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- June 19, 2012By Corey Marshall, Good Government Policy Director
The shortest primary ballot in 16 years and the lowest turnout ever (30.83 percent) for a presidential primary. San Francisco’s ballot is experiencing a lot of interesting firsts in recent elections, but while the number of measures appears to be dwindling, their content is consistent: expensive implications.
This election, San Franciscans considered two proposals to change city services. Proposition A, a proposal to require the city to use competitive bidding in the award of contracts for waste collection, was defeated by 76.6 percent of the vote. Proposition B, a nonbinding policy statement to restrict commercial activity in Coit Tower, a popular tourist destination that has degraded with time, passed with 53.5 percent of the vote. SPUR opposed both propositions.
The results of Prop. A were very similar to previous attempts to change how waste is collected in the city. Efforts in 1993 and 1994 both went down to similar margins of defeat. But while some may read this as a vote against competitive bidding, it might be more about the city’s partnership with Recology — a regulated monopoly that has helped the city achieve record levels of waste diversion — and the associated costs of the measure. Prop. A would have required the city to own all supporting infrastructure for the waste stream (all currently owned by Recology) by 2018. That means the city would have been required to acquire significant real estate in a quickly recovering market and build sorting and transfer facilities, parking lots and other supporting infrastructure in just six years. In San Francisco. With no funding source. Voters may value the effectiveness of the city’s partnership, but they clearly balked at requiring the city to make significant financial investments in infrastructure that is already ably serving the city.
The success of Prop. B is the result of several different factors. Built in 1933, Coit Tower contains a series of murals that were completed as part of the New Deal’s Public Works of Art Project and have fallen into substantial disrepair in recent years. There have been disagreements over jurisdiction — the tower is managed by the Recreation and Parks Department and the murals by the city’s Arts Commission — which have led to inconsistent funding for curation and preservation of the building and the murals. But the outcome may have hinged on a more recent discovery: A conservator’s report revealed significant disrepair at the site just one week before the election, followed by an emergency infusion from the city of $1.7 million to fund repairs to the tower and murals. Clearly there is a problem here; Prop. B certainly drew attention to the condition of things at the tower, but this nonbinding resolution may have come disguised as a solution. It won't restrict potentially damaging activities at the tower unless the Board of Supervisors enacts legislation consistent with this policy declaration.
The interesting lessons of this election have less to do with the measures than with how voters make decisions. When proposals tap into a genuine frustration with existing services, voters will support even nonbinding policy statements in hopes that they might send a message to city officials — regardless of the measure’s potential impacts. Prop. B elevated an issue and thereby helped to secure additional public funding for a historic resource. However, the measure’s suggested restrictions on facility operations — and the resulting revenues — may have been lost amidst concern over the murals. But when proposals carry significant unknown costs and threaten to disrupt functional service relationships — as with Prop. A — voters are apparently not shy about rejecting them resoundingly. Prop. A clearly did not pass muster.
In spite of the lean primary ballot, it appears that we may return to a more typical laundry list of measures in November, with business tax reform, bonds and more coming to the voters for their stamp of approval. Even before the polling places closed for the June election, there were more than 10 initiatives either proposed or on the way to the November ballot. But with recent ballot reforms (pushed by SPUR in 2007), perhaps only half of those will ultimately make it to the ballot.
For those of us who remember the “good old days,” with upwards of a dozen measures just in San Francisco, that sounds like a half-day at the office.Tags: good government
- June 14, 2012by Eli Zigas, Food Systems and Urban Agriculture Program Manager
San Francisco may soon have a new urban agriculture program. On June 11, the Land Use and Economic Development Committee of the Board of Supervisors unanimously passed legislation introduced earlier by Supervisor David Chiu that seeks to increase the coordination, efficacy and breadth of city support for urban agriculture. Based on recommendations from SPUR's report Public Harvest as well as calls for change from community organizations including the San Francisco Urban Agriculture Alliance, the ordinance now moves to the full board for two consecutive votes, with the first vote likely on June 19.
The version of the legislation that passed the committee included a number of amendments to the original version. Some of the notable changes include:
- Strategic plan: The strategic plan for implementation of the legislation must be presented to the board for approval
- Funding: For the coming fiscal year, the urban agriculture program should have funding sufficient for at least one full-time staff person
- Timelines: The strategic plan may set new target dates for the goals listed in the legislation
- Job training: The program needs to find ways to link urban agriculture with job training and employment opportunities, especially in the private sector
- Land Use: The program must ensure that existing urban agriculture spaces are fully utilized
Though the board agreed to numerous changes, they retained the core components of the legislation. Given the support demonstrated at the hearing by both the supervisors and community advocates, including SPUR, the ordinance appears headed toward passage.
