SF Approves Twitter Tax Break Deal(sfgate.com)
sfgate.com
SF Approves Twitter Tax Break Deal
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/04/05/BA7R1IQM9D.DTL&type=printable
5 comments
Yesterday I got an email from SEIU (the government employees union), asking me to write in opposing this deal. It turns out there are over 34,000 government employees in the City + Country of SF. For a population of under 800,000 . Wow.
Why does this surprise you? SF has SF State, UCSF, Hastings Law, the 9th Circuit Court, USGS, GGNRA and is home to many other government agencies. Also, corruption and patronage aren't exactly new in SF, they have been part and parcel in the city going back to before the 1906 earthquake. If anything, SF is a lot less corrupt now than it was during the dot com boom when Willie Brown was mayor.
Why does this surprise you? SF has SF State, UCSF, Hastings Law, the 9th Circuit Court, USGS, GGNRA and is home to many other government agencies. Also, corruption and patronage aren't exactly new in SF, they have been part and parcel in the city going back to before the 1906 earthquake. If anything, SF is a lot less corrupt now than it was during the dot com boom when Willie Brown was mayor.
Try living in Upstate NY. My school taxes were $2,500 in 2007. With no change in property assessment, they are up to $3,400 this year. And we just found out that the local library wants to jack their portion of the tax by over 25%.
This place was a boomtown in the 1960's. Today, the booming business is in demolishing abandoned buildings.
This place was a boomtown in the 1960's. Today, the booming business is in demolishing abandoned buildings.
In San Francisco, a 2-BR condo goes for around $800K. At a 1.16% property tax rate, you'll be paying $9000/year in property taxes. How's that for a tax rate?
In my city, a 3 BR home assessed at $175k goes gets hit for $3100 school and $2100 city/county taxes. A little less than 3x more.
That said I'm not claiming that San Francisco is a cheap place to live, but I'm assuming, that like NYC, living there comes with other opportunities that may balance the costs somewhat.
That said I'm not claiming that San Francisco is a cheap place to live, but I'm assuming, that like NYC, living there comes with other opportunities that may balance the costs somewhat.
14,000 full and part-time city employees to run a city of 800,000.
You love the city's services so much that you chose to live there, yet because you are an expert city planner, you are confident that all those services could be provided with fewer staff. Police, Fire, EMS, garbage, roads, parks, public health, water supply. Feel free to check the box next to the services in that list that you think should not be provided, and feel free to relocate to a city that does not in fact provide those services.
You love the city's services so much that you chose to live there, yet because you are an expert city planner, you are confident that all those services could be provided with fewer staff. Police, Fire, EMS, garbage, roads, parks, public health, water supply. Feel free to check the box next to the services in that list that you think should not be provided, and feel free to relocate to a city that does not in fact provide those services.
No, I don't love the City's services; I love the people who LIVE in the City. The streets are full of potholes. The public transit system (MUNI) is chronically broken (why? because 70% of their cost is personnel!). There are 9000 City employees who make more than $100K per year; when I have friends who are barely able to get by.
Remember: the Government of SF didn't make this City like some Disneyland and then people moved in; the people were here first . You'd be hard-pressed to find anybody in San Francisco who moved here because "the City's services are great".
Remember: the Government of SF didn't make this City like some Disneyland and then people moved in; the people were here first . You'd be hard-pressed to find anybody in San Francisco who moved here because "the City's services are great".
the homeless?
OK, you have a point: the homeless do get some benefit from City services. Though even that system is broken. I pass by several homeless people lying in the doorways every day.
It may be possible that there's a disconnect between "I'm offended by seeing street poverty on a daily basis" and "the system for dealing with poverty in SF is broken".
Unless your plan is to turn all homeless people in SF into Soylent Green, in which case you should run for mayor and good luck with that.
You propose to reduce property tax to 1%. Property tax is what pays for schools, it's not some kind of source of government waste as you seem to imply.
You probably don't know this, but this year, schools in SF were shut down for a extra week each year because of lack of funding. That's a week of schooling that my kids were supposed to have and they aren't getting because it's impossible to bring in the correct amount of money to keep our schools open. How would you propose to pay for schools if you slashed property taxes to 1%? (Hint: bake sales only take you so far.)
