changes in Sacramento. We anticipate a lot of public debate before this is settled. Outrageously high public servant salaries (over 100K plus 50K in benefits) do not help City Hall’s argument that it needs more money. The high salaries add to the pension problem that we know is looming large. These are issues that should be addressed before City Hall asks for more taxes.

Big move, big bucks: SF Department of Public Health plans to relocate

By Joshua Sabatini : sfexaminer – excerpt

The Department of Public Health is considering moving from its headquarters at 101 Grove St., pictured left, to both Zuckerberg San Francisco General Hospital, pictured right, and Laguna Honda.

San Francisco may have found a cure for its seismically unsafe Health Department offices in the Civic Center area: moving.

To that end, the department is considering relocating from its headquarters and other buildings in the Civic Center area at a cost of tens of millions of dollars.

The moving day discussions — it would, in fact, take a decade — come as The City is finalizing its 10-year capital plan due out March 1 and as discussions about the move have been ongoing for months among city officials.

The department is currently spread out in nine different buildings — some publicly owned while others are leased — in the Civic Center area, including the department’s main headquarters at The City’s 101 Grove St. public building across the street from City Hall, a building described as seismically unsafe.

The most recent cost estimate of the move is $60 million, which would be borrowed using certificates of participation and paid back over time plus interest.

The move would relocate the department to both the Zuckerberg San Francisco General Hospital and Laguna Honda campuses. No final decisions have been made about the move, but plans show executive offices moving into ZSFG Building 9 and into vacant wings at Laguna Honda… (more)

Trump’s sanctuary city threat, shortfalls lead SF to revise budget

By Emily Green : sfchronicle – excerpt

It seems like San Francisco — the center of the nation’s tech boom and the strong economy and tax revenues that come with it — went overnight from being flush to having serious financial constraints.

The combination of a ballot measure to increase the sales tax that failed, threatened federal cuts from President-elect Donald Trump and a projected $5 billion pension shortfall means City Hall officials are now considering actions that would have seemed unthinkable just three weeks ago.

Among them: redirecting new revenue generated by the just-passed soda tax from health programs to homeless services, ending the Twitter tax break that was designed to draw
tech companies to the city, annulling a voter-approved charter amendment to pay for street tree maintenance and not spending the money to make City College free.

“The city is in a strong financial position, and the mayor is committed to remaining
disciplined when it comes to the budget,” said Deirdre Hussey, Mayor Ed Lee’s spokeswoman. “However, the city’s revenue growth is slowing and pension costs have risen in recent years faster than projected. … These things combined make it essential for policy makers to rebalance the budget.”

San Francisco’s current annual budget is $9.6 billion, up from $6.4 billion in 2010. It’s
bigger than the budgets of 13 states, a reflection in part of the city’s strong economy. The
two-year budget passed in July has no cuts to city services, and departments large and
small got more money. It also funds a 4 percent expansion in the city’s workforce, from just under 30,000 to 30,750 workers.

Three main factors have led to the rapid reassessment of the city’s finances… (download shortfall-budget.pdf) for the full story

Of course the Mayor is proving all the points opponents of the ballot proposals made when they claimed the money is going into the general fund and there is no guarantee that any of it will go where the voters are told it will. Health programs and tree maintenance are the first to go, followed soon by free City College. Hope you were not counting on having those potholes fixed any time soon. You may want to adopt one or fix it yourself.

Proposed SF sales tax hike would reduce consumer spending by $154M, report finds

By sfexaminer – excerpt

A proposed sales tax hike that will go before San Francisco voters in November would reduce the amount of spending in local businesses, but simultaneously raise an equal amount of tax revenue.

That’s according to an economic impact report on the ballot measure from Ted Egan, The City’s economist. The .75 percent sales tax hike would result in a 9.25 percent sales tax rate come April 2017.

San Francisco’s sales tax is currently 8.75 percent, but will decrease to 8.5 percent in October.

Introduced by Mayor Ed Lee with the backing of supervisors Mark Farrell and Scott Wiener, the measure would generate between $150 million and $155 million per year — the same amount it would decrease in consumer spending.

The sales tax hike is already assumed in The City’s proposed budget. Both the sales tax hike measure and the proposed budget will go before the Board of Supervisors on Tuesday for approval.

Higher prices could prompt customers to purchase fewer local products due to the higher tax, which, in turn, would reduce sales by merchants, according to the report. Merchants selling nontaxable products may be affected as well.

As local spending in businesses decreases, The City’s own spending will increase. Private sector jobs will decline, but public sector jobs will rise, according to the report.

“The net impact of the tax increase on employment is positive: a loss of between 430 and 480 private sector jobs, but a gain of approximately 580 jobs in the public sector, for a net increase of 100 to 150 jobs,” the report found.

Mayor Lee’s spokesperson, Deirdre Hussey, said the local sales tax proposal should be viewed as “an extension of the state sales tax that is sunsetting and will be directing money towards San Francisco as opposed to state coffers.” She added, “We have one of the lowest sales tax in the region.”

Scott Hauge, a longtime small business advocate, said he was concerned about the number of taxes being discussed for the November ballot and criticized the process around the sales tax proposal specifically.

“We didn’t feel we were being consulted,” Hauge said. He also noted that when The City recently shifted from a payroll tax to a gross receipts tax, business registration fees increased, totaling some $30 million more annually.

The City intends to use the additional revenue to increase spending on transportation and homeless services. It would take eight votes from supervisors to place the measure on the ballot.

The proposal is not without political controversy.

Supervisor John Avalos has said he wouldn’t support the .75 percent sales tax, after previously backing it, unless Supervisor Mark Farrell removes his controversial tent encampment measure from the November ballot.

Instead, Avalos said he is supporting a separate tax measure: a .50 percent sales tax hike, dedicated toward transportation needs. The .50 percent sales tax hike would have two-thirds of the economic impact of the .75 percent sales tax increase.

During the past decade, San Francisco’s sales tax has fluctuated between 8.5 percent and 9.5 percent. The current rate of 8.75 percent will decrease to 8.5 percent on Oct. 1, with the expiration of Proposition 30’s temporary sales tax increase.

If voters approve the mayor’s sale tax hike, the rate will rise to 9.25 percent on April 1, 2017. The .75 percent sales tax increase would need a majority voter approval to pass(more)

Somehow this does not sound like a good approach. Moving jobs from private to public sounds like a recipe for disaster.