The proposed ordinance “amending Article 12-A of the Business and Tax Regulations Code by adding Section 906.3 to establish a payroll expense tax exclusion for businesses located in the Central Market Street and Tenderloin Area,” unfortunately better known as the Twitter Tax Break, is on the agenda for San Francisco’s Board of Supervisors this afternoon.
The proposed payroll tax exclusion would be in effect for eight years although any one company could only claim the benefits for six. And the exclusion only applies to the payroll taxes on net new hires, a company’s current payroll tax expense would be frozen for the duration of their benefit period. In the case of Twitter, their payroll tax would be frozen at roughly $535,500 per year (350 employees and an average annual salary of $102,000). Due to the heavy implications that comes with taxes, most companies try their luck with outsourcing payroll since there are a variety of benefits to doing so.
To address Twitter’s “concerns regarding public safety, transportation, and neighborhood conditions” in the area, the City has also agreed to expand the Mid-Market police foot patrol boundary a block from 9th to 10th street and provide a express service 47A bus line between the Caltrain Station and the Civic Center BART Station at 9th and Market during prime commuting hours at a cost of approximately $234,000 per year.
The “twitter” tax break should extend to every sized business in San Francisco.
definitely agree with kathleen on that.
^^^If you do that^^^, you’ll get happy landlords (good paying tenants, yeah!), happy companies (less taxes, yeah!), happy employees (hipsters love their downtowns, yeah!), but a bankrupt city with awfully bad services like bad roads and less than thorough cleaning.
It’s all about the balance and for once I agree with the city’s plan. Gentrification would be a good thing there. SROs and people hugging nearby social services will still be there, no worries. It will still be a very diverse area.
“less than thorough cleaning”
Are you referring to the city itself or the people who are encouraged to hang out in the Tender?
Do not forget the sage warning of Daly: drug addicts and prostitutes need a place to live too.
@lol:
“bad services like bad roads and less than thorough cleaning.”
I hope you’re being sarcastic there… since when were the roads good and the city clean?
I don’t think we need higher taxes, just more efficient use of the taxes we already collect, and far less waste/bureaucracy.
And honestly, if it does result in a bankrupt city with happy residents/workers/property owners, I’ll take take it!
We all want a working city. How would you get your permit? Would you feel safe at night with a police force cut in 1/2? How about closing a few more firehouses? Your kids don’t need schools I hope. You love 4” potholes? Try 8” potholes. What about corruption? With city furloughs, you’d see a lot of influence peddling and “pay-to-play”.
@lol cut all the BS social services stuff, then there wouldn’t be a need for reductions in police/fire/medical coverage.
Ever wonder why other large cities don’t have the “problems” SF does? The answer is pretty obvious. Too much big money going into private hands (corp or charity) to change anything about it though.
There’s a lot of waste that can be cut in SF before you need to cut any necessary services.
as far as ‘What about corruption? With city furloughs, you’d see a lot of influence peddling and “pay-to-play”.’
I believe all of that is already quite in force. I think that the more money the city has floating around, the more prevalent those problems are.
This is an old article but it points out a lot of SF’s issues, and I don’t think it’s due to a lack of tax revenue, just piss-poor management.
lyqwyd, you don’t know how good we have it, either in terms of maintenance or corruption.
Service/benefit cutters all work in the perfect void, with big theories on how things should work were they in power. Then they get to power like Schwarzennegger. 8 years later they end up failing miserably on their agenda while leaving a big mess that others have to clean-up. When the successors try to do the clean-up, the same FauxNews BS comes back shouting “cut, cut, cut”.
You understand the irony, right?
cut all the BS social services
Then you have to do something with the people that you send in the streets. Do you have a solution? I am also pretty pi$$ed at the homeless situation or social services largesse. But until someone has a realistic solution apart from pseudo-tough-guy-stance that you guys know will not work in a democracy, that’s all we can do.
About corporate charities, I agree this sucks too. Cut billions in corporate taxes while they trickle back down a few millions like GAP and such to their pet top-heavy charities.
The governator failed because he was a bad governor who never should have been elected in the first place.
The problem with stuff like payroll taxes is that it creates a pay to play, no big company moves to SF without getting a special tax exemption these days, and many big companies threaten to leave if they don’t get a tax exemption of some sort. So basically anybody who isn’t powerful or connected winds up paying high taxes, while those that are powerful or connected get special treatment.
As I said, I don’t believe SF’s problem is lack of tax revenues, it’s poor management, as is abundantly documented in the article I posted above.
As far as the homeless problem, there are many success stories with regard to improving the situation in other cities, I personally like the carrot and the stick approach, but adopting any successful strategy is fine with me. What is very clear is the approach we have in SF currently is a complete failure and needs to be drastically changed.
Also note that cutting social services is not the only way to cut waste. Remember when it turned out MUNI was paying the police tens of millions of dollars a year for services it wasn’t receiving? There’s tons of stuff like that. Just cutting mismanagement like that would probably save hundreds of millions of dollars a year.
Huh. Good for Twitter for voicing safety concerns. Hopefully that’ll all go through and everyone who lives in the area will benefit. I’d love to be able to walk through Civic without getting accosted or having to avoid urine, etc.
