Why taxes need to be on SF's budget table

|
(18)

San Francisco missed an opportunity last fall. While communities around the Bay Area were approving new revenue plans, addressing devastating budget cuts in part by raising their own taxes, San Francisco's mayor and supervisors were sitting on their hands, bewailing the fact that passing tax measures is tough.

But this year's budget is even worse than last year's, and the cuts are going to be even more brutal (particularly when you realize that the cuts will come on top of several years of previous cuts). And still, nobody at City Hall seems to be putting forward any plans to mount a campaign for new revenues in the fall.

It's not that hard a sell, really. Brian Leubitz has an excellent report on Calitics about a new poll showing how people in California feel about pressing issues. Budget cuts are a serious concern; so is employment and the economy. Taxes don't even rate.

In other words, even across California, where the population is far more conservative than it is in San Francisco, people worry more about budget cuts than about taxes.

If the supervisors and the mayor made even a half-serious effort to get the message out -- you can raise these taxes or you can accept these cuts -- I think more than half the voters (all you would need this November) would go for the new revenue, easy.

At this point in the budget cycle, this ought to be not only on the table but front and center. We should have half a dozen different revenue plans in the works; legislation should be floating around, the Budget and Finance Committee should be holding hearing, the Controller's Office should be studying the impacts and issuing reports, and the supervisors should be preparing to include the potential revenue from a November ballot measure in their 2010-2011 budget calculations.

Why isn't this happening? It's almost March, and the mayor will be delivering a budget in less than three months, and at that point the supervisors will have a short few weeks to deal with devastating cuts. And it will be too late at that point to start the debate over new revenue sources.

This is the year, folks. Let's get on the stick.  

Comments

What are your proposals Tim? What would you see as a "fair" tax increase? I've said repeatedly I would support a tax increase if I had assurances it wasn't permanent and was designed to get us over the hump until things (hopefully, one day...) start to turn around.

Posted by Lucretia the Trollop on Feb. 22, 2010 @ 2:23 pm

"It's not that hard a sell, really. Brian Leubitz has an excellent report on Calitics about a new poll showing how people in California feel about pressing issues. "

"His single source for that information? The (utterly unbiased, of course) Mexican consulate."

HAR

Posted by glen matlock on Feb. 22, 2010 @ 3:29 pm

Glad you asked, Lucretia.

First I’d get rid of the payroll tax and replace it with a gross receipts tax (which small business wants), and I’d make it progressive: Companies with higher receipts would pay a higher percentage, and smaller companies would get a tax cut. Not perfect, of course -- some high-revenue companies (supermarkets, for example) have low margins. But since California cities can’t tax corporate income, it’s the best we can do (and Safeway can afford it anyway).

Then I’d look into a tax on income earned in San Francisco -- in essence, a city income tax that would include commuters. I’d exempt the first $50,000 in income, so that only relatively higher wage earners would pay anything, and I’d start very low (less than one percent) and skew it up to maybe 3 percent for people who earn more than $200,000. Most of those people itemize deductions, so they can write it off their federal and state returns, meaning that Sacramento and Washington would actually be underwriting that tax.

Then I’d have Mayor Newsom ask his good buddy Willie Brown to go up to Sacramento and push HIS good buddy the governor to sign Mark Leno’s bill that would allow San Francisco to pass its own Vehicle License Fee -- a tax on cars based on the value of the car.

I’d look at a parcel tax for certain services (for example, a public safety parcel tax) and use that money for police and fire, freeing up some general fund money for other services.

I’d also ask every department to put a line-item budget and all contracts and expenses on the web so we can all watch carefully where the money goes.

That’s a start.

Posted by tim on Feb. 22, 2010 @ 3:34 pm

Um, Brian was reporting on a legitimate poll. That's his source. The analysis is his and mine.

Posted by tim on Feb. 22, 2010 @ 3:36 pm

FINALLY someone at the Guardian offers some solutions and takes the supervisors to task (albeit as an afterthought prompted by Shane the Trollop on a little-noticed blog) instead of just bitching about and reacting to Newsom's transgressions. Maybe if you kept up a sustained effort, such policies will finally sink in with the supervisors and the public at large.

Posted by Matt Stewart on Feb. 22, 2010 @ 6:08 pm

Tim Redmond's tax proposals are not persuasive. He claims that most people in upper income brackets itemize their deductions, so they could deduct the San Francisco City income tax that he proposes. But in California, people in those brackets typically fall under the alternative minimum tax (AMT), which prevents the taxpayer from taking state, local, and property taxes as an itemized deduction. Ironically, California's high state income tax rate is the reason that AMT is triggered. His City income tax would be another potential trigger. Accordingly, while he claims the City income tax could be shouldered by Washington or Sacramento via deductions, the opposite is true--it would create a trigger to prevent the tax from being taken as an itemized deduction.