Assuming the legislation becomes law, the most pressing issue becomes how to translate the text of the ordinance into meaningful change. Prime among the questions of the law’s implementation is how the urban agriculture program will be funded. The mayor and Board of Supervisors are in the process of negotiating the city budget, and it is not yet clear what funding, if any, will be included to support the new program and ensure that the ordinance’s call for at least one full-time coordinator is reinforced with budget dollars. The city administrator and mayor will face another large question: Which city agency or nonprofit should manage the program and ensure that the goals of the legislation are met? They have until December to evaluate the various options and submit an answer to the board and public.
The Land Use Committee’s approval of the ordinance has moved the legislation very close to becoming law. And it has moved city agencies, nonprofits and community advocates into the more difficult conversation about how, exactly, the city will create a program that better serves San Francisco’s many gardeners and farmers.
- June 5, 2012By Tomiquia Moss, Community Planning Policy Director
Update: Mayor Ed Lee signed the Transit Center District Plan into passage on August 8, after unanimous approval by the San Francisco Board of Supervisors.
Things are heating up again for San Francisco's Transit Center District Plan. On May 24, the SF Planning Commission voted 5-1 to certify the final draft of the environment impact report that will move the plan forward to the Board of Supervisors’ Land Use and Economic Development Committee. In addition, the commission voted to approve amendments to the general plan, planning code and zoning code that will be necessary to implement the plan. It will go before the Board of Supervisors for adoption sometime in July. SPUR has long supported this plan, recognizing its potential to transform San Francisco and the region.
What Is the Transit Center District Plan?
The Transit Center District consists of approximately 145 acres surrounding the new Transbay Transit Center, currently under construction on Mission Street between First and Fremont.
The plan aims to create a new downtown neighborhood made up primarily of office and retail space, with a notable amount of residential space as well. The plan will enhance the area’s established patterns of land use, urban form and public space, creating a vibrant new neighborhood.The Transbay Joint Powers Authority (TJPA) selected Pelli Clarke Pelli Architects and developer Hines to design and build a high-rise tower next to the new terminal. The team has proposed a 1,070-foot tower, the tallest in the city. There are several shorter towers proposed for the district, ranging in height from 150 to 850 feet. These towers will provide major sources of new job space and housing over the coming decades.The Transbay Transit Center, the centerpiece of the plan, will not only provideexpanded bus facilities, itwill also include an underground rail station to serve as the San Francisco terminus for Caltrain and California high-speed rail. Because the project is not fully funded, the TJPA has divided its construction into two phases: the above ground terminal and the undergroundextension of Caltrainfrom its current station at 4th and King streets. (Note: Gabriel Metcalf, SPUR’s executive director, is a member of the Transbay Joint Powers Authority, the governing body for the transit station construction project.)
The downtown core can, and should, absorb more jobs and housing. Since the California Legislature adopted Assembly Bill 32, which mandates statewide reductions in greenhouse gas emissions, and Senate Bill 375, which requires regions to adopt land use plans that will bring about these reductions, there has been increasing momentum to encourage transit-oriented development around the state. San Francisco had already designated a redevelopment area adjacent to the Transit Center that calls for 2,700 units of housing (with 35 percent of it affordable). The new Transit Center District Plan, which overlaps some with the redevelopment area, will add zoning for a total of about 9 million square feet of space, of which about 6 million is anticipated to be office space. That’s an increase of about 33 percent and enough to provide nearly 35,000 jobs. As highlighted in SPUR’s report The Future of Downtown San Francisco, downtown is the logical place for dense employment near transit. The Transit Center District Plan brings these principles to life.
Costs and Public Benefits
To achieve the plan’s objectives and create the district envisioned, a broad range of public improvements and related programs are needed. The budget for the entire Transit Center and district are projected at $4.2 billion.
Approval of the Transit Center District Plan will provide much needed funding for the extension of regional rail to downtown San Francisco and other public infrastructure improvements. The Transit Center District Plan will also provide $590 million through a new neighborhood that has been zoned to generate fees for the city. To achieve the plan’s vision, development projects must generate enough funding to pay for infrastructure and public improvements proposed in the plan. Two proposed funding mechanisms are intended to strike the balance to achieve these requisites. First the city assessed new impact fees to be paid by developers who build in the district. Second, the area will establish a Mello-Roos Community Facilities District for new development projects, which will levy additional property taxes to pay for neighborhood improvements. Of the revenues projected to be raised from building out the plan, up to $420 million would be available for the Transit Center and rail extension, and $170 million would go to street and open space improvements to support growth in the district. Currently, a 5.4-acre park is planned atop the Transbay Transit Center. Making this park publically accessible is a critical element of the plan’s objectives for increasing open space. The plan also calls for more pedestrian and bike improvements, as well as sidewalk and street improvements to further solidify this as a viable neighborhood and jobs center.
