City Hall right to kill business fee

The longtime trend of City Hall routinely ignoring the effect its new laws would have on San Francisco’s economy and businesses has picked up steam in recent months. It has reached the point where major business groups took the unprecedented step of suing The City to force it to abide by the will of the voters and consider the economic impacts of legislation before it is passed.

But it is time to give credit where credit is due. In one instance this week, local officials found a solution that didn’t involve tapping the business community for funds that should rightly come from The City’s budget.

When voters passed a new minimum wage law in 2003, the city controller warned that it would take several hundred thousand dollars to enforce. The Board of Supervisors supported the measure en masse, with members making no mention of funding issues.

Since then, however, the local agency charged with monitoring the new law, the Office of Labor Standards Enforcement, has been unable to effectively oversee The City’s minimum wage, which is now $8.82 per hour, or investigate complaints from workers who said they were being paid less than that.

City Hall’s reaction to that obvious flaw in its own planning and allocation of resources was one that has become far too typical — simply make businesses pay for additional city staff to monitor the new wage, with an annual fee on businesses that would amount to more than $1 million a year on top of the business taxes and fees merchants already pay.

Never mind that most city businesses are small, neighborhood-based shops for whom any new fee eats into small profit margins. And never mind that the vast majority of businesses are following the law, and that the fee would essentially penalize the many businesses that did nothing wrong for the actions of a few. The Examiner denounced the plan and urged the Board of Supervisors to reconsider.

On Thursday, Mayor Gavin Newsom said he had come to a compromise with Supervisor Sophie Maxwell, the sponsor of the plan, that would remove from businesses the additional fee burden. In return, Newsom agreed to direct $235,000 from the city budget to hire four additional enforcement officers, bringing the total to seven.

In the context of other big-ticket legislation that hits merchants’ pocketbooks much harder, such as the current health care proposal for the uninsured that could cost businesses an additional $270 per month per employee, the minimum wage enforcement fee is a relatively small item. But at least in this one case there was a recognition that San Francisco’s businesses deserve to be seen as more than just a cash cow for city coffers. Kudos to Mayor Newsom and Supervisor Maxwell for that nod to the lifeblood of our city.

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