Mayor Lee's business tax reform will include new revenue

City workers have pushed hard this spring for the business community to help prevent cuts in city services.

Mayor Ed Lee has acquiesced to labor's demand that the business tax reform measure being negotiated for the November ballot raise tens of millions of dollars in new revenue, rather than being revenue-neutral as Lee and business leaders had previously insisted, according to Guardian sources in both the business and progressive communities who are involved in the ongoing negotiations.

As we previously reported, SEIU Local 1021 had demanded that the measure – which must be submitted to the Board of Supervisors by Tuesday – raise $30-50 million in additional revenue to prevent cuts to city services and to recapture money the city lost when the largest downtown corporations sued the city in 2001 to invalidate its gross receipts tax. If not, the union threatened to qualify a competing ballot measure that would raise the money, something neither side wants.

Sources say the Mayor's Office has agreed to structure the tax to raise at least $25 million in new revenue, and some believe they will settle on $30 million, which is being supported by the big technology companies and is probably enough for labor to sign onto the deal.

But a complicating factor is the fact that Lee's representatives are simultaneously negotiating another ballot measure to create an Affordable Housing Trust Fund that will also need to generate revenue, most likely through an increase in the real estate transfer tax, something the commercial landlords are opposing.

The business community has opposed any tax increases, but it is split between the big technology companies who helped elect Lee and more traditional businesses, including the FIRE (Finance, Insurance, and Real Estate) companies that all observers say are likely to get hit with a higher tax burden whatever the outcome of the current negotiations.

There is an urgency to get this deal done now because of the fast-approaching deadline to introduce ballot measures to the board, and the fact that under state law revenue measure can be passed with only a simple majority of voters only in presidential election years.



So we'll have the City business tax proposal, the City affordable housing tax, the Jerry Brown tax proposal, and the Munger tax proposal on the ballot. Doesn't help passage of any of them to have that many tax measures on the ballot, especially since an issue in the federal election will be letting the Bush/Obama tax cuts expire, too. I predict failure.

Posted by The Commish on Jun. 08, 2012 @ 3:54 pm

only lead to one logical conclusion - none of them will pass.

Whatever Lee's thinking, it is highly unlikely that he decides policy on the basis of the whines of a self-serving union whose only statued purpose is to preserve unsustainable benefits for one class of workers over all other classes of workers.

And the alleged $30 to $50 million in "lost" taxes is a red herring. Those taxes were illegally collected and were never valid to start out with.

Posted by Guest on Jun. 08, 2012 @ 4:37 pm

when it comes to the pension nightmare awaiting this city. Take a look at what San Jose and San Diego did regarding their pension problems - it's only a matter of time until it happens here.

Posted by Troll II on Jun. 08, 2012 @ 4:48 pm

votes on cutting wildly unaffordable benefits for municipal workers, and also ducked the Wisconsin plebiscite.

Voters are angry as hell that city workers' benefits cost three times what the rest of us get, and won't vote for any tax hikes while that remains the case.

Posted by Guest on Jun. 08, 2012 @ 4:56 pm

but the unions really shot themselves in the foot with that election. What I don't understand is why SEIU acts like they're winning the war despite losing these battles - they'd be better off making a deal now vs. having one forced on them by the voters.

Posted by Troll II on Jun. 08, 2012 @ 5:08 pm

work out a deal that lets the taxpayers off the hook for this entitlement and actually gives their workers a chance of retaining their jobs.

But of course SEIU doesn't care about that - just look who works for them - Harlaand and Daly. 'nuff said,

Posted by Guest on Jun. 08, 2012 @ 5:45 pm

This restores money and fairness to the system. We still need salary and pension reform - no reason to pay some SF workers 20-35% more than surrounding bay area counties - at the same time demonizing the lowest paid line workers.

Posted by Guest on Jun. 09, 2012 @ 12:07 pm

with so many tax hike emasures on the ballot, likely will increase the odds of all of them failing.

Posted by Guest on Jun. 09, 2012 @ 12:41 pm

Thought sf mayor extorted sf city workers of salary & pensions while not charging downtown businesses taxes?? The least amongst us are having to carry the big biz! We've had our 401k's(403b's for non profits) crashed & trashed & they want us to pull it out from where sun doesn't shine! Ed Lee is making sure we have no sunshine laws; hasn't done JACK for fraudulent 4CLOSURES; is a PIMP for big biz at expense of workers, laborers! Sick of him and his KANGAROO courts! vitriol

Posted by Guest:vitriol on Jun. 09, 2012 @ 1:32 pm

higher business taxes than other cities in the bay area.

Posted by D.native on Jun. 09, 2012 @ 1:59 pm

...the economy is hanging on by a thread.

Posted by Guest on Jun. 09, 2012 @ 1:15 pm

and could go down in flames if there are too many tax props in November. Do these people even talk to each other?

Posted by Guest on Jun. 09, 2012 @ 2:19 pm

It is still polling over 50%. Do you even believe the lies you post?

#2413: Voters favor Governor Brown's tax initiative 52% to 35%, but evenly divided on Munger plan. Seven in ten hold similar voting preferences toward both measures.

Posted by GlenParkDaddy on Jun. 09, 2012 @ 5:21 pm

Doesn't accurately reflect the tax increase - very misleading- a sunshine and rainbows description.

Posted by Guest on Jun. 09, 2012 @ 9:32 pm

People are feeling "tax hike fatigue"

Posted by Guest on Jun. 10, 2012 @ 5:14 am

Exactly, I agree with you.
Chris Harris
Workers compensation expert

Posted by Chris Harris on Oct. 11, 2012 @ 12:43 am

The "City Family" needs to start covering some of its own pension costs.

We should follow the San Jose/San Diego lead and put a pension reform measure on the ballot.

Pension costs in SF are rising aroung $60 million a year. No one will support a measure that underpins the city family's bloated pension benefits.

Posted by Troll the XIV on Jun. 09, 2012 @ 6:50 pm

the vultures and parasites, and renege on these so-called "contracts".

It worked for Vallejo, and Oakland looks to be well on it's way. Just a matter of time, I suspect, unless the mayor grows a spine and slaps the union down.

Posted by Guest on Jun. 10, 2012 @ 5:16 am

to do precisely what he is doing, raise revenue and protect the city status quo re our employees.

Posted by Guest on Jun. 10, 2012 @ 5:58 pm

And they may be "your" employees but they are sure as hell not "mine".

Posted by Guest on Jun. 11, 2012 @ 7:34 am

So, 5:58pm, you readily admit that the mayor is in the back pocket of the 29,000 city employees and retired city employees that are slowly dragging the city intobankruptcy through their swelling pension and health care costs?

You need to be switched from "defined-benefit" to "defined-contributon" pension plans. Then, and only then, will you stop dipping into the General Fund year after year, and the cuts to city services will stop.

Posted by Troll the XIV on Jun. 11, 2012 @ 8:27 am

I really hope that this new bill will act like a stimulant for the national economy but I have some doubts about it. All the business owners categories should be favored by the new measure, putting only some business owners in a good light won't bring a difference.

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