This plan area has long been one of SPUR’s top priorities. It will be a national model of transit-oriented development. For urban design reasons, environmental reasons and economic reasons, we think this is the right plan in the right location.Tags: community planning
- May 29, 2012by Eli Zigas, Food Systems and Urban Agriculture Program Manager
Seven city agencies spent nearly a million dollars supporting urban agriculture projects in San Francisco in 2010-2011. Yet there is no single staff person responsible for coordinating that funding, nor any overarching goals for how the money is used. Urban agriculture legislation introduced on April 24 by Supervisor David Chiu, however, would change that.
The proposed ordinance, which implements a number of the recommendations in SPUR’s recent report Public Harvest, would:
- Set goals, with outcomes and timelines, such as: an audit of city-owned buildings to identify rooftops suitable for urban agriculture; five new resource centers for compost, mulch and tools; a streamlined application process; a reduction in community garden waiting lists to no more than one year wait time; 10 new urban agriculture projects on public land where residents show desire for the projects;
- Create an urban agriculture program that would coordinate the efforts of city agencies, engage with community groups to reach the goals of the legislation and generally support city gardening and farming; and
- Require the mayor and city administrator to publish an evaluation of existing efforts and a strategic plan for the new urban agriculture program by the end of 2012. Importantly, this evaluation and planning process explicitly calls for SPUR’s top recommendation, which was for the mayor and city administrator to decide whether a city agency or a nonprofit partially funded by the city will serve as the main institutional support for urban agriculture.
Those provisions combined aim to reduce the duplication of effort among agencies by creating a one-stop shop that would: provide a streamlined application process for starting projects on public land; serve as an information clearinghouse for the public and for agencies; and offer technical assistance to city gardens and farms. The legislation’s annual reporting requirement would also increase accountability by shining detailed attention on the city’s progress toward reaching the goals, as well as by providing an accounting of how agencies spent their funding. And, by requiring a strategic plan and having staff assigned to coordinate among agencies, the new urban agriculture program could ensure that existing funding is used more efficiently.
The legislation, however, wouldn’t be a cure-all. Even if the law is passed, successful implementation will require buy-in from the mayor’s office and individual agencies, which would ultimately decide how much priority and staff time they put toward improving existing programs. The legislation sets targets for new sites on public land, but the specific locations and the money to start the projects must still be found. And, for residents on community-garden waiting lists, the bill provides no immediate relief. Instead, the legislation builds the institutional capacity within the city to provide more land, resources and support in the coming years.
Though it won’t solve any challenges overnight, the legislation is a crucial step forward. SPUR supports the legislation and we will be tracking its progress through the Board of Supervisors.
- May 21, 2012By Corey Marshall, Good Government Policy Director
As the deadline rapidly approaches to submit measures for the November ballot, the City and County of San Francisco is moving ahead aggressively with its effort to reform the city’s business tax. While the city has made significant progress in recent weeks, there are some signs that the complexity and commitment to reform are being further complicated by increasing calls for a tax that would not just replace revenue from the existing payroll tax but bring the city additional funds.
City Controller Ben Rosenfield and Chief Economist Ted Egan have for the last few months been hard at work designing a replacement for San Francisco’s payroll tax. The controller’s office originally modeled two different proposals to replace the city’s current payroll tax: a modified payroll tax that would lower rates and broaden the base of payers, and a gross receipts tax based on rate schedules defined by industry. In the last month, however, that process has narrowed to focus solely on a gross receipts tax proposal. (Read the controller’s latest report on that effort.)
Gross receipts taxes are widespread in California, but they all have one important thing in common: They are extremely complicated. The tax must address dozens of different industries, as well as companies’ differing abilities to pay — and their varying ability to move to other places to conduct business. All this means there are many more levers than with a simple payroll tax. (San Francisco’s existing payroll tax is a straight 1.5 percent of all payrolls over $250,000 per year.)
But with a multitude of levers also comes significantly more flexibility. For example, the controller’s current proposed structure consists of six separate schedules. These schedules group companies that have comparable ratios between payroll (an expense) and gross receipts (how much money a company makes). For example, a real estate management firm may have few employees and high gross receipts from rent and other fees paid by tenants. Conversely, a restaurant might have a large number of employees and lower overall receipts. These two very different operating models are treated identically under the city’s existing payroll tax, but a gross receipts tax would provide different schedules for types of companies with different cost structures.
Another goal of the controller’s effort is to attempt to make the tax structure progressive in order to encourage job growth in small businesses and start-ups. Within these schedules there are a number of different rates (see sample schedule below) so that companies generating more revenue within each category would pay marginally higher rates. Likewise, start-up businesses that are not yet generating revenue — but may have significant payroll as they build products or services — would have more breathing room than they do in the current structure.
While the process to date has been one of the most inclusive in memory — with dozens of industry meetings and numerous iterations — the devil will ultimately be in the details for any proposal submitted to voters. There will be many winners and losers in any transition to a new tax (see below), which means achieving some form of consensus could determine a measure’s success or failure.