Unless your plan is to turn all homeless people in SF into Soylent Green, in which case you should run for mayor and good luck with that.
You propose to reduce property tax to 1%. Property tax is what pays for schools, it's not some kind of source of government waste as you seem to imply.
You probably don't know this, but this year, schools in SF were shut down for a extra week each year because of lack of funding. That's a week of schooling that my kids were supposed to have and they aren't getting because it's impossible to bring in the correct amount of money to keep our schools open. How would you propose to pay for schools if you slashed property taxes to 1%? (Hint: bake sales only take you so far.)
You still need to include the employees of DPH and DPW in your count - so the count is still really high. ~25K
Actually, San Francisco got it right.
Instead of giving Twitter a tax break, they're giving anyone who moves into mid-market or the Tenderloin a tax break. Mid-market has been a blight for decades and plans to revitalize the area have never panned out. The Tenderloin (especially lower Tenderloin), isn't any better.
I think this is a great alternative to the city dumping money into the area. It'll create a powerful incentive to move there regardless of the blight and the effect of a few thousand engineers moving into that area will be dramatic.
I just wish it was for more than 6 years since I think it'll take longer than that to revitalize the neighborhood.
Instead of giving Twitter a tax break, they're giving anyone who moves into mid-market or the Tenderloin a tax break. Mid-market has been a blight for decades and plans to revitalize the area have never panned out. The Tenderloin (especially lower Tenderloin), isn't any better.
I think this is a great alternative to the city dumping money into the area. It'll create a powerful incentive to move there regardless of the blight and the effect of a few thousand engineers moving into that area will be dramatic.
I just wish it was for more than 6 years since I think it'll take longer than that to revitalize the neighborhood.
Bureaucrats and politicians who make ad-hoc decisions like this do a lot of indirect damage to companies. What they have effectively done is raised uncertainty for businesses in SF. Will we get a break? Will our competition? Etc, etc. Uncertainty adds to risk and risk adds to costs.
Apologies in advance for sounding so pessimistic, but this is just another example of beggar-thy-neighbor tax/tax-break policies that limit government revenue potential.
This is outrageous and, in my opinion, is unconstitutional. Americans and American businesses are entitled to equal protection under the law, and handing out customized tax breaks to a couple neighborhoods in order to benefit a specific company is shameful and corrupt.
First off, the payroll tax applies only to companies with payrolls > $250k; does your demand for 'equal protection' mean that you insist on companies of all sizes paying this tax?
Second, the tax break is not Twitter-specific (although even if it were, that would not be unconstitutional). It applies to businesses located in a certain part of SF, and it exempts a company from the first six years of payroll taxes.
Third, city supervisors have the authority to adjust tax structures with a level of geographic-granularity. Why shouldn't they be allowed to make a dumpy part of town more attractive to businesses?
Do you complain when cities and states make themselves more attractive to outside businesses by giving exemptions to certain classes of companies? Do you complain when cities block big-box stores like Walmart from opening in their limits? (Since those are as targeted as this exemption.)
Second, the tax break is not Twitter-specific (although even if it were, that would not be unconstitutional). It applies to businesses located in a certain part of SF, and it exempts a company from the first six years of payroll taxes.
Third, city supervisors have the authority to adjust tax structures with a level of geographic-granularity. Why shouldn't they be allowed to make a dumpy part of town more attractive to businesses?
Do you complain when cities and states make themselves more attractive to outside businesses by giving exemptions to certain classes of companies? Do you complain when cities block big-box stores like Walmart from opening in their limits? (Since those are as targeted as this exemption.)
Do you complain when cities and states make themselves more attractive to outside businesses by giving exemptions to certain classes of companies? Do you complain when cities block big-box stores like Walmart from opening in their limits? (Since those are as targeted as this exemption.)
Personally, yes, I complain about both of these.
As for this specific deal... I'm not too concerned about it, but I think it's the kind of special deal that cities shouldn't be allowed to make. There's just too much potential for corruption when city hall can say "OK, businesses inside this particular neighbourhood don't have to pay taxes". (Gee, Mr Mayor, I've been so good to you with campaign donations over the years, how about you declare my block to be dumpy too?)
