The mayor agrees: This city can’t responsibly spend money on homeless services — at least not money gleaned by taxing big business via Prop. C
It’s cold outside. As the sun slips behind the city skyline, more and more people gather here along the fetid streets, huddling on blankets and bedding down in corners.
Zak Franet is inside now, though. The 24-year-old’s small apartment is bright and warm and fastidiously neat. Every so often the plumbing emits a Cookie Monster-like gurgle, but nobody’s complaining. Because before, Franet was outside. Where there is no plumbing.
How did that happen? To borrow Hemingway’s phrase, “gradually, then suddenly.” Franet grew up in a turbulent household. There was abuse, instability, deaths in the family, stints in the juvenile justice system, and expulsions from schools. By the time his teenage years were through, he was homeless and addicted to heroin. Or whatever he could get: “I wasn’t picky,” he says now, sitting on the couch in his apartment.
The never-ending cycle ended two years ago. A tool belt sits at Franet’s feet; his job now is to climb up onto roofs or down into basements, take complete inventories of structures or complexes, and calculate their long-term capital budgeting plans. It’s a mix of brains and brawn and “the classic American story,” Franet says with a wry grin. “Start on the ground floor and work your way up.”
But Franet, truth be told, started out far below the floor. And he didn’t work alone.
He lived and received drug addiction treatment at Walden House. That led to Larkin Street Youth Services, where he received counseling and began earning educational degrees. Larkin connected Franet with shelter, then transitional housing catering to young people with behavioral health issues, and, finally, the studio where he lives today — for which Larkin Street will subsidize a portion of his rent until he can earn enough to pay his own way.
Every last one of the organizations and services that allowed Franet to turn his life around — housed him, treated his addictions, educated him, provided vocational training, fed him, counseled him — stands to gain from Prop. C, the November ballot measure that would raise perhaps $300 million a year by taxing the city’s highest-grossing businesses.
The high-publicity tussle over this measure has resulted in the spectacle of the Clash of the Tech Titans: Marc Benioff — who personally and via his company, Salesforce, has thrown some $6 million behind the measure — doing battle on Twitter with that online platform’s boss, anti-C CEO Jack Dorsey of Twitter and Square. Benioff’s largesse has, very nearly single-handedly, countered a flood of cash from corporations and moguls less keen on subjecting themselves to taxation for the greater good.
The tack taken by those opposed to the tax is simple and effective: Ridicule the notion of spending more on homeless services by denigrating the quality of the services we now provide, and bemoan the “insane” proposition of throwing more money to “failed” and “unaccountable” programs and service providers (unlike prior ballot measures, the money ain’t yours, it’s Marc Benioff’s and Jack Dorsey’s — but that’s not mentioned).
The No on C campaign belittles the very notion of competent government; it borders on nihilism. And this message is, bewilderingly, reiterated by its government allies, who are, amazingly, claiming that they can’t be trusted with Benioff and Dorsey’s money. Even — and especially — our mayor, London Breed.
For Franet, it’s hard not to take this personally. The programs that saved his life are described as “failed”; service providers subjected to a formidable amount of scrutiny, often from state and federal overseers, are described as “unaccountable.” The game plan is to inculcate San Franciscans on the utter ineptitude of government to solve any problem — so why try?
“I have a fundamental issue with almost every talking point played against” Prop. C, Franet says. “They’re damaging and harmful and hypocritical in some cases.”
The sink emits a Cookie Monster moan, which throws everyone off for a moment. Franet collects himself. All of this is even more hurtful to him, individually, because his entré into civic participation in this city was working as a field agent for Breed’s successful supervisorial re-election campaign — while he was still living in a shelter.
He takes a deep breath: “I’m all for accountability. I pay taxes.”
“But,” continues Franet, “for someone in my position, ‘accountability’ means someone I love is getting a bed; my little sister is on a waitlist now in a shelter.”
“There are,” he continues with a wan smile, “limited resources.”
There’s an old saying in politics: When you’re explaining, you’re losing.
The No on C campaign doesn’t need to explain and it doesn’t need you to think. It needs you to feel. Its ads are plastered with scenes of San Francisco’s ubiquitous tent encampments. Our government has spent billions over the decades on its homeless population — and look at us now! Our residents are earning upper-class salaries to afford middle-class lives — and stepping over needles and feces and homeless people … who are getting a hand-out! And now they want more money. MORE! ALWAYS MORE! (Benioff and Dorsey’s money — but, again, that’s left unsaid).