The eventual success or failure of business tax reform in San Francisco is only partially dependent on the structure of the proposal itself. The other side of this coin has to do with revenue. By design, all proposals to date have taken a “revenue neutral” approach; they attempt to simply replace revenue from the payroll tax and not generate additional funds for the city. However, that original intent is increasingly in doubt as the June deadlines for the ballot approach. Supervisor John Avalos, officials from Service Employees International Union 1021 and others have indicated their desire for any changes to the tax to generate additional funds. Whether or not those hopes are eventually included in the mayor’s tax reform proposal, it is increasingly likely that a separate measure to increase revenues could also be on the ballot in November. Could the controller’s measure include some additional revenue in order to neutralize these efforts?
The final stretch of negotiations will be critical to the success of the city’s business tax reform efforts. With the multitude of different moving pieces — both within the negotiations over rates and financial impacts, and apart from the negotiations around new revenues — this is still a fragile coalition. We hope a balance can be struck that will allow for the city to successfully transition to the gross receipts tax currently on the table. It would allow for greater stability over time, more equity and built-in incentives for new companies and industries to grow and thrive in San Francisco. But we must be mindful of the delicate balancing act required to get there.Tags: good government
- May 18, 2012By Egon Terplan, Regional Planning Director
After more than six years of planning, and six months after the release of a draft environmental impact report, we now have a clearer picture of what bus rapid transit on Van Ness Avenue might look like. This past Tuesday, the San Francisco Municipal Transportation Agency (SFMTA) unanimously approved a combination of two out of the four designs under consideration.
Bus rapid transit (BRT) is similar to light rail in efficiency, but it uses buses instead of trains on tracks, which makes for lower costs and greater flexibility. Systems typically feature three ingredients:
· Dedicated lanes, usually in the center of the street
· Unique branding to make buses highly visible
· All-door boarding and proof-of-payment systems, often with payment required to be in the station area
The proposal for BRT on Van Ness would include all of these elements at nine dedicated stations between Mission and Lombard streets (see map below). Outside of these special stations, the Van Ness/Mission bus would function as it does today, mixing with cars in the far right lane of traffic.
The current draft environmental impact report / environmental impact statement included four alternatives for bus rapid transit on Van Ness (including a “no build” option that would keep bus service the way it is today). The version that passed the SFMTA board combined options 3 and 4 from the draft into a blended solution with a dedicated center lane and right-side boarding.
SPUR argued in a recent letter to the boards of SFMTA and San Francisco County Transportation Authority (SFCTA) that the blended alternative has four main benefits:
· It demonstrates the biggest travel-time reduction, reliability improvements and ridership increases
· It uses existing vehicles with right-side boarding
· It maintains as much of the existing median as possible
· It creates a new urban design amenity on Van Ness by breaking up the street with a more inviting design
The same day that the SFMTA approved the proposal, the San Francisco County Transportation Authority pushed the same decision back for one month. But this a minor lag for the long-delayed project. Meanwhile, momentum for bus rapid transit is growing throughout the Bay Area — in the East Bay, South Bay and on Geary Boulevard.
We are excited to see the Van Ness project take its next step and hope for strong support from the SFCTA next month, as well full certification of the final environmental review this fall. We recognize that transit projects of this scale take time, but we look forward to riding the bus when it (finally) opens in 2017.Tags: transportation
- May 17, 2012By Laura Tam, Sustainable Development Policy Director
Have you been to Hetch Hetchy Reservoir in Yosemite? Everyone who drinks water or takes a shower in San Francisco should go. It is spectacular: a miles-long placid blue lake nested within towering granite cliffs, from which waterfalls cascade. To visit the waterfalls or Yosemite’s northern backcountry, you walk across O’Shaughnessy Dam. It marks the first catchment in a 160-mile long water system that brings high quality, superb-tasting water to 2.6 million residents of the Bay Area every day.
Standing upon it will give you the chance to appreciate the sublimity of both nature and human achievement. O’Shaughnessy Dam and the waterworks that connect it to the Bay Area are a marvel of engineering. The water shunted through them — about 218 million gallons a day — arrives in most city taps by gravity alone. This is also a place imbued with history: San Francisco’s congressional delegation won the right to build the dam in 1913, to secure a reliable source of water in the wake of the 1906 earthquake. This effort was famously and vociferously fought by John Muir and was the subject of a national debate for years; the loss later galvanized the Sierra Club to successfully oppose large dams in Dinosaur National Monument and Grand Canyon National Park.
It would be almost impossible to build a new dam there today. (In fact partially because it is so difficult and destructive to build large dams, we are running out of new supplies of water in California.) But tearing O’Shaughnessy Dam down now in order to restore Hetch Hetchy Valley would be a disaster.
If their signature-gathering campaign is successful, a small group of environmental advocates, led by Restore Hetch Hetchy, will give you the opportunity this November to vote on a measure that would require the San Francisco Public Utilities Commission (SFPUC) to develop a plan to drain Hetch Hetchy Reservoir. The proposed ballot measure calls for the creation of a task force that would spend $8 million to develop a long-term plan for improving water quality and reliability, remediating environmental damages caused by the water supply system, and identifying new water and renewable energy supplies so that Hetch Hetchy Valley could be returned to the National Park Service.
