End corporate welfare

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EDITORIAL Big, powerful corporations seem to always find a way to get what they want out of City Hall, particularly under the administration of Mayor Ed Lee, and often at the expense of people who really do need the help.

For example, why is a city that projects annual budget deficits getting steadily bigger over the next five years spending almost $17 million annually on corporate welfare programs, including giving millions of dollars in tax breaks and other city perks to Twitter, a company worth $24 billion?

The Twitter-inspired payroll tax exemption zone in mid-Market cost the city more than $4.2 million last year, reaped by just 11 companies and their landlords (Twitter saved another $570,000 last when its stock options were exempted). By contrast, a tax break for small business in San Francisco cost the city almost $5.3 million last year, but that was spread among 2,488 businesses with less than $500,000 in annual revenue.

They're all part of a package of business tax cuts that makes no sense in a city with record low unemployment and an overheating economy that is driving up rents and the cost of living. The tax breaks reported by the Tax Collector's Office on June 23 even included a law adopted in the '90s that requires the city to cut $3.5 million in tax rebate checks to employers when tax revenues rise more than 7 percent.

Yet the city desperately needs that money. It is still facing a $330 million budget deficit in just a few years, as well as huge funding shortfalls for Muni and the water, power, and sewer services operated by the San Francisco Public Utilities Commission.

The SFPUC could have made money with its CleanPowerSF program to generate and sell renewable energy, but Mayor Lee sabotaged that program as a favor to Pacific Gas & Electric Co. As the San Francisco Chronicle reported on June 23, Lee has close and symbiotic relationship with PG&E, which funds Lee's pet projects and so he shields the utility from competition, even at the expense of the city's budget and greenhouse gas reduction goals.

Last year's $17 million in corporate welfare didn't even include the $5.5 million city taxpayer subsidy for the America Cup's, where one the richest men in the world, Larry Ellison, was defending his title yet hoarding his cash. If the Mayor's Office had its way, Ellison and his cronies would also now control Piers 30-32 and other valuable Port of San Francisco properties.

The Board of Supervisors thankfully shot down that proposal, but the Port is still way too beholden to wealthy suitors who want to appropriate waterfront property, a point that the Civil Grand Jury made last week in a report calling for reform, including giving the board two of the five appointments to the Port Commission. That's a good idea that we should also apply to the SFPUC and SFMTA boards, which carry out the Mayor's Office agenda on behalf of the rich.

The corruption and political giveaways have gotten obscene and something has to change.

Comments

Posted by Guest on Jun. 25, 2014 @ 5:57 am

What is the City budget now, ~$7 billion? ~$8 billion? That is mostly payroll and benefits. $17 million is a tiny fraction of that. Once the City government changes its goal to providing services to residents rather being a mechanism to employ as many public employees as possible and deliver them salaries and benefits that most private sector employees don't receive, the argument would have more credence.

Posted by The Commish on Jun. 25, 2014 @ 9:30 am

It's a lot more than the city would have gotten in revenues had they not cut a deal to keep the tech companies in SF

Posted by Guest on Jun. 25, 2014 @ 9:45 am

is the cities biggest welfare client.

Posted by Guest on Jun. 26, 2014 @ 6:11 pm

Agreed. We should end corporate welfare. But it's so confusing because I see libs an progressives fighting for corporate welfare CONSTANTLY. Where you ask? Following are all examples of corporate welfare - these just don't fit the narrative SFBG is pushing with their group think "do as i say, not as i do" bs:

http://www.sfbg.com/politics/2013/12/05/marcus-books-can-stay-if-it-can-... - promoting outside funds to sustain a failing business model

http://www.sfbg.com/2013/04/09/cost-fake-cabs - artificially inflating the value of a private property right via the cab medallion that is a product of a state sanctioned anti-competitive market

promotion of the state subsidization of minority owned businesses for no reason other than they have more melanin in their skin that other business owners

promotion of the state subsidization of LGBT corporate interests

The list goes on and on. When will progressives knock it off with the endless corporate welfare?

Posted by Guest on Jun. 25, 2014 @ 10:53 pm

None of the examples you cited are corporate welfare, which are government subsidies of profitable business entities, which is closely related to crony capitalism. There is and always will be a legitimate state interest in regulating commerce and ensuring fair competition (yes, even when it compensates for historic racism that still hinders the progress of many minority-owned businesses today). You seem to believe in a libertarian fantasy world where all competition is fair and the government has no role to play, even though it clear that big corporations manipulate markets and stifle competition. The point of this editorial was that wealthy, politically connected corporations, investors, and landlords shouldn't be getting public subsidies.

Posted by steven on Jun. 26, 2014 @ 12:09 pm

racism? The very premise of that store is that race is significant.

Posted by Guest on Jun. 26, 2014 @ 12:34 pm

1. The business model is dead.

2. The business owners made moronic business decisions and then wanted a do over.

Race has nothing to do with those two things.

Posted by Guest on Jun. 26, 2014 @ 6:08 pm

Just because the owners of MB's business model was based on focusing on a group that composes less than 6% of the city's population (and is still shrinking), are in a field where even large corporations are going out of business, and owned their building, took out the equity to fund who knows what, had to turn it over to the bank who then sold it to someone else, and then couldn't pay their rent doesn't mean that it's their fault. Think about it. Black people can't make poor business decisions without it somehow being racism's fault. Duh.

Posted by Guest on Jun. 26, 2014 @ 6:24 pm

How much will Twitter be paying into the city budget over those five years? Let's just say for the sake of argument, 20 million. You say that Twitter will be getting millions in tax breaks. So instead of the city getting say 25 million it gets 20 million instead. You know how much SF would be getting if they didn't give Twitter those tax breaks? ZERO.

You keep complaining about how Twitter and other tech companies keep getting tax breaks. But you never talk about how there would be no money from them AT ALL if they moved somewhere else like say... Brisbane? How big would the budget shortfall be then?

Posted by Guest on Jun. 26, 2014 @ 6:34 pm

Contribute $$ to candidates for public office and get a big return, in other peoples money, for ur investment.

And why not, fools keep voting for them?

Posted by SFTPARTY on Jun. 30, 2014 @ 9:25 am

How much is the city paying to subsidize all of the pointless non-profits that grow like weeds in SF? I'm guessing more than $17 million.

Posted by Chromefields on Jun. 30, 2014 @ 12:20 pm

only because the employees of non-profits do not enjoy the insane benefits of city workers and are not represented by SEIU.

Posted by Guest on Jun. 30, 2014 @ 12:43 pm

It seems the choice offered is to throw a $100 bill in the garbage, or burn it.

Posted by Chromefields on Jun. 30, 2014 @ 1:14 pm
Posted by Guest on Jun. 30, 2014 @ 1:36 pm

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