The day before San Francisco’s largest public-employee union plans to protest the mid-Market Street tax break — better known as the Twitter tax break — Mayor Ed Lee stepped out ahead of the event by praising the economic benefits of the policy.
The debate strikes to the very heart of the ongoing conflicts between the tech industry and longtime residents who feel the economic pinch from a soaring cost of living, higher rents and more evictions. It also rekindles the debate from 2011, when the Board of Supervisors approved the tax break for companies hiring new employees in the mid-Market area.
On Monday, Lee celebrated the tax break by pointing to a host of economic successes it helped deliver.
“We will not turn back the clock on our promising efforts to create a healthy, vibrant and economically diverse community,” he said.
So while some cheer the tech boom for lifting The City out of the Great Recession while other locales nationwide are still struggling, others blame the industry’s success for making it more difficult to afford to live in San Francisco.
Today, Service Employees International Union Local 1021, which represents an estimated 12,000 government workers, is expected to hold a rally at City Hall and a march to Twitter headquarters at 1355 Market St. calling for an end to the tax break. It is timed with Tax Day.
Larry Bradshaw, a paramedic and vice president of Local 1021, said the mayor’s praise of the policy shows he is “out of touch.” Bradshaw even referred to him as “Mayor Antoinette,” conjuring up the former queen of France who was reviled for her excessive lifestyle while many struggled to get by.
“The mayor is so focused on the golden goose he’s ignoring the downside,” Bradshaw said.
But mayoral spokeswoman Christine Falvey said the mayor is very much focused on an affordability agenda, which includes raising the minimum wage for private sector workers with a November ballot measure, building more housing and clamping down on real estate speculation through state reform of the Ellis Act.
At the same time the union is rallying and pointing fingers, it is asking for a 15 percent pay raise over three years and other benefits totaling $356 million as part of ongoing contract negotiations with The City. The union argues ending the tax break would help lower The City’s deficit and free up money for services and pay.
While the tax policy was aimed at promoting the tech industry, Bradshaw argued that today’s tech boom “would have occurred without the tax break.”
But Falvey said the tax break has succeeded where past revitalization efforts have not. Since 2011, 18 tech companies have moved into the mid-Market area, comprising 13,000 jobs. There are 5,000 housing units under construction, with 26 percent of them earmarked at below-market rate. And with 17 small businesses opening in the area, storefront vacancy has decreased from 30 percent to 22 percent.
Also, The City has collected $8.4 million in additional revenue from increased property and real-estate-transfer taxes in the mid-Market area, according to the Mayor’s Office.