This ballot measure is so problematic that SPUR has taken early action to oppose it.
SPUR wholeheartedly agrees that planning for water quality and reliability is important. In fact, this is so obviously a good idea that the SFPUC and other end users of Hetch Hetchy water have been doing it for years. In 2007, in approving the environmental impact report for the Water System Improvement Program — an investment of more than $4 billion to shore up the seismic reliability of the Hetch Hetchy water system — the SFPUC gave itself, and its wholesale customers on the peninsula, ten years to develop a plan that would identify reliable alternative sources of water to meet the region’s future growth in demand, rather than diverting more water from the Tuolumne River. The SFPUC and other Hetch Hetchy users are currently implementing plans to meet this demand through recycled water, groundwater and conservation. (Read SPUR’s analysis of this plan.) So the idea of planning for new water supplies need not be on the ballot.
In terms of quality, Hetch Hetchy water is so pristine that it is one of only a handful of water supplies in the country that doesn’t need to be filtered, a process that is expensive and energy intensive. The SFPUC tests its quality more than 100,000 times a year to ensure that it exceeds all safe drinking water standards.
The main problem with the measure is that in spite of appearing to be about studying best options or planning for future water supplies, it has pre-determined the solution: draining Hetch Hetchy Reservoir.
The idea of punching a hole in or removing the dam and allowing the valley to be restored to its pre-development conditions has been around since the late 1980s. Over the last 35 years, the idea has been studied by the Environmental Defense Fund, the U.S. Bureau of Reclamation, the National Park Service, UC Davis, and several state agencies. Some of these studies determined that the idea of draining the reservoir was technically feasible but incredibly costly.
In 2006, the California State Department of Water Resources (DWR) and Department of Parks and Recreation evaluated the cost estimates of multiple feasibility studies conducted between 1988 and 2005. DWR’s meta-study found a range of costs from $3 billion to $10 billion for restoration and replacement of water and power sources. Restore Hetch Hetchy and the Environmental Defense Fund’s own studies support a lower cost estimate, ranging from $1 billion to $2 billion. DWR also found that the planning studies necessary to refine the costs and benefits of restoration would cost $65 million alone.
Even if we could obtain the several billion dollars necessary to carry out this endeavor (neither private nor public sources have yet been identified) some of the tasks involved may not even be possible. Here are just some of the hurdles we would need to cross:
• Identify water supplies to meet about 18 percent of the region’s water demand in dry years (which occur about 20 percent of the time)
• Permit and build 40 to 90 megawatts of renewable power to supply almost all municipal demand in San Francisco
• Build and operate a water-filtration plant, because water stored further downstream than Hetch Hetchy will have to be filtered
• Engineer and design a series of expensive and complicated infrastructure projects to re-engineer major components of the regional water system, then get those changes through the environmental review process
• Somehow convince senior water-right holders like the Modesto and Turlock Irrigation Districts on the Tuolumne River to let us store our drinking water in their reservoirs
• Also convince them it would be a good idea to raise the heights of their dams so we can enlarge these reservoirs with our extra water, flooding anew many miles of the Tuolumne River and acres of currently dry land.
Yes, the plan to drain Hetch Hetchy involves causing new ecological damage. We would be trading flooded acres in one place for flooded acres in another.
At SPUR, we have done a lot of work on climate change adaptation. From this work, we have concluded that it is not wise to reduce water storage facilities considering the realities of a growing population and climate change. A bigger population will increase demand, meanwhile climate change could significantly reduce supply through drought and hydrological cycle changes. Hetch Hetchy, unlike other water storage facilities in California, is relatively buffered from near-term climate change because of its high elevation. And it is the largest single source of water supply for the Bay Area. In the future, we will certainly need diverse supplies to rely on in a prolonged drought, but we will also need Hetch Hetchy more than ever.
Loss of the reservoir would decrease the Bay Area’s water and energy security, requiring new water storage (possibly in reservoirs not owned by San Francisco) and the development of new water and energy supplies. Such new supplies are not guaranteed to have the low greenhouse gas emissions profile that Hetch Hetchy water and power do — and they could worsen climate change while increasing our vulnerability to it.
So visit Hetch Hetchy. Stand on O’Shaughnessy Dam and feel the cool updraft. Appreciate what nature created and what the city built there long ago. Dams, including this one, don’t last forever, and perhaps in a few generations the conversation about a different future for the Hetch Hetchy Valley may be worthwhile. Then, we’ll need to weigh our options for other new large water supplies, all of which will have enormous environmental tradeoffs: think of building a desalination plant, fighting with Los Angeles over the Sacramento Delta, building a peripheral canal or siting new large dams in presently undammed Sierra mountains and foothills.
