Around The Capitol

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THE NOONER for September 17, 2014

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Sorry, this is a long one, but I find the fight in San Francisco very interesting and there are lots of twists and turns!



AD17 (East San Francisco): It's been awhile since I've written about the campaigns of the two David C. supervisors, both from immigrant families, and attended Harvard Law together.

Tech buddies Reid Hoffman and Ron Conway have anted up again in their campaign to defeat San Francisco Supervisor David Campos, adding $300,000 and $49,000 respectively to their independent expenditure account. Hoffman, founder of LinkedIn and a prolific angel investor, blogged when launching the effort in May that the reason was his disgust with Campos's vote not to force Sheriff Ross Mirkarimi from office following his domestic violence conviction.

However, it's fairly apparent that the real reason for Hoffman's half-million against Campos is the fight being waged on the streets of San Francisco between the tech industry and advocates concerned with the impact of gentrification. Campos has made this fight a central theme in his campaign, while opponent David Chiu has been perceived as friendly to the industry. 

And, there are several fights being played out.

In the race among two Democrats in a safe seat, labor is largely split between service workers (including teachers and nurses) who support Campos and construction trades who support Chiu, with AFSCME dual-endorsing. This makes sense if you think about the fight in San Francisco, with some benefitting from all of the cranes in SF's skyline and others fearing that their rent-controlled apartment will be converted to a condo rented out on Airbnb.

Service workers feel squeezed, while trades getting work by the building boom of million-dollar condos to be occupied by tech workers. And, then there is the underemployed and unemployed. The tech workers have earned anger by driving up rents (average one bedroom rent is $2,897) and boarding nondescript private buses for their daily treks to the sprawling campuses of the Silicon Valley. The spacious and wi-fi equipped tech buses are a far different experience than riding Muni. Campos has fought to require more environmental review for the buses, which Chiu opposed.

Beyond the buses is the fight over a break of the city's 1.5% payroll tax given to new employers who move to Mid-Market, which is the preferred name by developers of neighborhoods including the Tenderloin, SoMa, and Civic Center. The target of the payroll-tax break was Twitter, which was threatening to leave San Francisco to find the space of new headquarters. Bloomberg reports that seventeen companies, including Uber and Square, have moved to Mid-Market since the break went into effect. 

Campos is the leading elected voice in the effort to repeal the payroll-tax break, which critics of the break say will eventually cost the city $100 million. Meanwhile, crime has dropped as have vacancy rates, although some areas have had mixed results.

Perhaps nowhere in America is the economic contrast starker than in Mid-Market San Francisco. The 1937 art deco building that houses Twitter on Market Street has several single room occupancy (SRO) hotels nearby, which house the people on the borderline of homelessness. Hipsters wearing Bose headphones running to the drugstore pass seemingly lifeless bodies lying in the corners.

More after the jump...


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Campos and Chiu are also tangling over legislation introduced by Chiu to regulate Airbnb in San Francisco, which operates in an extra-legal matter. The company is headquartered one mile from the Twitter headquarters, and has a huge share of its business in San Franciso. For tonight, there are currently 665 available rentals on Airbnb for tonight in San Francisco. With a 3% fee on those rentals and an average of about $300/night, that's $6,000 in Airbnb revenue for one night, and $2.2 million for a year--in one city. And, that doesn't include those already rented! The Chron found 5,000 Airbnb in San Francisco in a great data analysis.

Tenant advocacy groups supporting Campos want tight limits on the short-term housing rentals, as well as larger financial burdens on owners to limit its growth in the city.

The issue is currently before the board's Land Use Committee, which couldn't agree on legislation at a 7-hour meeting on Monday. They return in two weeks to consider legislation, which is after my extra-legal stay at an Airbnb in San Francisco this weekend. The one I am at right now in Pacific Grove does have a posted Transit Occupancy Tax certificate, and it was paid when I made the rental.  

Oh, did I mention that Ron Conway's SVAngel was an investor in Airbnb's Series A, as was Greylock Partners, where you'll find Reid Hoffman's office? Conway also was in on the Series A of Twitter

The two have also tangled over Uber and Lyft, which the SFChron reports today is destroying the city's taxi industry, with a 65% drop in taxi trips in 15 months. Some people celebrate that, while others fear the impact of the less-regulated start-up shared rides.

San Francisco is a unique place, including its political structure as the state's only City and County, which became consolidated in 1856 as the city's population boomed during the Gold Rush. This means that supervisors have authority over issues not found elsewhere. It also has the only local payroll tax in California.

But, isn't the number of tech companies in San Francisco relatively small compared to the Peninsula and Silicon Valley? Yes, but there's more to it.

