As the city faces the final breakup of the Twitter tax break, District Six Supervisor Matt Haney called for a hearing on Tuesday to examine whether or not the city benefitted from the eight-year deal.
Implemented in 2011, the Central Market Street and Tenderloin Area Payroll Expense Tax Exclusion exempted companies moving into Mid-Market buildings from the city’s payroll tax.
The tax break will expire on May 20.
Speaking at Tuesday’s Board of Supervisors meeting, Haney, whose district covers Mid-Market, said, “I’ve yet to hear anyone say we should renew it. I haven’t even heard for it to be renewed from the companies themselves.”
Haney wants a City Hall hearing with the Planning Department, City Administrator, Controller’s Office, Office of Economic, Workforce Development, and “as many of the tax break beneficiaries as we can get” to account for how well the city made out in the deal, which he notes was supposed to revitalize Mid-Market as a neighborhood.
“There are some positive signs in Mid-Market,” Haney conceded before quickly adding, “We still have a neighborhood rife with vacant stores and empty lots. The area also continues to struggle with rampant drug use and drug dealing.”
Haney alleges that few of the jobs created by companies like Twitter benefited locals. He questions what the city plans to do for the frayed neighborhood now that the tax deal is about to roll over.
“Cutting taxes for tech companies was not a silver bullet, so what now?” the lawmaker asked.
In 2014, City Hall economist Ted Egan estimated that the city gave up $4.2 million in taxes the previous year thanks to the exemption. But he went on to note that “business in the area paid $7.6 million more in 2013 than they did in 2010” based on “the base year payroll tax of businesses which took the exclusion as well as the full payroll tax of businesses in the area which did not.”
However, the city’s tax concessions jumped to an estimated $34 million the following year on account of missing out on the opportunity to tax the results of initial public offerings (IPO) for companies like Twitter.
The board can choose to renew the tax deal before May 20, but as Haney noted, there appears to be no appetite for an extension.