San Francisco Mayor Gavin Newsom unveiled a new strategy for addressing the city's economic woes, with a focus on expediting infrastructure projects and granting loans and tax credits to local businesses.
Newsom addressed business leaders this morning at the San Francisco Business Times' Annual Mayors' Economic Forecast in downtown San Francisco. The event was also attended by Oakland Mayor Ron Dellums, who outlined his views on that city's fiscal emergency.
Newsom, who earlier in the morning described the federal government's economic recovery package to reporters as "reasonably comedic" in terms of addressing San Francisco's economy, later added, "I have heard nothing ... from the state of California about a local stimulus plan."
The city faces a $576 million budget deficit, by current estimates.
"We're on our own," Newsom said. "It's decisions, not conditions, that determine our fate and our future."
Newsom's new plan, the second phase of an economic strategy he first outlined in October, centers on revenue growth and job creation, and stemming job losses, he said.
A key area of the plan involves amending city code to expedite billions of dollars in already funded and ready-to-begin local infrastructure projects, including the $4.3-billion rebuild of the Hetch Hetchy water system, a $383-million San Francisco International Airport terminal rebuild, a new headquarters for the San Francisco Public Utilities Commission and the nearly $900 million rebuild of San Francisco General Hospital.
Another facet is investment in local businesses, including a two-year payroll tax credit for new jobs for businesses; a tax credit on locally made purchases of new equipment; and about $23 million in zero-interest loans to local businesses.
Other parts of the plan call for strengthening the city's marketing campaigns to tourists and shoppers, stepping up outreach to businesses in the Latino community, organizing job fairs, and teaching employers how to better take advantage of state and federal tax credits.
Another program being developed would allow commercial landlords to offer rent-free, short-term leases to local artists for space in vacant storefronts.
Newsom said his plan -- which he said was "fully paid for" -- was about a "commitment to take responsibility ... and not wait for someone else to solve our problems for us."
Newsom said he is optimistic that San Francisco, which has been relatively sheltered from the economic downturn compared to the rest of the state and country, will "ride this out."
He cited the area's investment in biosciences, as well as green technologies such as solar and wind power, which he said "will be a big part of our economic development strategy."
Newsom also touted new economic partnerships with China, India and other parts of Asia.
"You can slash and cut, or you can invest and grow," Newsom said. "We have got to focus on the latter."
Newsom also reiterated his opposition to a June 2 special election, despite having his veto of Board of Supervisors' legislation on the special election overturned by the board on Tuesday.
He said he was particularly against proposals to increase the sales tax, with possible pending increases on the state level.
"Nothing would be more damaging," he said, than to have San Francisco's sales tax jump to over 10 percent.
"Poor folks pay more in sales tax and excise tax than anyone else in this room," Newsom said.
Among various tax measures being considered for a special election are a gross receipts tax on large corporations and a half-cent sales tax.
Board President David Chiu introduced legislation, also on Tuesday, that could set the special election date as far back as Aug. 31 in an effort to try to build a citywide consensus between business and labor groups on how best to address the budget.
Chiu said both sides agreed at a Sunday meeting with supervisors that any local economic package must include "structural reforms, layoffs and wage concessions, and new revenues."
Dellums said today that conservative estimates show his city is facing a $50 million deficit in the coming year, and a $57 million deficit the following year.
He said there might have to be further layoffs and government cutbacks.
"We're going to be looking at some very difficult choices," Dellums said.
Dellums said he hopes the federal government will realize the need to send more money directly to cities to address infrastructure needs, poverty, green jobs and health care.
"My view is that the metropolitan areas and the cities really are not the problem, they are the solution," he said.
Dellums said his view is that tax rebates currently included in the federal stimulus might help some small businesses, but "don't really do a lot to stimulate the economy."
Dellums said he does anticipate federal money coming to Oakland for school construction and green jobs.
"But the immediate impact is not going to help us address the deficit need," he said.