Proposition I - Create an Office of Economic Analysis; Economic Development Plan

What it does

This proposed ordinance would create an Office of Economic Analysis under the controller, which would prepare analyses of the potential economic impacts of legislation proposed at the Board of Supervisors. In addition, it would direct the Economic and Workforce Development Department (formerly the Mayor's Office of Economic Development) to periodically prepare and economic development plan for the City. The measure was placed on the ballot with the signatures of four supervisors.

Why it is on the ballot

San Francisco does not currently have a provision for economic-impact review of pending legislation. The Board of Supervisors budget analyst conducts reviews of the fiscal implications of some proposals, but generally does not analyze the impacts of legislation for the city's economy.

The City also does not require the preparation of an economic plan focused on employment and industry growth. While the Economic and Workforce Development Department and the Planning Department are responsible for activities related to economic development, they focus primarily on business recruitment retention and land-use issues, respectively.

Several recent legislative proposals, including the prohibition on formula retail ("chain stores") in some parts of the city prompted opponents of that legislation to call for more economic analysis and planning.

Pros

Those who support Proposition I state:

• Legislators need more information to understand the economic implications of their actions.
• The City needs to develop a long-term economic development strategy to improve employment and well-being among city residents, and to grow the City's tax base. This is best done by the Economic and Workforce Development Department, since it will be integrated with its experience and efforts in business attraction and retention.
• The measure allows the Board of Supervisors to make changes if it is not functioning successfully. Too often, ballot ordinances become locked into place, even when they could be easily improved through minor amendments.
• The controller's office is the right location within City government for the legislative review responsibility. The controller is a 10-year appointment, and thus is more insulated from political factors than other departments. This is important in order to have unbiased, analytically based reviews of legislation.

Cons

Those who oppose Proposition I state:

• It is possible that the legislative review proposed by this measure will be used to stall legislation, rather than to inform the Board of Supervisors about its effects as intended.
• This measure gives economic concerns too privileged a role in the policy-making process. It makes sense to consider economic factors, but placing too great a focus on the economic implications of legislation could unintentionally detract attention from other important issues, such as environmental or neighborhood-character concerns.
• Although it makes sense to plan for economic development, the plan created by this measure will not be sufficiently integrated with other City planning efforts. Since it will be developed outside of the Planning Department, which is responsible for much of the planning related to physical development, it will have little impact.
• The measure was placed on the ballot at the last minute, without public hearings. This is not an appropriate or democratic way of creating public policy.

SPUR's analysis

This proposed ordinance would create a new office under the controller, headed by two economists. The mayor and Board of Supervisors would make recommendations from a list of eligible candidates to the controller as to who should fill these positions. Once established, the office would be charged with reviewing the impacts of legislative proposals on "business attraction and retention, job creation, tax and fee revenues to the City, and other matters relating to the overall economic health of the City." The office would have 30 days to prepare an analysis after legislation is introduced, although the president of the Board of Supervisors could extend that time limit. This office would not review all legislation before the Board of Supervisors, only those pieces that it determines may have a "material economic impact" on the city.

Proposition I would also require the Economic and Workforce Development Department (formerly the Mayor's Office of Economic Development) to prepare a plan, updated at least every three years and approved by the Board of Supervisors, which would address a range of topics including: the sources of City tax revenue by industry and firm type; industries primed to create jobs in the city; strategies for protecting small businesses; goals for job growth and wage levels; and strategies for increasing employment opportunities for people with disabilities and who are economically disadvantaged. The economic plan would be used to inform the legislative review process discussed above that is established by this measure. The department would also be required to produce a survey of industries and employers that will identify policy barriers to employment attraction and retention.

Ordinances approved by the voters normally cannot be changed without a subsequent ballot measure. However, this measure contains a specific provision allowing the Board of Supervisors to modify the measure with a majority vote in order to better achieve the measure's goals.

As we learned after the collapse of the dot-com economy a few years ago, San Francisco cannot continue to take its economic well-being for granted. While some economic issues are beyond the control of City government, many City policies have both short- and long-term implications for job availability, tax revenues needed to provide public services, and our ability to remain at the core of our regional economy. The measure will provide the City with some of the information it needs to make sound decisions about San Francisco 's long-term economic health. Of course, this information must be balanced by other concerns including environmental issues, equity, and quality of life. But having this information available will be a step forward for City government. Despite the fact that this measure was placed on the ballot at the last minute without public review, it takes the commendable step of allowing modifications by a majority vote of the Board of Supervisors. This "future amendability" clause should be the norm for all legislation on the ballot.

SPUR recommends a "Yes" vote on Proposition I.