San Francisco voters will indeed be asked to tax themselves this November — always a fun proposition in a recession — but not to the extent originally feared by Mayor Gavin Newsom, the Chamber of Commerce and other tax haters.
Only one tax — a tax on real estate sales of $5 million or more, proposed by Supervisor John Avalos — was forwarded to the ballot on Tuesday. A parking tax, proposed by Supervisor Ross Mirkarimi, and a combination payroll/commercial rent tax, proposed by Supervisor David Chiu, were both dropped.
Supervisors in the progressive camp — of which Avalos, Chiu and Mirkarimi are all card-carrying members — have long said that they want to find a way to raise $100 million of new, ongoing revenue.
This is seen as the only long-term solution for the city’s dire finances following a series of brutal budget years. Beginning in 2008, Newsom balanced repeated deficits — exceeding $500 million in the last two years, with similar deficits projected for the next few fiscal years — with budget cuts and additional fees, Avalos said.
“We have cut to the bone,” said Avalos, whose tax would raise $35 million annually, according to a report from the Controller’s Office.
Supervisors voted 8-3 to put the real estate property transfer tax on the ballot. Supervisors Sean Elsbernd, Michela Alioto-Pier and Carmen Chu, all Newsom allies, voted against the tax measure.
It remains to be seen exactly how Newsom will react to having a tax measure on his city’s ballot. The mayor has said that the Board must drop the tax measures before he would agree to sign the budget or to spend the monies included therein (the City Charter says that while the Board appropriates money, only the stroke of the Mayor’s pen will guarantee that the money is spent).
Newsom stands firm that new taxes are not needed, according to mayoral spokesman Tony Winnicker. “The Mayor trusts the voters to decide whether new tax increases are wise amidst a lingering economic recession and a still-jobless recovery,” Winnicker wrote in an e-mail, before naming a veritable shopping list of long-term revenue fixes like labor concessions and the smallest City workforce since 1998.
“Every year a deficit is projected and for the past five years we’ve balanced the budget without new taxes and without appreciable service reductions, we’ve even expanded education, capital and other programs,” Winnicker wrote. “We will do the same again next year, as we’ve always shown we can. The deficit is NOT the $700M that some still use; it’s well below that as a result of the approval of the balanced budget today.”