Fortunately, that time has not yet come, so this November, vote “no” on the “Water Sustainability and Environmental Restoration Planning Act of 2012.” Let’s keep Hetch Hetchy around for the forseeable future.Tags: sustainable development
- May 9, 2012By Jennifer Warburg
In recent months, Sacramento, Los Angeles and San Diego each passed their first Sustainable Communities Strategy (SCS) in response to Senate Bill 375, the 2008 state bill requiring each region in California to create a coordinated land use and transportation plan to reduce per capita greenhouse gas emissions from driving.
We in the Bay Area have the advantage of being the last among the big regions to pass an SCS. What can we learn from the other regions about the implementation of SB 375 and the prospects for better regional planning statewide?
Last month, SPUR explored this question in a panel discussion with four of the state’s leading advocates for effective strategies: Ken Kirkey from the Association of Bay Area Governments, Eliot Rose from the Center for Resource Efficient Communities, Amanda Eaken from the Natural Resources Defense Council and Stuart Cohen from TransForm. Given each area’s distinct circumstances and politics, it is difficult to generalize about their SCS process, but several broad lessons stood out.
The San Diego Association of Governments (SANDAG) was the first regional agency in California to adopt an SCS, and the results were watched closely by the state’s other metropolitan areas. SANDAG has the advantage of being a region that includes a single county, as opposed to SCAG’s six, SACOG’s six and the Bay Area’s nine. The SANDAG SCS passed in October 2011, and the region has looked likely to meet the Air Resources Board’s green house gas emission reduction targets early, thanks in part to the overall decrease in regional activity accompanying the economic recession. But the SANDAG SCS has received ambivalent reception, with many observers questioning whether the plan went far enough. As Eliot Rose wrote, “complying with SB 375 is a different thing than actually using the opportunities that the bill presents to produce substantive changes in the way our communities look and the way that we get around, and SANDAG’s RTP illustrates this gap.”
SANDAG has devoted a commendable investment to transit, a proportion comparable with Los Angeles at 47 percent, but the San Diego region is still directing substantial new development to areas where transit is likely to remain limited. According to Rose, only 53 percent of the region’s growth is slated to occur in Smart Growth Opportunity Areas, with the rest scattered in suburbs and unincorporated areas, even after the 2035 horizon when the region is unbound by general plan assumptions.
The SANDAG plan is currently held up in litigation, and its perceived shortcomings have prompted a wider conversation about whether more aggressive standards should be adopted in order to hold regional entities to their policy commitments.
In Southern California, the Southern California Association of Governments (SCAG) focused throughout its SCS process on overcoming the apprehension that measures to reduce greenhouse gas emissions are bad for the economy. Organizers gathered compelling data from expert studies demonstrating the market demand for transit, multifamily housing and walkable communities. Most promising were the voter surveys commissioned by SCAG which showed a population that embraces smart land use planning and wants to live in communities with many transportation options.
By mounting an extensive outreach campaign across the region, the largest and most heavily populated in the state, SCAG leaders were able to bring about a major shift in funding priorities. $246 billion, nearly half the plan’s total revenue will be spent on public transportation, including the ambitious 30/10 Plan to build 12 key transit expansion projects in Los Angeles in the next ten years. The plan quadrupled regional spending on bike and pedestrian infrastructure, but the final figure still represents just 1 percent of the SCS budget, falling far short of the 14 percent of funds voters said they would like to see spent on active transit.
The SCAG SCS was passed unanimously on April 4, and the broad support it was able to garner represents progress for the region. But voters are notably ready to see even more commitment to smart land use and public transportation investment.
Sacramento’s regional planning entity, the Sacramento Area Council of Governments (SACOG), passed its SCS just a few weeks ago on April 26. The plan focused on local rezoning around identified transit priority areas, defined as areas within a half-mile of high quality transit: a rail stop or a bus corridor that provides or will provide at least 15-minute frequency service during peak hours by the year 2035. But the Sacramento delta region lagged behind the other regions in their prioritization of transit, allocating only 32 percent of their overall budget, compared with SCAG’s and SANDAG’s 47 percent and MTC/ABAG’s projected 67 percent. Sacramento also plans to spend significantly more on highways than the other regions.
SACOG has earned praise, however, for allocating nearly 8 percent of its overall budget for improvements to bike and pedestrian infrastructure, far exceeding the other regions whose investments in active transportation remain a meager 1 percent. And Sacramento makes important steps in concentrating new growth within already built up areas, managing to grow by 39 percent, but increase its urbanized footprint by only 7 percent.
As the Bay Area's own SCS is finalized over the next year, our task is to continue to set a high bar—to keep shifting our investments towards more sustainable modes and high performing transport projects that are cost effective and support multiple regional goals such as reducing driving and expanding the economy. The other metropolitan regions are looking to ABAG and MTC’s Project Performance Assessment Process for improved economic, social and environmental goals with which to measure the merit of projects in the next SCS process.