Let the record show that Prop. C would raise the city’s expenditures on homeless issues from 3 percent of its budget to 6 percent — addressing San Francisco’s consensus No. 1 problem. More money is, in fact, a prime solution to the problem of not having enough money. And no serious person claims this city currently has sufficient resources to bring its homeless problem under control.
This leads to the second line of attack against Prop. C: That our funds have been wasted, that the money is unaccounted for — look at us now! This is, again, an argument that works best if you feel and don’t think.
If you do think, you might conclude that, while San Francisco’s homeless count has remained stubbornly stagnant, other west coast cities have seen theirs explode — even while our city is ground zero for unaffordability. And that’s significant because, despite what you saw on the Internet, you can’t just divide the city’s homeless budget by its homeless count and come up with a gaudy per-individual spending total and conclude we’ve made zero progress. The majority of our homeless budget goes to the formerly homeless like Franet; it goes to keep people housed.
If you take the No on C mantra to its logical conclusion — Why are we paying for any of this at all? Look at us now! — and turned off the spigot, the result would be pushing thousands of people like Franet out of the houses where you don’t see them and into the streets where you do. And you’d still be paying for them. You’d be paying more — it costs more to pay for Emergency Room visits and jail cells than to house people and deal with them when they’re stabilized. The Budget and Legislative Analyst quantified as much at the behest of Supervisor Mark Farrell two years ago.
Whatever problems we have with our homeless services — and there are many, namely a lack of housing — not knowing where the money is going or large-scale mismanagement of funds is not among them.
Our elected officials, in fact, didn’t seem so concerned with the black hole of unaccountable homeless services in 2016 when they were pushing Props. J and K to amass some $150 million a year for homeless and transit issues — not by taxing Marc Benioff and Jack Dorsey but you, via a sales tax hike.
And our elected officials certainly didn’t see the need to throw the Department of Homelessness and Supportive Housing and nonprofit homeless service providers under the bus as recently as June, when many of the city’s moderate politicians were backing Proposition D. This measure would have sextupled the city’s commercial rent tax to generate $70 million for homeless and housing funds. Mayoral candidate London Breed’s serene visage was featured prominently on the ads for this ultimately unsuccessful measure.
So, yes: When she wasn’t mayor and didn’t control the allocation of the funds, Breed wanted to raise taxes to pay for homeless services. But now that she is mayor and does control the allocation of the funds, Breed is concerned about unaccountability.
That’s odd. If you think about it.
Apparently, it all depends on who’s being taxed. It’s not you, which J and K would’ve done, or commercial real-estate interests, which D would’ve done, but big business — including our city’s ascendant tech outfits.
Every financial deal in this town for the past decade or so has benefitted these tech companies. Dorsey’s outfits have gained from no fewer than three tax breaks: A mid-Market tax incentive; a holiday on taxing the stock options awarded to pre-IPO employees; and the city’s adoption of a gross receipts tax in lieu of a payroll tax in 2012.
Dorsey, Stripe CEO Patrick Collison and others are now arguing that, under San Francisco’s gross receipts tax structure, their companies will be dinged by Prop. C. But this tax framework was championed by the tech industry a scant six years ago, and 71 percent of the voters acquiesced and gave them what they wanted.
And not without consequences: Low-employee, high-revenue outfits like banks, real-estate companies, or hedge funds took a bath, and are now paying a higher percentage of the city’s taxes, while tech companies are paying less. Not to mention the ancillary effects of those tech titans’ wild success — the house a teenage Zak Franet rented six years ago for $1,200 a month now goes for three times that; in the interregnum, he descended into homelessness and clawed his way out again. Without subsidies, he and many others will be forced into the streets and/or out of San Francisco.
But, in San Francisco, in 2018, Dorsey, a CEO with an estimated worth of $5.3 billion, is arguing that the funding mechanism for those subsidies would be an inequitable tax burden — to his second major company.
Well, that’s a long ways from Dorsey quoting Gandhi about “being the change you wish to see in the world” in 2012 — the year we all voted him and others that gross receipts tax.
That’s something to think about. Don’t forget to think. Don’t forget to vote.