very rarely presidential. that's one small piece of the business community. our business licensing is progressive. by raising $13 million for affordable housing through business license fees, we are affectively broadening the base of people contributing to that. it is not really mutual. to some extent, it's providing revenue for a bowl that we have been talking about. >> i agree. thank you very much. >> in terms of what supervisor avalos had been talking about, are you considering anything in that $13 million specifically for the business community, especially the small-business community? in t eight, that type of thing? -- mta, that type of thing?

>> the mayor does intend for the $13 million to go to the development of affordable housing. i think it would also put on the table that providing affordable housing for your work force is a benefit for small business. more than probably any other type of business. you are the ones and fleeing those living in these moderate income places -- you're the ones employing those living in these moderate income places. we're not talking about the housing type side of the spectrum. you are the ones putting those folks to work. i think it does give a benefit to the small business community. >> looking at the two ordinances' is there, it in your opinion, and-impacts, or what

would be your outcome? >> thanks, commissioner. supervisor avalos has worked with the different coalition of stakeholders to come to the $40 million #. he had a process. i think i will withhold comment on that. what i will do is say what the mayor before word with president -- put forward with president chiu represents a consensus. it represents a a consensus among that group. we've got folks under the tent and really talking about the structural issues. and putting this idea for word about the $13 million for affordable housing -- i would

say to supervisor avalos, he and his stakeholders with your process. they arrived at the number they arrived at. we spent months coming to a consensus measure. a lot of work has been done by the controller's office. alternately, i don't own a business, so i am not a direct taxpayer. all those conversations -- i know i didn't answer your question. i only want to talk about hours and not what supervisor avalos did or didn't do. any other -- >> and your comments? ok, we will open it up for public comments. members of the public may

address the commission for up to 3 minutes. there are speaker cards on the table. if you could speak yearning clearly, and be mindful of the time -- speak your name clearly, and be mindful of the time on the podium. welcome. go ahead. thank you. >> good evening, commissioners. i work for supervisor a lot he -- supervisor olague. she is supervisor avalos: supportiv -- she is supportive of supervisor avalos's right now. this is something we went to make sure that is supported for small businesses, especially. they have taken the brunt of a lot of the economic issues,

economic impacts, i'd say over the last decade, if not longer. we have seen a lot of businesses close-up over the past year. we wanted to make sure we were focusing on that. that is why the schedule is so supportive of small businesses. a lot of times in the past, they have carried the brunt of the taxes in san francisco, and i thought we just wanted to have an opportunity that they were elevated and supported. we have been working on trying to get more small businesses hiring locally, especially young people in the neighborhood. they may not have the same educational skills to compete at the work force. we wanted to make sure they were

incentivized in that effort to support their own neighborhood. was one of the reasons we were so supportive. we wanted to make sure that the impact would be acceptable for them. into smaller nominal uofd. i understand these other issues -- it is a smaller nominal fee. i understand these other issues. we are committed to making sure that happens. >> thank you. >> may i ask one question? so, the enterprise zone is in district 5. has supervisor olague made any

decision with regard to that? >> we have not. we would have started to talk to a couple of businesses in our area, but a lot of these did not come out until really the last couple days. we would like to look at this larger overlaid music district the zone. i would love to work with you more directly about that. >> thank you. next speaker. >> welcome, thank you. >> good afternoon, commissioners. supervisor kim and supervisor

olague will be using this in their districts. we recognize and support small businesses and see small- business as being a driving force and the economy. that is one reason why it supervisor avalos and all the other authors are able to generate less revenue from small businesses. the fees are less under supervisor avalos than the mayor's. the difference is that john -- or supervisor avalos has

targeted large businesses. we did some joint polling. we found this was far more popular with the voters, because it takes less from small business in taxes. the company's that can afford to pay more to ensure the services that need, the infrastructure we need are taken care of. to answer your question, i would just say to you over 250 rec directors have been laid off. that has had a huge impact on the park's. rec centers have had to close

on weekends. 250 directors. that is a lot. obviously in the nonprofit sector, they have not had a raise in five years. they are really struggling. there are good policy reasons across the board to support supervisor avalos's measure. i'm saying i think there are good policy reasons for supervisor avalos's measure. thank you very much. >> thank you very much. next speaker please. >> hello. i am michele mendez. -- menendez.

