Previously: Anticipation Rises For Newsom’s State Of The City Address Tonight

Elsewhere: Economy the Focus of Newsom’s State of City Address KCBS, State of the Mayor is fine indeed Chron, Newsom gives his ‘State of the City’ ABC7, S.F. Mayor Newsom’s No. 1 priority: jobs Chron

With San Francisco facing a half-billion-dollar budget deficit, Mayor Gavin Newsom today pledged to make job creation and new business development his priorities in his final two years in office.

Newsom made the remarks this evening during his annual State of the City address, a nearly hour-and-a-half-long speech at the Asian Art Museum located opposite City Hall.

Despite signs of recovery from the economic recession, “There’s still a lot of anxiety,” Newsom said. “There’s still a tremendous amount of uncertainty.”

Newsom’s new local economic stimulus plan for the city will include no taxes on new hires for two years; tax credits for small businesses with 21 to 49 employees that offer health care to their employees; and an extension of a payroll tax exclusion for biotech companies until 2014.

“We not only need to attract businesses, we need to retain businesses,” he said.

The plan will also include an “innovation fund” offering $11.5 million in loans to new and existing clean technology, biotech, new media and information technology businesses in the central and southeastern parts of the city. Newsom said the fund would provide jobs for low-income people.

Newsom’s plan also features $11.5 million for redeveloping the mid-Market Street area in downtown San Francisco to return it to “a shining retail and entertainment district” with affordable housing and transit-first policies.

Newsom additionally wants to accelerate capital construction and make sure local firms are competitive on those projects; to pass a $652 million jobs and infrastructure bond for seismic and public safety on the June ballot; and to allocate $5 million for GoSolarSF, which offers discount solar power products.

“By focusing all our energies on creating jobs and economic growth and by investing in people and place, together we will overcome the challenges we face today and emerge a global leader for innovation and investment,” Newsom said in an earlier prepared statement provided by his office.

“There’s a limit to how much more we can tax and cut, but there’s unlimited potential in how much more we can create jobs and grow our economy,” Newsom said.

In his speech, Newsom cited several successes, including green job programs and the city’s strict environmental building standards; the planned closure of the city’s last power plant; a reduction in crime in the past year; redevelopment projects on Treasure Island and in Hunters Point that he said will bring thousands of jobs to San Francisco; and Healthy San Francisco, the city’s new public health care program.

The remaining focus of Newsom’s address was on education, homelessness and government and budget reform.

Newsom plans to address chronic truancy and low graduation rates in some San Francisco schools, especially in underprivileged communities, with the launch of the Truancy Abatement Resource Center.

The center will be a joint effort of the city’s Juvenile Probation Department, police, city providers and the school district.

It will offer a drop-in facility to provide resources to truant youth, to include “creative incentives” to keep students in school, according to the mayor’s office.

Newsom also pledged a 50-percent reduction in street homelessness and a 30-percent reduction in overall homelessness by the end of the year.

“I don’t think we can solve this problem, I know we can solve this problem,” he said.

As part of that pledge, he said he will make Project Homeless Connect, begun in 2004, a permanent program. By the end of the year, in addition to 24-hour drop-in service and referrals, it will become “a full-fledged response to the root causes of homelessness,” including help for those with substance abuse and mental health issues, the mayor’s office said.

The city’s $500 million estimated budget deficit for the coming fiscal year will require “painful choices,” including service cuts and the need to find new revenue sources, according to Newsom.

“My focus, and the focus of this budget, must be reform,” he said. “We cannot tax our way out.” Instead, he cited ongoing efforts to streamline city government and cut overtime.

Another major issue will be reform of the city’s pension program, costs to the city of which are expected to balloon to $1.4 billion in three years, Newsom said.

Newsom said earlier that he will oppose any “must-spend” legislation offered by the Board of Supervisors, which he argues would “hamstring” his office’s ability to respond quickly to fiscal crisis. He added that such legislation would require him to spend money the city doesn’t have, and jeopardize the city’s credit ratings.

Newsom will hold a series of budget town-hall meetings in February to address the latest budget projections.

He closed his address on a hopeful note.

“If we can remain hard-headed, but at the same time big-hearted, then I promise you, the best is yet to come,” Newsom said.

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