Personally, yes, I complain about both of these.
As for this specific deal... I'm not too concerned about it, but I think it's the kind of special deal that cities shouldn't be allowed to make. There's just too much potential for corruption when city hall can say "OK, businesses inside this particular neighbourhood don't have to pay taxes". (Gee, Mr Mayor, I've been so good to you with campaign donations over the years, how about you declare my block to be dumpy too?)
All of this company-specific state and local tax policy, which has proliferated in recent years, is highly irregular, prone to corruption, and violates the spirit of the constitution and American capitalism. Governments should strive to treat everyone equally in the business world, and not use tax policy to play favorites and pick winners and losers. If the underlying policy is bad for the city it should be repealed city-wide.
Local zoning is different from tax policy, it is the customized, company-specific tax handouts that are objectionable.
Local zoning is different from tax policy, it is the customized, company-specific tax handouts that are objectionable.
How is it corrupt? And isn't that a net gain for the city, since Twitter was going to up and move a few miles south?
They were threatening to move to Brisbane, as a way to avoid a 1% city tax on payrolls (which, importantly, includes proceeds from stock options). But it's questionable as to whether a company that moves from San Francisco to Brisbane (which, let's face it, is a dump) would be better off moving. How excited would you be to commute down there if you had a similar job opportunity somewhere else? Would it be worth the 1% in payroll they'll end up saving? I have a hard time envisioning it.
It's great that the mid-Market Street area will (presumably) improve after this happens, whenever it happens. I just wish that in a world in which San Francisco is cutting back on the number of days in the school year that they could find a way to balance the books other than issuing big corporate welfare packages.
It's great that the mid-Market Street area will (presumably) improve after this happens, whenever it happens. I just wish that in a world in which San Francisco is cutting back on the number of days in the school year that they could find a way to balance the books other than issuing big corporate welfare packages.
1) If Brisbane is a dump, the Civic Center area where Twitter wants to move is a toxic waste storage area.
2) The tax is a huge amount of money per employee. 1% (current value - strike). That can be in the thousands for earlier employees.
3) Commute all depends where you are coming from. If you live in SF or the northern East Bay, it might get a bit worse. If you live in San Mateo, Santa Clara County, hell even southern San Francisco, it's a huge improvement. Furthermore, as you get older you are more likely to move south, so the workers most affected by the tax might also actually find their commute better.
3a) I can hardly fathom someone quitting a job that moved a mere 8 miles away. The company should excite you far more than chilling out every day in the Tenderloin.
Finally, a useful link for all: http://co.sfgov.org/webreports/details.aspx?id=1255
2) The tax is a huge amount of money per employee. 1% (current value - strike). That can be in the thousands for earlier employees.
3) Commute all depends where you are coming from. If you live in SF or the northern East Bay, it might get a bit worse. If you live in San Mateo, Santa Clara County, hell even southern San Francisco, it's a huge improvement. Furthermore, as you get older you are more likely to move south, so the workers most affected by the tax might also actually find their commute better.
3a) I can hardly fathom someone quitting a job that moved a mere 8 miles away. The company should excite you far more than chilling out every day in the Tenderloin.
Finally, a useful link for all: http://co.sfgov.org/webreports/details.aspx?id=1255
> the Civic Center area where Twitter wants to move is a toxic waste storage area
Maybe, but I thought this corporate welfare is supposed to instantly turn it into a paradise for young urban professionals, right? Or did I miss something?
Nobody ever woke up in the morning and said "you know where I'd really like to get a job today? Brisbane!" Anyway, mid-Market sucks far less than Brisbane on a number of axes. You can walk or bike to work if you worked in mid-Market and lived in SOMA (as many Twitter employees do); have fun doing that in Brisbane. On Market Street, you can walk to lunch; in Brisbane lunch would be a 10 minute car ride away. Mid-Market also has excellent public transit to get to and from work and other places in the city. In other words, SF is a real city, with real city amenities. Real city amenities cost money. Taxes are how those things get paid for. If you don't see that, then you (and the rest of the tea party) have some growing up to do.
