It will take just one large firm to leave or cut back its presence in and Fran and the city government will fall due to lack of funds. Worse, there are only five firms financing the city.
“That decline is at the core of The City’s crisis and the fear among city leaders that without major policy interventions, conditions downtown could continue to spiral.
That decline would only worsen The City’s own fiscal health, as it relies heavily on business taxes to pay for the services it provides residents. The City’s annual budget deficits are projected to exceed $1 billion by 2030.
“Our work to revitalize downtown, strengthen our economy, and remain an economic leader requires us to change how we structure our taxes,” Mayor London Breed said in a statement Wednesday. “We can set our business taxes to both deliver the important services we all rely on while also making us more competitive to attract and retain business. This will require partnership between City Hall, the business community, and stakeholders across the City — and it’s critical we start this process now.”
The result of the talks could include a fall 2024 ballot measure that would alter The City’s tax codes to entice businesses to either stay or relocate in San Francisco.
Tax incentives will not keep small business in San Fran—since that will not pay for the approved theft, crime, feces and drugs that abound in this city. San Fran is collapsing and all they are worried about is some sea is rising hoax.
SF report finds ‘potentially risky’ reliance on big biz for tax revenue
- By Adam Shanks, SF Examiner, 7/14/23 https://www.sfexaminer.com/news/politics/sf-report-finds-business-taxes-too-concentrated-at-risk/article_c660d66c-210c-11ee-937c-df54cadecfec.html
Empty offices have become common in downtown San Francisco, where the vacancy rate has increased to more than 25% this year — the highest in the region
San Francisco increasingly relies on taxing major businesses to generate tax revenues, potentially prompting companies to look elsewhere and stymieing The City’s post-pandemic recovery, according to a city analysis released Wednesday.
The report found that, as San Francisco’s economy grew healthily over the last decade, its tax revenues were generated by an increasingly concentrated group of payers — primarily, tech companies. The City also adopted progressive tax measures that increased the tax burden on that small group.
Combined, these factors make The City vulnerable to the post-pandemic shift to hybrid work and reduced demand for office space, according to the report published by Treasurer José Cisneros, Controller Ben Rosenfield and Chief Economist Ted Egan.
Its conclusions will come as no surprise to those who have watched downtown’s decline since the onset of the COVID-19 pandemic more than three years ago.
The new report was commissioned by Supervisor Rafael Mandelman, who told The Examiner on Wednesday that it clarified “things that I think I long had suspected about our tax base, our general fund becoming ever more dependent on a small number of taxpayers paying ever more, and worrying overlap between the taxpayer base we’re relying on and the businesses that appear to be coming back the slowest and or actually pulling out of The City.”
The new data will form the basis for upcoming talks between city officials, business leaders and others about how to redesign and improve The City’s business taxes.
That decline is at the core of The City’s crisis and the fear among city leaders that without major policy interventions, conditions downtown could continue to spiral.
That decline would only worsen The City’s own fiscal health, as it relies heavily on business taxes to pay for the services it provides residents. The City’s annual budget deficits are projected to exceed $1 billion by 2030.
“Our work to revitalize downtown, strengthen our economy, and remain an economic leader requires us to change how we structure our taxes,” Mayor London Breed said in a statement Wednesday. “We can set our business taxes to both deliver the important services we all rely on while also making us more competitive to attract and retain business. This will require partnership between City Hall, the business community, and stakeholders across the City — and it’s critical we start this process now.”
The result of the talks could include a fall 2024 ballot measure that would alter The City’s tax codes to entice businesses to either stay or relocate in San Francisco.
San Francisco benefitted from its emergence as a tech hub over the past two decades. The tech sector saw an average annual growth of 12.7% per year in GPD, compared to 3.9% for the rest of The City.
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