one thing i never hear about and deal with on a day-to-day basis is the enforcement. it makes a difference for a lot of businesses. my experience is a lot of businesses that come and do there business here and consider the minimum wage laws, the payroll tax ordinance, and the sixth -- the sick bay ordinance. if we want to increase revenue -- the need to be addressed. bair currently not registered. secondly, there is the exemption. we have a housing issue because of all the high-tech moving in.

i see companies that are exempt from it, but they are adding to our housing problem. they should be contributing to this, and maybe not be exempt. that's all i have to say. thank you. >> thank you very much. next speaker, please. >> good afternoon, commissioners. jim lazarus. we were very pleased to have participated for months and this process with the mayor and supervisor chiu's office and the controller. the city attorney is going to have to go back and start redrafting again by the middle of july when this will have occurred. we believe the tax measures you should support need to be broad- based, fair, and they need to

encourage -- continue the exemptions that were in place to drive economic growth in the city and we need to have a reasonable adjustment to a business license fees, which, after all, are a form of tax. which is why in recent years they have not been amendable except by going to the voters. a neighborhood resident of parking sticker will cost you $100 and a business license fee at the low-end $25 is clearly not cost recovery. there is the business feet side of the equation -- fee side of

the occasion. -- of the equation. we have to come up with our revenue neutral measure. it is not revenue neutral for everyone. there is going to be twice as many taxpayers. some will pay more. some will pay much more because there's nothing under the old system. you could have $250,000 and pay no payroll today and she will be paying something under the new system. so, we need to balance the rate structure. we need to balance the business license fee structure as well. we're looking forward to working with the supervisors on a package that is fair, as i said, equitable, broad-based, and

brings the city some new revenue necessary for economic development of the mayor's office. it should have a dedicated revenue source. from the business community to ensure we have a viable and active group in san francisco. this would be a way to help find that as well. a look forward to working with this commission over the next couple of weeks and come up with a package that the entire business community can support. thank you. >> thank you. jim, before you sit down -- you brought up an interesting point. fee versus tax. the fact is the fee is a tax. i think there is a huge marketing issue here, this idea

that there is a class of businesses that do not pay a tax. you actually get oa fee. that part is covered and you pay incrementally. i wish there would be disc ussion. this is not about the flat tax. then at some level, you kick into a progressive tax. once you hit an extra dollar of revenue, it generates new prague -- new profit. if you are operating below the profitability, but does not necessarily generate more

profit. so, i think that's been a big misconception, and it's been used to try to derail the progress we're trying to make. if you guys can help us with that, that would be great. >> in fact, that is true in both schedules that have been proposed. and the question is, what should that increment be at the low end? 2000% increase at the high-end seems a bit much. >> i agree. i think there should be plenty of room for exceptions where this was not to be an

opportunistic land grab or revenue grab, if you will. to put the hurt on certain companies. the idea is to keep the revenue neutral and to meet the points you pointed out, making it equitable and addressing -- i mean, it would ability is one of the primary points, and i think it should be. otherwise, people will feel like they're being mistreated in the city. >> i will let you answer the question. unfortunately, and public comment, we are somewhat prohibited in having a back-and- forth dialogue. so, you can ask a clarifying question. so, i will let you have one more response. we have to make sure that -- >> it just goes to the issue of the equity ability of our system and the fact that the payroll- based system is not the most equitable. it is not based at all on the ability to pay.

of gross receipts system at least as some relationship, we hope, as businesses get greater, that there is some profit in that increase gross. there is not always a profit in peril. san francisco has done very well with payroll tax. in the last 10 years, inflation on average has been 2.5% a year. the payroll tax has grown 5% on average, during a time when employment in san francisco fell to 530,000 people working from 600,000 people. by and large, these are high payroll individuals driving this payroll tax instead upper house