- April 25, 2012By Egon Terplan, Regional Planning Director
Earlier this spring, high-speed rail in California took two very significant steps. First Bay Area leaders announced a plan to electrify Caltrain, which would make it possible for Caltrain and high-speed rail to share the same tracks between San Jose and San Francisco. Second the California High-Speed Rail Authority released an updated business plan that cuts the cost of the train system by a third.
The new business plan (download the official summary here) still assumes an electrified train system that will travel between San Francisco and Los Angeles in 2 hours and 40 minutes (at 220 m.p.h.) and will operate without any ongoing subsidy.
There are four key changes in this updated business plan:
1. It lowers the cost of the high-speed rail system by $30 billion to $68.4 billion by adopting a “blended” approach. This focuses investment on upgrading existing regional and commuter rail systems, not building an entirely new statewide system. The blended approach is realistic and allows for the system to be built incrementally. In the 2011 business plan, the blended approach was estimated to cost $78 billion. It is now estimated to be $68.4 billion. The savings are primarily due to updated assumptions about inflation and faster construction time. This approach has greater political support in adjacent communities (namely on the Peninsula) and has successful precedents around the world, including France’s popular TGV.
2. While starting construction in the Central Valley, it includes early investments in the Bay Area and Los Angeles (the “bookends” of the system). This includes the decision to help fund the electrification of Caltrain with a $700 million statewide investment in addition to $800 million in local and regional funds to help electrify Caltrain by 2020. Electrifying Caltrain will speed service (since electric trains can stop and start faster than diesel ones) and will reduce emissions by 90 percent. The new business plan also includes investment in upgrading the rail systems in the Los Angeles area. Overall, $3.5 billion will go into the urban systems over the next eight years.
3. It proposes that the initial operating segment will connect from the Central Valley to Southern California.The 2011 business plan proposed that the initial construction section would run from Madera (south of Merced) to Bakersfield. This business plan assumes that the system will begin with passenger service from Merced to a station in the San Fernando Valley. To connect from the Central Valley to Southern California requires investment in building passenger rail tracks over the Tehachapi Mountains to connect Bakersfield and Palmdale. This business plan assumes that this segment will have sufficient ridership and revenue to exceed its cost and will be self-sustaining without need for operating subsidy.
4. It makes high-speed trains part of an integrated statewide transportation system in California, where each investment has immediate benefits to its respective region. While the initial construction and operating segments will be to the south, the California High-Speed Rail Authority is proposing improvements to the existing regional rail system between the Central Valley and the Bay Area, namely the Altamont Commuter Express from Stockton to San Jose and Amtrak’s San Joaquin line from the East Bay to Stockton or Sacramento via Contra Costa County.
While we commend Bay Area leaders and the California High-Speed Rail Authority for taking these important steps to move the project forward, SPUR remains concerned that high-speed rail’s initial operating segment runs from the Central Valley to Southern California and will not connect to the Bay Area. We are also concerned that there is not yet funding to extend Caltrain’s service from the current San Francisco station at 4th and King to the new Transbay Transit Center in downtown. This raises a few questions:
· When will be there be a one-seat ride from San Francisco to Los Angeles?
· If there is funding to upgrade the Altamont Commuter Express over the Altamont Pass, does this mean a rider from San Francisco would take Caltrain to San Jose and then ACE to Stockton before connecting to the trunk line to Los Angeles?
· Does this mean that we should rethink Dumbarton Rail as an electrified service that could bring upgrades and electrified ACE trains to meet up with Caltrain on the Peninsula?
· What will it take to fully fund high-speed service over the Pacheco Pass south of San Jose?
The new plan puts the onus on the Bay Area as a region — and SPUR as a civic voice — to find the money to both bring Caltrain and high-speed service to San Francisco’s key transit hub and connect that service to the initial high-speed operating segment in the Central Valley.
Despite our concerns about the initial focus on the connection to Southern California, we at SPUR (like the mayors of California’s major cities) remain strong supporters of high-speed rail. The blended approach takes a pragmatic tack — without sacrificing true high-speed service.
- April 24, 2012By Corey Marshall, Good Government Policy Director
For the last decade, businesses in San Francisco have been adamant that the city’s payroll tax is holding back job growth. First, companies must pay the tax when they reach $250,000 in payroll, which discourages new hiring. Second, they must pay it when employees exercise their stock options — a strong incentive for any company considering an IPO to leave the city. SPUR, along with much of the business community, has argued that we should restructure the city’s tax system to remove these disincentives to hiring. Following payroll tax exemptions in 2011 for stock compensation and for businesses locating in the Mid-Market neighborhood, the call for payroll tax reform has sounded again. The city is finally responding, but will this effort lead to real reform?