Second, Obama wants to increase income taxes rates and California already has a sky-high state income tax. Adding a 3% San Francisco income tax would push the highest marginal rate income tax rate north of 50%. (And our City/county has high sales taxes).

Third, confidence in our elected leaders is low. People don't think the members of the Board of Supervisors are competent. Does anyone really want Michela Alioto-Pier deciding how to spend your money? Chris Daly? Eric Mar?

Fourth, there is a new headline every day about how much money public union workers are making, how much overtime they are accruing, how they don't contribute to their pensions, how they want wage increases to cover any contribution they would have to make to their pensions (thanks, Eric Mar), how they refuse to agree to wage concessions, etc. People are so fed up. There is no way the electorate will pass a major tax increase to support the public unions in this climate. No one wants a new tax to pay firefighters making more than $200,000. No one wants a new tax when their Muni bus drivers are making more than $100,000, particularly where the service is so poor.

The bottom line is that we already pay a lot of taxes in this City. Suggesting that we just need a little more money to spend some more is unreasonable and unpersuasive.

Posted by Patrick on Feb. 22, 2010 @ 11:02 pm

The comment by Patrick tells a lot about what's wrong with American society, including California and even San Francisco.

First, he defends the selfish rich, who have far more than they need or deserve, at the expense of everyone else. Americans all fantasize about being rich, so even though the vast majority are not, they oppose attempts to get rich people to pay their fair share of taxes. This attitude makes Americans vote against their own interests, which is why the U.S. has a lower standard of living than many other developed industrial countries and why the average person in those countries is much better off, with things like universal health care and 6-8 weeks of annual vacation time. And BTW Patrick, Americans pay very low taxes compared to Europeans, which is why services for average people here suck.

Next, he uses the usual right wing propaganda about how bad government is and asks why you would want them spending our tax money. What people like this never say is that if the government doesn't make that decision, it will be left up to the rich and powerful. As Noam Chomsky once said, while there is plenty to complain about in government, at least we have a chance of voting them in or out of office. We have NO say in the decisions made by corporations or their rich owners.

The issue of taxes only concerns the rich, because they're the only ones who stand to pay a lot of them. Average Americans have been brainwashed into thinking this is a big issue for them, but it's not. There's only one choice here folks: we either raise taxes in order to provide services, or those services go away. It's time to grow up and quit pretending that we can get something for nothing.

BTW, I agree with Patrick to an extent about public employees being overpaid. Considering how much it costs to live in San Francisco, I don't think MUNI workers are overpaid, but police and firemen certainly are, especially firemen who have 48 hours off for every 24 on and who, with modern sprinkler systems and flame retardants, are needed far less than they used to be. The police and fire departments' budgets are really bloated and should be cut substantially, but most people are so scared of life that they panic at the suggestion that their security blankets of police and fire departments should be diminished.

Posted by Jeff Hoffman on Feb. 23, 2010 @ 8:39 am

"First, he defends the selfish rich, who have far more than they need or deserve, at the expense of everyone else."

The top rate for state taxes is 40,000 $ Are those people rich?

Posted by glen matlock on Feb. 23, 2010 @ 1:52 pm

Saturday, January 23, 2010

"An overwhelming 94% of California voters regard the state’s budget crisis as very serious, but most oppose raising taxes as a solution to the problem.

A new Rasmussen Reports telephone survey in California finds that just 28% of voters prefer raising taxes to cutting back on services or having the state file for bankruptcy.

Forty-three percent (43%) think cutting back on state services is the better way to go, and another 15% favor state bankruptcy. Fourteen percent (14%) aren’t sure"

----

Here was my search words

california taxes poll

I set it for 1/1/10 to 2/23/10

It was the first thing that came up.

Posted by glen matlock on Feb. 23, 2010 @ 1:44 pm

Tim,

It is my understanding that San Francisco cannot implement a City Income Tax, in the way that NYC, Detroit and Philly have one, because it is illegal for any City to levy an income tax in the State of California.

So you'd need a change in State law to make that effective.