The tech industry thrives on young talent recruited from across the country or who move to the area to seek the start-up dream. And, the same youthful energy that burns the midnight oil love the vibrancy of San Francisco. Living on the Peninsula is something one does when starting a family or want a lawn, hopefully, after striking oil in the start-up.

Thus, Hoffman and Ron Conway--a San Francisco resident and hugely successful venture capitalist--have a huge interest in whether San Francisco will continue to welcome these new residents and make other decisions benefiting their investments. Conway led the independent expenditure effort that collected $600,000, mostly from wealthy technology leaders and investors, to help Ed Lee become mayor.

There won't be a huge impact in Sacramento by the outcome of the race between David Campos and David Chiu. The election and the money are more about local decisions regarding zoning, tax breaks, transportation, and housing. But, don't understate the impact of the race on the equally compelling arguments of gentrification and economic development, and whoever wins will have increased momentum in forthcoming decisions in the City by the Bay.

ANOTHER LIST: : The Capitol's 100 Best & Brightest [John Hrabe]

DOUBLE-X FACTOR: The Leadership California Institute is out with "Women 2014: The Status of Women in California Government"

CD52 (San Diego): Poll: Scott Peters and Carl DeMaio tied [Mark Walker @ UTSD]

#CAKEDAY: Happy birthday to Ed Chau, Duane Dichiara, Beth Gaines, Sharon Quirk-Silva, and Lawson Stuart!




  • Corporate sponsorships available for the Global War on Terror Traveling Wall at Capitol Park Nov. 7-11. Event sponsored by Assemblyman Cooley. Wall is a memorial to those killed in the Global War on Terror. Contact: Pete Conaty, 916 492-0550,
  • Join the Los Angeles County Young Democrats for our Annual Laurel Awards honoring Democrat of the Year Speaker Toni Atkins and Rising Star Long Beach Mayor Robert Garcia. More Information and Tickets Available at
  • ACLU of California seeks a Legislative Advocate in its Sacramento office. Salary dependent on experience. To view job announcement and application instructions, visit here.
  • Water District campaign in Santa Clara County seeking hourly paid canvassers to play a critical role in ensuring candidate’s message reaches targeted voters in the District this November. Responsibilities include door to door canvassing and other outreach efforts. Send resume and cover letter indicating availability to For more information go[



Barbara Boxer re-election run looking unlikely
State Democratic Party Chairman John Burton, Boxer's longtime friend and mentor, says she has not informed him of her intentions. [...] at a Democratic Party fundraiser in San Francisco on Thursday night, co-hosted by Lt. Gov. Gavin Newsom and Attorney General Kamala Harris, Burton told the crowd, "When we meet here four years from tonight, we could be looking at one California governor and one U.S. senator." On the Democratic side, there's billionaire environmentalist Tom Steyer, Facebook executive Sheryl Sandberg, L.A. Mayor Eric Garcetti, outgoing Controller John Chiang and University of California President Janet Napolitano, a former Arizona governor and homeland security chief. State and federal agencies have been sent back to the starting line after the draft of the required report on the environmental effects of Gov. Jerry Brown's giant water-diversion tunnels came up short. The California Department of Water Resources, the federal Bureau of Reclamation, and state and federal fish and wildlife agencies spent three years producing a 45,000-page draft for the federal Environmental Protection Agency to review. Despite an arbitration ruling ordering Alber to pack up and leave, Presidio Trust officials say he's refused to go - instead demanding $300,000 in moving expenses and starting a social media campaign that has enlisted more than 300 supporters.

Sen. Cannella Issues Statement on Governor Brown Signing Groundwater Legislation
s signing of groundwater management legislation, Assembly Bill 1739 and Senate Bills 1168 and 1319:

Uber takes turn toward old-school politics
Uber bills itself as a leader in tech innovation, but when it came to fighting mandated insurance for its drivers, the ride-share giant turned to good old-fashioned hardball politics. The target: state Assemblywoman Susan Bonilla, D-Concord, author of an insurance-company-backed bill to require more comprehensive - and more expensive - liability insurance for ride-share drivers. Besides working the Capitol hard, Uber carpet-bombed mailers in Bonilla's district - as well as the state Senate district where she plans to run next year in the likely event state Sen. Mark DeSaulnier, D-Concord, is elected to Congress in November. Thanks to the repair work, Napa can expect "a burst of job creation that will support the local economy," said Gus Faucher, a senior economist for PNC Financial Services Group. Republicans were against the change from the outset, but then the Democratic-friendly California Labor Federation weighed in as well, saying the changes would "create uncertainty and confusion for those engaged in ballot measure campaigns." Billing himself as a new-style politician, Ro Khanna pledged not to take special-interest money in his South Bay congressional campaign against fellow Democrat Rep. Mike Honda. Khanna donor Ash Chopra recently filed federal papers to form a super PAC, Californians for Innovation, to back the challenger. [...] while Khanna has stuck to his promise not to accept PAC money, he's no longer pressing Honda to join him in signing a "people's pledge" to bar outside donors from the 17th Congressional District race.