City Controller Ben Rosenfield and Chief Economist Ted Egan have for the last three months been hard at work designing a replacement for San Francisco’s payroll tax. That tax is currently 1.5 percent of total payroll for every company with at least $250,000 in payroll. This means most businesses pay nothing, because they're too small to qualify. The city has also had difficulty collecting from entities that don’t clearly have “payroll,” including some partnerships, sole proprietors and financial vehicles. As a result, only 7,500 of the city’s 80,000 registered businesses pay the tax. One of the goals of the reform effort is to reduce rates on growing companies by asking all companies to pay something.
San Francisco is the only city in California to levy a tax on payroll; most other cities have some form of gross receipts tax. For all of the complaints about the city’s payroll tax, though, at least it’s simple.
Rosenfield and Egan have developed alternatives and conducted dozens of industry workshops to explore their implications. All proposals at this stage are designed to be revenue neutral (meaning they would create the same amount of revenue as the current payroll tax), but they would broaden the base of payers. In other words, the city isn’t looking for more money, but it is trying to increase the percentage of businesses that contribute.
To make the San Francisco ballot in November, proposed measures must be submitted to the Board of Supervisors by the first week in June. As of this writing, the controller’s office is on schedule to send a final proposal to the mayor and board president by the first week in May. There are currently two distinct proposals: a new gross receipts tax and a revised payroll tax. Below we summarize the main features of each. (You can also download the latest presentation from the controller’s office.)
Option 1: Gross Receipts Tax
Gross receipts taxes are based on a company’s total earnings, as opposed to a percentage of a company’s payroll. Most major cities in California have a gross receipts tax, and no other cities have a payroll tax.
· Uses industry-based rate schedules. Separates the business tax base into six groups, based on industry sectors. This structure mirrors that used in many other California cities but simplifies the structure with fewer schedules.
· Sets progressive rates. Transitions tax rates to a structure in which rates increase as earnings increase. Companies pay a higher rate as they earn more. Conversely, companies pay a lower rate if they earn less.
· Sets marginal rates. Creates tiers of rates that apply only to the range of gross receipts, rather than the entire amount of gross receipts, similar to personal income taxes. For example, a company in schedule 1 would pay 0.1 percent tax on gross receipts from $1 million to $2.5 million and 0.2 percent on all gross receipts from $2.5 million to $25 million.
· Broadens the tax base. Increases the number of businesses paying the payroll tax to 33,500 from only 7,500 in 2010.
Option 2: Revised Payroll Tax
The revised payroll tax proposal retains the current business tax structure but lowers rates in all categories and significantly increases the cost of business licenses.
· Increases business license fees. Retains payroll tax but increases business license fees at all levels. In the current system these fees range from $25 to $500 based on payroll. New rates would range from $150 to $10,000.
· Lowers overall payroll tax rates. As a result of higher license fees and a greater number of payers, payroll tax rates would actually be reduced at all levels. Rates would progressively increase with payroll but top out at 1.2 percent for those with the biggest payrolls.
· Uses progressive rates.Transitions the current 1.5 percent tax rate to a structure in which companies pay a higher rate as they earn more. Conversely, companies pay a lower rate if they earn less.
· Creates special real estate license fees. New rates would be assigned by type of facility. Residential buildings of more than four units would pay per unit, commercial real estate would pay per square foot of space, and commercial parking with more than 100 spaces would pay a flat rate per facility.
· Creates incentives for new businesses. Includes a one-year payroll tax holiday for all new businesses.
· Encourages growing businesses. Multi-year stock option smoothing and a $100,000 annual deduction for all businesses could help businesses grow and thrive.
· Broadens the tax base. Increases the number of businesses paying the payroll tax to 33,000 payers from 7,500.
All of this begs a very important question: What is the best way to transition a tax system that generates $400 million per year? Very carefully. The city is considering a multi-year transition that phases in the new structure in a way that ensures that the city doesn’t lose revenue — or collect too much. Details are not yet finalized, but it could look something like this:
Business Tax Phasing Plan
Old Payroll Tax Rate
New Tax Rate
Of course, there is always a third option: do nothing. It is still unclear whether a consensus will be achieved in support of a new structure.
Further complicating the process are separate proposals from the Board of Supervisors, including a small business payroll tax exemption introduced by supervisors David Campos and Mark Farrell, and a persistent push to generate new revenues from Supervisor John Avalos and others.
Depending on which path the eventual tax reform proposal takes on its way to the ballot, there are a number of possible outcomes. The mayor could simply choose to put a payroll tax reform package on the ballot by his own signature, in which case the board would have no influence over the content. But what happens if a proposal is carried by the board? Will there be adjustments to specific rate categories? Integration of one or more proposals from the Board of Supervisors? Perhaps even a proposal that generates additional revenue? Of course the more layers of complexity, the lower the chance that the proposal will make it to the ballot.
SPUR has mixed feelings about these proposals. We do not want to drive away firms headquartered in San Francisco, which is a real risk of the gross receipts option. On the other hand, we believe the payroll tax is probably worse. Our hope is that the city can fine-tune the gross receipts option so that it succeeds in building the tax base while keeping San Francisco a viable location for many different kinds of firms.