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On the Money

Wednesday, Dec 8 1999
I'm not going to waste a lot of time or space trying to explain or defend the sillier of Tom Ammiano's past fiscal proposals, because they were (and are) just flat-Earth idiotic. Until he renounces these Allende-esque fantasies (e.g., municipal taxes on incomes above $150,000 and stock trades at the Pacific Exchange) in convincing form, he will continue to take a political pummeling. And pummeled he has been, as a bevy of "independent" political committees (funded by the "business community" and joined at the hip to Willie Brown's re-election effort) spend hundreds of thousands of dollars to instruct us that Ammiano's middle name is Vladimir, and a command economy is his secret wish.

These campaigns have had effect; a recent poll shows Brown with a 49-29 lead. But while they cast Ammiano as a tax-happy loose cannon, these campaigns are also spreading the ridiculous and dangerous message that Willie Brown has managed city government well. Actually, Willie Brown has been an expensive disaster in terms of financial management, and another four years of his economic "leadership" will put the city in truly dire fiscal straits that will threaten business and labor alike.

A few years ago, apparently for political reasons, Tom Ammiano made some dumb, way-left tax proposals that stood no chance of becoming city policy. For the last four years, Willie Brown has put the city treasury on a train headed for insolvency.

From the end of Frank Jordan's last full budget to the latest Willie Brown budget, city spending has grown from roughly $2.6 billion to $4.2 billion, or approximately 60 percent. According to city documents and published reports, over that time the city added 2,700 workers to the payroll, increased spending on outside consultants by $100 million, upped overtime outlays by some 60 percent, and vastly bloated the ranks of management. San Francisco has now surpassed that bastion of financial management, the city of New York, in per capita municipal expenditures. The city's debt load has also swelled during that time, increasing the net bonded debt owed by each San Franciscan from about $848 in the 1995 fiscal year to about $1,035 in 1998.

Now, it would be one thing if these astonishing increases in spending were married to improvements in city services, or to investments in infrastructure. But that is clearly not the case. Surveys have shown city residents to be unhappy with Muni, homelessness, traffic, and parking. If there is a San Franciscan outside Willie Brown's campaign who thinks city services are now 60 percent better than they were in 1996, I have not met him.

The city's spending splurge has been hidden during the mayor's first term by an amazing economic boom that has ballooned tax revenues coming into the city treasury. Even if the boom continues, however, the profligate Willie Brown approach to city finances cannot be sustained. When recession hits (and it will hit, sooner or later, the digital revolution notwithstanding), Mayor Brown's financial policies will have stripped the city of all its best responses. The city will have very little in the way of reserves (despite official blather to the contrary, San Francisco has put away almost nothing for the future during these boom times), and will be up to its eyeballs in debt. When the national economy turns, layoffs, service cuts, and, perhaps, tax increases will be forced on the city and its residents just as they are least able to bear them.

The unsustainability of the Brown approach to finance is not mere Willie-spiting. Consider what Mark Mosher, the Committee on Jobs honcho who is considered by many as the city's savviest spokesman for business, said in June about Brown's handiwork: "There is a sense that the miracle economy can't last. Government has grown to the point where we may not be able to sustain it during lean times."

That, of course, was then. Last month, immediately after Ammiano had ridden an extraordinary write-in campaign into the runoff with Brown, Mosher opined this to the Los Angeles Times: "There is a deep concern within the business community about Ammiano's record. He has proposed more taxes and more government spending than any politician in San Francisco history."

There is a reason that San Francisco's "business community" (really a group of 30 or 35 corporate CEOs dominated by the Shorenstein family, which essentially owns downtown, Don "Gap" Fisher, and a few other political mega-moneybags) is "concerned" that Tom Ammiano will become mayor, but I don't think it's because he will manage the city's finances more poorly than Willie Brown; this side of the Iron Curtain, such a scale of mismanagement is all but unimaginable.

No, the "business community" has concerns about Tom Ammiano because this exclusive "community" is deeply connected to our ruling Democratic establishment, and deeply entwined with a city government that has dumped unwarranted largess on the "community," to the detriment of the city as a whole, for decades now. The "business community" is concerned that, if Ammiano is elected, a whole series of hidden, wasteful, and/or corrupt city subsidies will come up for review. (The most obvious: an Assessor's Office that lets at least $100 million in property taxes escape the city treasury every year through undervaluation of downtown real estate.) The "business community" is also fearful that an Ammiano victory will make the current, predictable system of gaining city favor -- which apparently centers on paying a network of favored "lobbyists" huge amounts of money for a long time -- unpredictable, because Ammiano is not part of the net.

For the Shorenstein and Fisher families, and for 30 or 35 other local power players, these are reasonable concerns. Businessmen should be expected to try to protect their profits. Businessmen hate unpredictability, and they know what to expect from Willie Brown.

I, too, know what to expect, in fiscal terms, from another four years of Willie Brown. Wild spending that produces little of lasting value. Deal-by-deal government that produces large, unfortunate, unintended consequences. Borrowing, rather than saving, for a rainy day. Policy based on politics, patronage, and, it certainly damn well seems, pilferage.

As I've said before, Ammiano is not my perfect mayoral candidate. But when it comes to the economic future of San Francisco, I'll take the potential profligate over the proven plunderer any day. And particularly this coming Tuesday.

About The Author

John Mecklin


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