A 1% tax that amounts to "thousands of dollars" means your annual income is hundreds of thousands of dollars. Congratulations on that, but let's get real for a minute -- someone with an income in that range is going to have a bigger problem with an extra 15-30 minute commute each day than the few dollars they never see in their paycheck. And anyway, if the absolute dollar amount were really an issue, market forces would easily compensate for this (that is to say, people who work in San Francisco would be paid more as they flee the city in droves).
Maybe, but I thought this corporate welfare is supposed to instantly turn it into a paradise for young urban professionals, right? Or did I miss something?
Nobody ever woke up in the morning and said "you know where I'd really like to get a job today? Brisbane!" Anyway, mid-Market sucks far less than Brisbane on a number of axes. You can walk or bike to work if you worked in mid-Market and lived in SOMA (as many Twitter employees do); have fun doing that in Brisbane. On Market Street, you can walk to lunch; in Brisbane lunch would be a 10 minute car ride away. Mid-Market also has excellent public transit to get to and from work and other places in the city. In other words, SF is a real city, with real city amenities. Real city amenities cost money. Taxes are how those things get paid for. If you don't see that, then you (and the rest of the tea party) have some growing up to do.
A 1% tax that amounts to "thousands of dollars" means your annual income is hundreds of thousands of dollars. Congratulations on that, but let's get real for a minute -- someone with an income in that range is going to have a bigger problem with an extra 15-30 minute commute each day than the few dollars they never see in their paycheck. And anyway, if the absolute dollar amount were really an issue, market forces would easily compensate for this (that is to say, people who work in San Francisco would be paid more as they flee the city in droves).
Obviously, this comes down to personal preferences, but:
>> Nobody ever woke up in the morning and said "you know where I'd really like to get a job today? Brisbane!"
Note: Twitter's other location was actually more likely to be the Centennial Towers, located in South City (on the border of Brisbane)
I suspect the majority of people living south of San Francisco would prefer a job there. It'd be a significant reduction in commute time - and is pretty close to Caltrain. Where do the employees all live? I have no clue.
There's certainly restaurants @ Sierra Point, though admittedly less so than Market. There's also far less crime, homelessness, etc. Besides Twitter to getting to the stage where they might just go the Google/Facebook route and have cafeterias.
>> Nobody ever woke up in the morning and said "you know where I'd really like to get a job today? Brisbane!"
Note: Twitter's other location was actually more likely to be the Centennial Towers, located in South City (on the border of Brisbane)
I suspect the majority of people living south of San Francisco would prefer a job there. It'd be a significant reduction in commute time - and is pretty close to Caltrain. Where do the employees all live? I have no clue.
There's certainly restaurants @ Sierra Point, though admittedly less so than Market. There's also far less crime, homelessness, etc. Besides Twitter to getting to the stage where they might just go the Google/Facebook route and have cafeterias.
The problem is that other companies, those without Twitter's investors and PR team, still have the pay the tax. If it is bad policy, which it is, it should be repealed for all city businesses.
Yesterday I got an email from SEIU (the government employees union), asking me to write in opposing this deal. It turns out there are over 14,000 city employees in the City + County of SF. For a population of under 800,000 . Wow. And in last years election, they were pushing hard for a ballot initiative that would have slapped an additional tax on hotel rooms.
There is just too much bureaucracy in this city. As revenues have gone up, the bureaucracy has ballooned. The City's annual budget is $6 Billion; and yet they can't find the $300K to support the SF Botanical Garden? In the meantime, personnel costs keep skyrocketing. Politicians keep hiring their cronies. For example: a local politician served before there was a law providing for healthcare benefits upon retirement for politicians. So he was hired for a month on the City payroll; his previous service counted, and voila! Now he has subsidized healthcare for the rest of his life. Lucrative Parking Garage management contracts are awarded at below market rates to cronies, who make a tidy profit.
Abuse is rampant all across San Francisco. The only way to stop is to stop the flow of funds that enables such abuse.
[edit: I had written 34,000 earlier; corrected it to 14,000 City employees]