Jerry Brown signs bill removing language of Prop. 187
David Siders @
Gov. Jerry Brown has signed legislation repealing from state law unenforceable provisions of Proposition 187, the 1994 initiative later overturned by the courts, to restrict public services to undocumented immigrants.

Senator Tom Berryhill responds to Governor Brown signing groundwater legislation
"Not only is this a slap in the face to rural California communities whose basic water needs lose out year after year in favor of environmental concerns; it will bring much uncertainty to many mountain area folks who have relied on wells for generations as their main source of drinking water. Giving bureaucrats the keys to the tap is a dangerous precedent that I fear we will regret for years to come."

Gov. Jerry Brown To Sign California Film Tax Credit Bill
Richard Verrier @
Gov. Jerry Brown is poised to put his signature to a bill that would triple annual funding for California's film and TV tax credit program.

Jerry Brown signs groundwater legislation
David Siders @
Gov. Jerry Brown signed legislation Tuesday enacting sweeping new regulations on groundwater pumping in California, making the state the last in the West to regulate the practice.

Blue Shield to fete some members in style at new stadium
Blue Shield of California says its aim is "to ensure all Californians have access to high-quality health care at an affordable price" - and apparently that includes spending no less than $2.5 million for a luxury box at Levi's Stadium. For that kind of money, suite owners get 20 tickets to each game, parking passes, field-level access during games and even a chance to take a road trip with the team. Jamie Court of Consumer Watchdog, which is pushing for the passage of Proposition 45 - a November ballot initiative requiring health care companies to get approval for rate hikes in California - calls Blue Shield's football appetite "conspicuous consumption in an industry that claims there is not enough to go around." Recent polls showed that even with all the criticism of the pork-laden $11 million original bond, it still stood a pretty good chance of winning voter approval, thanks in large part to the drought. The filing by attorney James Brosnahan says the undercover agent had "inquired about hosting a $250,000 fundraiser for a senior elected federal official who visited San Francisco in May 2012." While we don't have any direct confirmation of the connection, we can tell you that Vice President Joe Biden was in town on May 28, 2012, for a Democratic National Committee fundraiser at the home of billionaire hedge fund manager and Democratic donor Tom Steyer. Paul McCartney's concert the other night held special significance for San Francisco Mayor Ed Lee, who first brought up the idea of a big send-off for Candlestick Park when the two met briefly at the Outside Lands festival last year.

California water bond, budget reserve campaign committee raises $650,000
Jim Miller @
A campaign committee to pass a $7.5 billion water bond and budget reserve ballot measure championed by Gov. Jerry Brown received its first infusion of money late Tuesday.

California plastic-bag ban bill hung up in labor squabble
The move to ban plastic bags at California grocery and other retail stores has fallen victim in the Legislature to labor's fight with nonunion stores like Walmart and the pending merger of Safeway and Albertsons. The union, fearing the consolidation will kill jobs, has been pushing the Legislature for a "retention bill" to help protect positions, or at least guarantee financial help to workers if they are laid off. "There's no enforcement mechanism to ensure the 10-cent fee stays at the local store and helps the local community," the union said in a letter to Assembly Speaker Toni Atkins, D-San Diego. State Sen. Alex Padilla, D-Pacoima (Los Angeles County), who is pushing for the statewide system - which would include warnings on your smartphone - is suggesting using a mix of federal funds, money from the $7 billion water bond on the November ballot or even high-speed-rail money to cover the setup costs. Emergency Services head Mark Ghilarducci is hoping to put together a public-private partnership to cover the costs - one that would probably include a charge for users. News that crisis communications manager Mark Fabiani has joined indicted Texas Gov. Rick Perry's legal team has political insiders scratching their heads. The two "masters of disaster" also jointly represent Democratic hedge fund manager and environmental activist Tom Steyer, who is spending millions on ads to fight climate change naysayers - even as Perry has called himself a climate change "skeptic."

CalPERS’ pension rules would OK 99 types of extra pay to count toward pensions
Jon Ortiz @
More than a year after Gov. Jerry Brown signed a law he said would tamp down pension spiking, the state’s biggest public pension fund is on the verge of adopting rules critics say would undermine its intent.

