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Indybay Feature
Losing San Francisco Business Tax Settlement Less Costly Than Settlement
by The San Francisco Sentinel (sentinel [at]
Sunday Apr 15th, 2001 7:57 PM
In the interests of being good shephards, San Francisco supervisors should oppose Business Tax Settlement -- losing in court costs less.
Tomorrow's vote on the Business Tax Settlement is a rite of passage for the new Board of Supervisors, as they move from being visionary to deadly serious decision makers.

Everyday San Franciscans will feel that decision, and it will be forever a mark of leadership capacity.

In the interest of being good shepherds, supervisors should oppose the settlement.

Those supervisors favoring the settlement, led by Mark Leno and Aaron Peskin, argue it's dangerously imprudent to risk greater financial loss by fighting the case in court.

Ability to discern the actual risk separates spoon-fed orators, from leaders proving an independent mind.

The spoon-fed pointed to a possible $800 million (then $300) emaciation of city funds as too high for their risk threshold -- their shortcoming wasn't laudable frugality, it was lack of independent research.

Supervisors should have been tipped off to the need for independent research by the liability figure being a moving target, by the City Attorney being unable to name a tax expert it consulted, and that office having no tax attorney on its staff.

Following prodding of an attorney who worked in that office, and also for the Internal Revenue Service, the City Attorney now predicts a loss in court would cost the city no more than $100 million.

The settlement would cost a permanent loss of $25 million every year in tax revenue -- separate from a pay out of $103 million, plus a probable $30 million more to Johnny-come-lately businesses joining the lawsuit.

Losing the case in court would cost less than the settlement.

Adding insult to arrogance, many of the businesses suing the city have multimillion dollar contracts with the city, using that income to create a still growing San Francisco diaspora through political contributions.

Any loss of service will be felt with the memory of those supervisors who didn't rise to doing their own work.

Hats off to Matt Gonzalez, Gerardo Sandoval, and Chris Daly for toughing it out.
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