01/26/10 – Mayor Newsom today spoke in support of the three job creation and retention measures described during his recent State of the City address and introduced to the Board of Supervisors. The measures are aimed at helping small and mid-sized businesses create and retain local jobs – an extension of our City’s biotech tax credit, a payroll tax exemption for new hires, and tax incentives for small businesses that provide health care to their employees.

Mayor Newsom and Supervisor Michael Alioto-Pier have submitted these three business tax-lowering proposals to the Board’s Budget and Finance Committee, as the first step to a full board vote. However, the Committee has refused to calendar the three job creation and job retention measures for a hearing.

“Although San Francisco’s unemployment rate remains one of the lowest in the state, at 9.4%, it is still unacceptably high,” said Mayor Newsom. “With tens of thousands of San Franciscans looking for work, we must put aside our ideological differences and do whatever it takes to grow our local economy and create jobs. I once again call on the Board of Supervisors to schedule hearings for these measures.”

“The new jobs payroll tax exemption is ‘one of the most cost-effective ways’ for the City to spur private sector job-growth,” said Ted Egan, the City’s Chief Economist.

Mayor Newsom emphasized the critical need for a payroll tax exemption for new hires. The new Jobs Payroll Tax Exclusion would cap a businesses’ payroll tax liability at 2009 level for two years. Therefore, any business that creates a job in 2010 or 2011 would not have to pay payroll tax on that hire until 2012. By eliminating the payroll tax on new jobs, the City will remove a disincentive to create a job in this down economy

In support of the payroll tax exemption, Mayor Newsom was joined Patrick Connolly, CEO of Obscura Digital, a quickly growing technology firm based in SOMA. Obscura Digital currently has 40 employees and over 100 contractors. Connolly cited the potential of the payroll tax exemption as a means to weather the economic downturn, continue contributing to the economy, and an incentive to hire San Franciscans. The payroll tax exemption for new hires would allow Obscura Digital to bring on an estimated 20 new employees.