Immigrant children may get free legal help
State Attorney General Kamala Harris is asking private law firms to provide free legal help to the wave of Central American children pouring into the state. Officials tell us that nine out of 10 children who appear at immigration hearings without a lawyer are sent home - while only about half of those who have an attorney are deported. Just two months after voters overwhelmingly said "no wall on the waterfront," developers of a proposed $100 million housing and office development at Pier 70 have scored the key endorsement of the Sierra Club in their bid to exceed height limits in the area. Out-of-state and international students are an attractive commodity for UC, because they pay $22,878 annually on top of the in-state tuition of $12,972. Former mayor and current Chronicle columnist Willie Brown is being paid $100,000 to represent developers in their fight to roll back the special tax assessment for the new downtown Transbay Transit Center, according filings with the city Ethics Commission. Boston Properties and a half-dozen other developers are paying Brown to try to cut the estimated $1.4 billion assessment they're being asked to pay on the project, thanks to skyrocketing property values.

Senator Fuller Disappointed Groundwater Power Grab Signed into Law
Today, Senator Jean Fuller (R-Bakersfield) released the following statement in opposition to a package of bills that will significantly change groundwater laws in California and result in a loss of local control:

Dignity Health Spends Big At Levi's Stadium - Sfgate
We have re-imagined our design in a bold new way. Before we roll it out for everyone, we are giving select readers an opportunity to try out the new design. We welcome your feedback.

LAUSD Police To Give Up Some Weaponry Obtained In Federal Program
Stephen Ceasar @
Los Angeles Unified school police officials said Tuesday that the department will relinquish some of the military weaponry it acquired through a federal program that furnishes local law enforcement with surplus equipment. The move comes as education and civil rights groups have called on the U.S. Department of Defense to halt the practice for schools.

Bowen vows to press on as election nears
Jim Miller @
Secretary of State Debra Bowen was in the office Monday, two days after her struggles with depression became public, making clear that she intends to oversee November balloting and finish out her term as California’s chief elections officer. The Capitol's 100 Best
Last month, released Part I of our list of The Capitol's Best. Now, the complete list of 100 professionals – at every level – who consistently do a good job and contribute to the Capitol community but don't seem to get enough credit for their hard work.

CPUC commissioner Florio avoids consumer advocates' wrath
Consumer advocates who are calling for the scalp of California Public Utilities Commission President Mike Peevey for back-channel talks with Pacific Gas and Electric Co. appear to be a lot more forgiving when it comes to their own former colleague's conduct. At issue: PG&E's attempts to cajole state officials to pick its preferred judge to decide how much customers will have to pay toward the utility's post-San Bruno disaster pipeline improvements. In one e-mail, Florio told a PG&E executive that "I'll do what I can" to bounce an administrative law judge who wasn't to the utility's liking. [...] what's the difference between what Florio did and the role played by Peevey, whose chief of staff was in regular communication with PG&E about which judge would hear the rate case? "Commissioner Peevey's actions are part of a clear and long pattern that shows a cozy relationship with the utilities," Toney said. According to the sponsor, Yuba County GOP Assemblyman (and congressional candidate) Dan Logue, small-business owners "account for 99 percent of the state's employers."

Watch: Sacramento City Council member Steve Cohn on Assembly goals
Jeremy B. White @
Sacramento City Council member Steve Cohn stopped by The Bee Capitol Bureau on Tuesday to talk about the issues underlying his campaign for an open state Assembly seat. A broader transcript of the interview will be available in Tuesday’s paper, but here you can watch Cohn touch on a few topics of interest.

S.F. Fire Department hires private ambulances amid major shortage
The call went out when 12 fire engine companies that had been dispatched to emergencies throughout the city Aug. 30 were left without any way to get the people they were treating to hospitals. The ambulance flare-out came just three days after frustrated representatives of the firefighters union presented the Fire Commission with records showing that there were 374 occasions in August alone when it took more than 20 minutes for Fire Department ambulances to arrive after being called. Lefty David Campos' state Assembly campaign is buzzing over a new poll that has him running even with the more moderate David Chiu, who finished five points ahead of his fellow supervisor in the June primary. The poll, paid for by a statewide business group - and conducted by Fairbank, Maslin, Maullin, Metz and Associates - has both Chiu and Campos with 37 percent of the vote, with 26 percent undecided, in the race to replace termed-out Assemblyman Tom Ammiano. Waste Management has hit the streets of Oakland with a paid signature-gathering drive to stop the city from awarding a $1 billion trash hauling and recycling contract to a competitor. Political consultant Larry Tramutola, who is heading the Waste Management campaign - and who is also getting political help from former City Councilman Ignacio De La Fuente - says it's unclear whether the city could go ahead with the new contract next year if the measure qualifies. [...] over the weekend, supporters of the new contract were out in force handing out their own "fact sheet" - making life tough for petition gatherers on north Oakland's Lakeshore Drive.