S.F. Mayor Newsom's No. 1 priority: jobs
State of the City focuses on S.F.'s economic comeback
Published 4:00 am, Thursday, January 14, 2010
San Francisco must jump-start its economy through job creation and make it easier to do business in the city, Mayor Gavin Newsom said in his penultimate State of the City address Wednesday night.
The city now has more than 40,000 unemployed residents, 11 million square feet of vacant office space and a deficit of $522 million for the 2010-11 fiscal year. Newsom discussed several new measures designed to promote job creation and business development, rather than focus on tax hikes to get the city out of its economic doldrums.
"I have not met one human being who says we're undertaxed in San Francisco," he said.
The mayor, who will be termed out of office in two years, gave his speech at the Asian Art Museum to an audience of about 200 people, mostly city officials. He was remarkably sunny throughout the 80-minute address, ticking off a long list of achievements and only spending 90 seconds discussing the city's worst budget deficit in decades.
"I'm not going to burden you with a budget speech," the mayor said.
To some in the audience, the omission was glaring.
"I don't know that we can talk about the state of the city without talking about the budget deficit and what we're going to do about it," said Supervisor David Campos.
Newsom highlighted several new initiatives, including legislation to require owners of soft-story properties to seismically retrofit their buildings. He also discussed plans for a daily, around-the-clock version of Project Homeless Connect - a bimonthly one-stop shop for the homeless to access services - in the Civic Center. Another initiative is a new drop-in facility at 44 Gough St. to serve truant students.
But the majority of Newsom's initiatives focused on job creation. The mayor announced that businesses won't have to pay the city's 1.5 percent payroll tax on new hires for two years - and companies new to the city won't have to pay any payroll tax during that time.
Small businesses that are required to provide health insurance for their employees as a component of the city's universal health care program will get a $2,000 annual tax credit.
And biotech companies, which have been given a 7 1/2-year pass on payroll taxes since 2004, will still qualify for the perk as long as they open in San Francisco by 2014.
Those three tax initiatives have been introduced by the mayor as legislation at the Board of Supervisors and need their approval.
The city is also using $23 million obtained but never used by the previous mayor from the U.S. Department of Housing and Urban Development to promote job growth for low-income people.
The money will be used to give loans of $50,000 to $1 million to businesses for capital improvements, purchasing equipment and expanding their payroll. The only requirement is that the businesses prove they employ low-income people and are based in a certain geographic area.
Half the money will be used to create an "Innovation Corridor" stretching from South of Market to Bayview-Hunters Point and will target green tech, biotech, digital media and information technology companies. The other half will be used to fill vacant storefronts in the mid-Market and Tenderloin area and to promote an arts district there.
"It's becoming clearer in everyone's mind that until we put people back to work, we will not have a recovery," he said. "We have to give employers a reason to add a new job in San Francisco."
But board President David Chiu said they amount to "tax giveaways" to businesses.
"In the context of the largest budget deficit the city has seen in recent years, we have to be very careful about this," Chiu said.
He added that the mayor's rosy speech left out Muni's poor on-time performance, the condition of the city's streets and its high unemployment rate. "We have a lot of challenges in front of us," he said.