Every year, companies must apply to obtain the tax break, and those with payrolls in excess of $1 million must also negotiate a community benefit agreement.
After 14 mid-Market companies received a combined $1.9 million tax break and six signed agreements for the 2012 tax year, the application process has begun again. Six technology companies will have community benefit agreements up for review Thursday by a local citizens advisory committee.
The agreements were included as a requirement to obtain the mid-Market tax break in an effort to soften political opposition to the proposal, which was approved by the Board of Supervisors in April 2011. The tax break exempts employers from having to pay the 1.5 percent levy on new hires. As rents soar, evictions rise and cost-of-living increases in The City, the technology sector is receiving much of the blame, which made the kickoff of the 2014 agreement process in November quite tense.
Twitter’s 2013 agreement had 25 requirements, of which nearly all were completed, according to an October progress report. For example, the company gave $75,000 to seven nonprofits, donated 40 computers to local schools and granted $55,000 in promotional tweets to local nonprofits. Twitter employees also volunteered with organizations such as Project Homeless Connect.
One required provision not completed by the company related to employees participating in at least two events per year targeted at economically disadvantaged people and addressing how to gain employment at such companies. The reason: “The [human resources] team is under-resourced but hopes to host events like this in the near future,” a company statement said.
Some local-hiring advocates like Joshua Arce of the advocacy group Brightline Defense, who was instrumental in crafting a mandatory local-hiring law for publicly funded construction projects, argue that local hiring should be a focus for technology companies.
“A lot of good has come from these agreements but jobs need to be front and center,” Arce said, adding that technology companies’ local hiring of low-income residents has been “truly laughable.”
Six of the proposed 2014 community agreements will be reviewed Thursday by the Citizens Advisory Committee for the Central Market-Tenderloin Area. They are for returning tax break recipients including Microsoft/Yammer, One Kings Lane, Twitter and Zendesk, as well as two new applicants, Advsor and Spotify.