Hah, so not only do they want a break on the payroll tax, they want free cops, too! I predict the pull of the Twitter Holiday party will be too much for the supes to resist. If you’re going to be corrupt, you might as well be obvious about it.
The unfortunate reality of the post-Lanterman–Petris–Short Act state we live in is that it’s actually cheaper for The City to house the homeless than it is to send people into the streets. And that’s because sending people out in the streets doesn’t mean they go away, it means that they end up having to consume (more) costly public services. From The Cron:
I’m no knee-jerk liberal supporter of endless homeless services, but you can’t just let anger and resentment (“cut all the BS social services stuff”) get hold of you when it comes to public policy.
Also, according to the same article, at least until recently The City took a significant number of people off the street by giving them a bus ticket home.
I’m not opposed to providing services, like I said, carrot & stick. I am opposed to continuing to spend hundreds of millions a year on failed programs.
Only if you substitute them with something viable.
Shutting down most loony bins 40 years ago looked like the sensible thing to do. Costly, inefficient, inhumane. Close them and manage people as outpatients. Fast forward today: no sustained solution has been really found. Or the ones that were found were defunded, because that’s what deficit hawks do: use a system’s core flaws to break a big program into smaller pieces that are then easier to shut off for extra savings. Watch out Medicaid and Medicare. Next will be SS. It starts with social services. But the real goal is to privatize and conquer.
Yes, of course, as I said I’m not opposed to services, just ineffective ones.
I’ll even pay higher taxes if it took care of the homeless problem, but I’m not OK with paying taxes for programs that don’t work.
Brahma, I’ve read those studies about homeless on the streets costing more, but there are all kinds of subsidies in this city that drain a lot of funds. For example, all the so-called affordable housing might keep some seniors in SF instead of in the East Bay, but we should really reconsider whether that’s a good idea or not. I agree with scurvy that way too much money goes into the non-profit industrial complex and its cronies to really change this quickly.
There are police foot patrols below 9th?
Well sfrenegade, I don’t know that this thread is the correct one to kick around ideas about how to economically house the poor elderly (but perhaps the 701 Golden Gate Avenue thread is), but in either the case of the poor elderly or the poor and/or untreated mentally ill homeless, it’s not at all clear that all those less-expensive-to-live in East Bay cities want to house the poor of The City. They have their own to deal with.
I don’t recall the specific law at all, but I think I remember that the State requires every municipality to deal with their own homeless specifically to thwart the common practices of the seventies, where cities that had large numbers of relatively wealthy white people would regularly have police arrest and dump homeless people in larger cities that weren’t so affluent.
I’m conflicted.
On one hand: let’s give them the tax break for moving into that area. This seems like a good idea especially if the same opportunity is granted to any other business that creates new jobs in the area.
On the other hand: First, tell them we have a SWEET deal which gives them a zero % tax rate on the first 15 billion dollars of income. Then give them a pat on the back and GE’s phone number.
I don’t know…. the problem with tech companies (and their employees) is that all they want to do make a lot of money, look good, enjoy the views and hit the road. No one want’s to stick around to make sure SF is better place than when they found it.
“No one want’s to stick around to make sure SF is better place than when they found it.”
South of Market already is probably better than they found it. 🙂
@VancouverJones
“all they want to do make a lot of money, look good, enjoy the views”
as opposed to all non-tech companies and their employees who want to make no money, look bad, and stare at a dirty hole all day.
Please: if you’re going to stereotype, at least have something useful to say.
i love that the average pay is $100K+ for a useless service.
Not having looked at Twitter’s books, I’m still comfortable guessing that the average annual salary of $102k figure is probably the “all in” cost of compensation including base salary, employer’s contribution to health care plan, employer’s contribution to 401(k) (i.e., matching), all of the accounting mechanisms for stock options in in lieu of bonuses, etc.
I agree with spencer, however, that I am not a fan of Twitter and I think as service it’s pretty useless (Do the Internet really need to provide a more efficient channel to the Id of Charlie Sheen?). And I’ll still think that if they have a successful IPO inside of three years and are profitable with a $1 Billion valuation in five.
useless service?
I guess the web looked useless to you in 1994.
Plus good coders can make way more than 100K. Management cannot decently make less than coders. Therefore I think 102K is gross salary average.
Approved 8-3. Avalos, Campos and Mirkarimi voted against.
Good luck recruiting twitter. I sure as hell don’t want to work in that neighborhood and deal with that drama every day….
@anon
we’ve already had that discussion on the other thread
anon wrote:
Uh huh. Well, twitter had already signed a letter of intent before the vote took place. And now it’s a done deal; from today’s Los Angeles Times’ Technology blog, Twitter signs new lease to keep headquarters in San Francisco:
I’m still not a fan of Twitter as a service, but I understand the rationale behind the tax break and I think it’s within reason that they got it, as opposed to other companies who are profitable and not in start-up mode.
Congrats on shrewd business savvy to Douglas Shorenstein and company (from The WSJ Deal of the Week blog back in March):
Pretty gutsy play, but it ultimately worked out for them.