Also, a parcel tax for public safety with the intention of that freeing up General Fund money for other purposes is a grossly dishonest tactic. If you want to put a tax increase to the voters, at least be square about what it's for,

Posted by Tom Foolery on Feb. 23, 2010 @ 2:39 pm

Jeff: Your response to my post was a bit vitriolic and misguided. I wasn't trying to advance some right wing agenda with my post. Rather, I think that there are some faulty premises in Tim Redmond's article and I tried to point them out. He floated the idea that City income taxes could be a tax deduction on federal and state income tax returns; I was pointing out that I don't believe that's necessarily true because the way our tax code, including AMT, works. And AMT is not just a problem of the "selfish rich." It sweeps in a lot of middle class people.

Also, can you please point out where in my post I "defend the selfish rich"?

Also, can you please point out where in my post I advance "right wing propaganda"?

The thesis of my post is that people are fed up with reading articles about how much public union/municipal workers are making and that I don't think it's credible to believe people will vote to increase taxes in this climate. I also don't think many people believe that the current Board of Supervisors is a competent legislative body to whom they would want to hand over their income.

Finally, your post is internally inconsistent. In the second paragraph you use the buzzwords that rich people don't pay their "fair share" of taxes. In the fourth paragraph, you write that tax issues really only concern the wealthy, "because they're the only ones who stand to pay a lot of them." If they're the only ones paying significant taxes, how can they not be paying their fair share? If your point is that people in upper brackets should pay even more, that's fine, but your points aren't very clear.

Posted by Guest on Feb. 23, 2010 @ 6:20 pm

Complaining about taxes is right wing crap. Why? Because in a society where there are little or no taxes, only the rich will have services, as only they will be able to afford them. One of the main functions of government is to level the playing field somewhat, so that we can all have basic services. As I said, Americans, especially the wealthier ones, pay very little taxes compared to western Europeans, which is why most of those countries are ranked with higher standards of living, and why the average person in all of those countries has it better than the average person here, with much longer vacations, universal medical care, much better social safety net for job losses and old age, etc.

Even if, for the sake of argument, I concede all of your points, answer these questions:

1. If you do not give the money to the Board of Supervisors to spend on services, what is your alternative? Eliminating services? Having some non-elected person or persons decide how to spend the money? Again, complaining about government in general, unless you're doing so from an anarchist perspective, is just right wing garbage, because either the government runs things or the rich/powerful do. We at least get to vote for the government, for what little that's worth.

2. If your beef is specifically with the Board, what do you propose? An at-large Board that caters only to the interests of big business, like we had in the bad old days? A dictatorship? What is a better alternative to a democratically elected Board of Supervisors for determining how our tax dollars are spent?

3. MUNI drivers make $27.??/hour, which is about an average wage in San Francisco. I drove semis for 20 years and would never drive a bus, because I couldn't put up with what MUNI drivers have to. Please explain how these people are overpaid. Cops and firefighters yes, but you can't lump all city workers together, some make a lot more than others.

4. If you do not want to give up services, where is the money going to come from to pay for them if you do not have taxes? Right now, we need more taxes just to maintain the services we have, not to increase them.

Posted by Jeff Hoffman on Feb. 23, 2010 @ 11:34 pm

Your points 1 and 4 are predicated on the premise that all current services should be maintained. I think that is what is at issue here. Ultimately it's the voters' call but the feeling I feel is that voters want the City to focus on a few core services e.g. public safety and schools, and don't want a socialist nanny that provides everything to everyone.

Your point 2 is about the BofS and, while I don't have a strong opinion of how it is elected, I am concerned that the current system allows fringe candidates to win with a few thousand votes. These are often people who, like Chris Daly, would struggle to gain public office almost anywhere else in the nation. But as long as the voters decide tax increases, I can live with district elections.

Your point 3 misses the point of the public outrage about public sector salaries. It's not just the 50K plus per annum for muni workers - it's the almost insanely unsustainable liability of generous pension and healthcare benefits that push the total payroll cost into the stratosphere. And overtime, of course.

And you know, of course, that SF hasn't set aside any money to fund their massive future pension liabilities. Figure a billion or so, ballpark.

But hey, Oakland is far ahead of us in this mess, so let's just watch what happens there and extrapolate.

Posted by Tom Foolery on Feb. 24, 2010 @ 11:30 am

Usually, when people write using prose like "crap" and "garbage", it's a pretty good sign that their position doesn't have much credibility. Turning to your points:

1 & 4: I think spending on services should decrease and be focused on things like infrastructure, public safety, and quality of life. In 1995, the city budget was about $3 billion. In 2000, it was about $4.4 billion. Now it's about $6.5 billion. Our population hasn't grown much and inflation doesn't explain that increase. Yet, the City still can't balance the books. And despite all this spending, our roads are terrible, the city is dirty, there is trash everywhere, and Muni is a fiasco. Instead, we spend an enormous amount of money on social services yet the homeless situation doesn't seem to be getting any better. It's a little hard to see what we're getting for our tax dollars. Did you see the recent article in SFWeekly arguing San Francisco was the worst run bit city in America? The points in that article seemed pretty hard to refute and didn't make me want to throw more money to city government.

