With the controversial “Twitter Tax Break” program that allowed Mid-Market businesses to skirt millions of dollars in payroll taxes nearing its sunset, the district’s supervisor on Tuesday called for a hearing on the incentive program, which he described as falling short of its goals.
The Central Market Tax Exclusion deal, brokered by the late Mayor Ed Lee, granted companies with more than $250,000 in payroll moving into mid-Market buildings a temporary exemption to The City’s 1.5 percent payroll tax. The program is set to expire on May 20.
Approved by a divided San Francisco Board of Supervisors in 2011 under the threat of Twitter leaving The City, advocates hailed the program as a necessary strategy in ensuring continued job growth in the tech sector. The program was intended to revitalize the parts of Mid-Market and the Tenderloin, which are now home to tech giants like Twitter, Uber, Zendesk, Airbnb and Square.
But eight years later, support for renewing the tax break appears weak, with many blaming an influx of high-paid tech workers for exacerbating housing and affordability crises that continue to displace middle and low-income residents and workers.
“The hope was that this tax-break would lead to well paying jobs for residents and spur a growing economy to fill vacant storefronts and create new businesses in an area of the city that had been especially hard hit by the economic downturn,” said District 6 Supervisor Matt Haney at a Board hearing Tuesday.
“I don’t know if the Twitter-Tax Break met all of its goals, I have a lot of questions about that,” said Haney, adding that he has yet to hear “anyone say that we should renew it.”
“Based on what I know, I’m definitely not advocating for its renewal,” said Haney.
Citing U.S. Department of Housing and Urban Development data, Haney said that a family of four making $117,000 annually is now “considered low-income,” and The City’s median income for a single adult is “breaking $100,000,” compared to $73,000 in 2012.
“At the same time, housing costs continue to rise and squeeze what was once a robust middle and working class, forcing them out of San Francisco, and in some cases onto our streets,” he said.
Haney said he hopes to discuss future strategies to address equitable development in an area “rife” with vacant storefronts, empty lots, where very few residents actually “have had access to high paying, high skilled jobs in these companies, let alone our talented young people from our city’s public schools.”
Haney also plans to examine data on the number of jobs created by the tax break, whether The City’s loss of revenue was offset by private investment and job creation, what benefits were promised as part of mandatory community benefit agreements with companies that profited from the program and whether these benefits were delivered.
A date for the hearing has not been set.