-- instead of a higher and unemployment. >> next speaker. any speakers and public comment? seeing none, public comment is closed. commissioners? do you have other questions? questions? comments? on either proposal? >> ok. first of all, i wanted to talk about the difference in the revenue generation. as a business, as a small business commissioner, i would look at supervisor avalos's revenue generation, but i am very interested to see more allocation of funds that more

directly benefit. so, they are paying into this. paying for city infrastructure, roads, trees, street cleaning, public safety, generally just things that would be dedicated to our commercial corridors. i also was very pleased to hear supervisor avalos talk about the possibility of rolling back some of the business fees. i think that would be a way to break some of those moneys. i know that -- i would like to suggest that increasing the funding for small business, to bring it up to $700,000, because we are just so tight for money bikaner really achieve although -- we can really achieve what we could do for businesses.

i would support the mayor's continuation of the tax credits. and then in terms of the exemptions, i support the mayor's fees from $1 million to $25 million. >> ok. commissioner riley: i would like to know -- of course i asked supervisor avalos about the businesses impacted. but here on this flier it has this number. is that accurate? >> we have between 50 million and 100 million --

>> does that add up to 946? >> yes. >> how to our rates compared to other cities? >> there is not a marginal rate structure in l.a. and oakland's. oakland is a fairly comparable to ours. it is a little difficult to compare. they're not too dissimilar. the other thing is oakland and l.a. have much smaller small- business exemptions. >> would this make us the most

expensive city to do business in? >> given that we have the highest income tax in california and we're moving to a rate structure that is going to be revenue neutral, then i think it would continue to be the same. commissioner riley: we don't want to lose any business. to put the burden on 946 businesses, i don't know what the impact is going to be. would they leave us? >> in our initial findings, it would nedda's 3000 net new jobs -- net loss 3000 net new jobs. obviously, we're going to reduce that benefit a little bit. we are expecting a under the

mayor's proposal -- and it is probably lower under supervisor avalos's. >> i think it is vitally important that both camps find a single place to land before the legislation goes before the voters. the last thing we want is two ballot measures. i hope there is a lot of working to narrow the gap so we have a single piece of legislation and if there is anything we can do to help with that process, i think we would all be happy to do it. it will be very difficult to support these two things going forward independently. there is a tremendous amount of work that has to go back to all

the financial calculations. the sooner we get there, the sooner we can do legislation to fix the situation. and it seems that we have the political will to do it, and so, let's not get hung up on the details and find a place we can both agree on so we can move forward. president adams: any other commissioners? i agree with commissioner dwight. everyone in san francisco agrees something should be done. i really hope that supervisor avalos and mayor lee and president chiu come together

for one ballot measure. so, any other commissioner comments? do we have a motion on either ballot? >> commissioners, do you want to have any discussion? >> i think we should make our main recommendation that the two group's work together to come up with one measure. i think that is our number one goal. after that, if we want to weigh in on specifics of either side that we liked or with just being part of the final package, i think that's where we should go. commissioner dwight: yes, i just

think we could talk about the details all day long. and this is not the body that is not -- that is going to decide those details. i think we should go away, do your thing. and then if in the final manifestation of the legislation there are things that need to be tweaked and major issues, that would be the time to do it. right now, it does not to as much good because we're talking about shifting sand anyway. let's wait until there is a solid foundation. then we will -- you know, because things are going to move towards the middle, as they normally do. let's find out where that this. >> though i do think both supervisors and the mayor and some of the other supervisors are interested in what the commission thinks about the tax

exclusions and credits, in part because one includes it and one does not. so, i do think it would be beneficial for the commission to provide some sort of directive. and then at least in regard to that particular thing, i do think if the commission in terms of the revenue generation is there -- while another is going to be some hashing -- in terms of the discussion. well i understand your point, and i do see discussion going on, if we don't say much, then what our thoughts are will not be part of the conversation.