Report: S.F.’s zeal for revenue from businesses may drive them away

San Francisco may lose downtown businesses if city government continues to “lean” on them for revenue, claims a report issued by the Committee on Jobs, a coalition of The City’s largest employers.

The report, dubbed “The Budget that Ate San Francisco,” is intended to convince city government that businesses are paying enough, and perhaps too much, already.

The report comes as the Board of Supervisors considers requiring businesses to pay hundreds more dollars a month to provide mandatory health care for employees.

According to the report, downtown businesses — those located in the Financial District and Union Square area — paid more than one-third of the $1.3 billion that The City collected in business taxes during the fiscal year that began July 1, 2004.

“Businesses pay enough. When is enough enough?” Committee on Jobs’ Executive Director Nathan Nayman said. “There will be a tipping point. And that tipping point is when businesses say, ‘We will not renew our leases and we will go somewhere else.’”

But Board of Supervisors President Aaron Peskin maintains that San Francisco’s larger businesses have been on a “tax holiday,” especially since there “has been a full business recovery” following the dot-com crash of the early 2000s.

Peskin dismissed the report’s findings. “This is the same old tired rhetoric from some of the richest corporations in America who don’t want to pay their same share, who make hundreds of millions of dollars in San Francisco and are so greedy that they don’t want to give back an appropriate sum to allow The City to survive and to shine,” Peskin said.

But Nayman said The City needs to cut back on its spending, not boost it by having businesses foot more of the bill.

In the 2004-05 fiscal year, downtown business accounted for half, or $132 million, of The City’s collected payroll tax, 80 percent, or $87 million, of the collected hotel tax and $41 million in sales tax, according to the report. At 8.5 percent, San Francisco’s sales tax rate is one of the highest in the Bay Area.

Downtown businesses should pay more since they enjoy a “highly disproportionate amount of [operating] fund services such as Muni, traffic cops and street sweepers,” Peskin said, adding, “The good folks of the Sunset and North Beach would kill to have the level of services that downtown enjoys on a daily basis.”

jsabatini@examiner.comBay Area NewsGovernment & PoliticsLocalPolitics

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