2: I used to think district elections were OK until recently when Eric Mar tried to derail a reasonable pension reform measure by giving the SEIU a raise. It's impossible to dispute that pensions are a ticking time bomb to the viability of the City (and state), and Mar proposed a pay raise. When a board member can be elected by just a few thousand votes and then derail good proposals, there is a problem. So, yes, I've swung back in favor of a City-wide elections. You argue that City-wide elections only favor business, but our current board seems only interested in assuaging the public employee unions who put them in office. See Eric Mar.

3: Last census data I saw had the median per capita income in San Francisco at $46,000, but feel free to point out if I'm wrong. $27 dollars an hour at 2,000 hour work year (50 weeks/40hours), means they're making 20% more than the average San Francisco citizen. So yes, I think Muni drivers are overpaid. Your $27 per hour number also ignores that they have have one of the biggest overtime problems and a contract that makes overtime easy to trigger. It ignores that they make no contributions to their own pensions. It's also hard to say someone isn't overpaid when their wages are set by a contract that takes the two highest municipal transportation wages in the country and averages them to arrive at a salary. By definition, the contract is designed to make them highly paid.

Posted by Patrick on Feb. 24, 2010 @ 3:44 pm

Tom, it's a tricky question -- the state bars cities from imposing an income tax -- but it's perfectly legal to impose a tax on income earned in the city. The distinction: You tax people on the basis of where they work, not where they live. Thus commuters who work in the city would pay, but people who live here and work elsewhere would not.

Imperfect, but still better than a lot of taxes.

The relevant CA Supreme Court case is Weekes v. City of Oakland, 21 Cal 3d 386 (1978).

 

Posted by tim on Feb. 24, 2010 @ 7:52 pm

Tim,

I see what you mean about taxing income actually earned in SF.

And that would imply, of course, that SF residents who work in Silicon Valley would not pay the tax.

Of course, the danger is that all the other Bay Area Cities will then implement tit-for-tat City "Income Taxes".

And isn't a tax on all income earned in SF a lot like the very same SF payroll tax that you want to abolish?

Posted by Tom Foolery on Feb. 25, 2010 @ 6:09 am

I actually wouldn't mind if more cities implemented the equivalent taxes; income taxes are, generally, more progressive than sales taxes, which cities rely on for revenue.

You need a business tax in a city, and SF has used the payroll tax in part because payroll is a rough -- imperfect, but rough -- approximation of the size of a company. Gross receipts is probably a little better, though neither is perfect. A corporate income tax -- a tax on profits -- would be much preferable, but the state won't allow it.

So no, the payroll tax and the tax on earned income aren't the same. In fact, one of my major complaints about the payroll tax is that it's a flat tax; little companies pay the same rate as big companies. A city income tax ought to be progressive, hit the rich harder than the poor.

And, frankly, over the past 30 years the rich in this country have done quite well with the federal tax cuts. Just as Washington was cutting taxes on the wealthy, it was cutting aid to cities -- it's perfectly fair for SF to try to take a little back.

Posted by tim on Feb. 25, 2010 @ 12:32 pm

I pay more than 8 thousand dollars in taxes on my house I live and work in SF my wages are the same as my counterpart in kaiser in Fresno doing the same job and getting paid the same, and paying far less taxes, is that fair. I have no kids I plan on having no kids and I pay for everybody elses kids in public school. I have no time to enjoy the stuff the city wastes our money on because I am too busy working to pay the taxes that the homeless and pore people enjoy like their free or cheep public housing. I am the beast of burden, but also known as the dwindling middle class when I am gone who will be there to support the leaches of society will the rich be canabolized by the poor? watch out rich people you better clean house with the corrupt polititions because if you don't look what has happend in history of other nations in the same situation. Our taxes are up over 60% revolutions in history took place at 40%

Posted by Guest Tom on Mar. 03, 2010 @ 10:25 pm

Related articles

  • Compromise measures

    Housing and business tax propositions don't solve the city's problems, but both sides say they're the best we can expect

  • Richmond’s sugary beverage tax lost big, how's SF different?

  • Airbnb makes small admission on tax issue, saying its hosts should pay