The San Francisco Chronicle
SAN FRANCISCO — If San Francisco is going to offer tax breaks to spur hiring, what group of job seekers should be singled out for special treatment? It could be those recently laid off, maybe the Occupy Wall Streeters just out of college. And what about returning veterans, the disabled or single parent bread-winners?
Sorry, none is on the list. Under a plan introduced this week, the city is considering a tax sweetener for businesses that hire felons newly release from prison.
There’s no question this group faces challenges in finding work, especially in a downbeat economic climate with a jobless rate of 10 percent. An estimated 70 percent of released felons return to jail after six months in California with the number in San Francisco slightly smaller. These ex-cons have a troubled past, few skills and little education, a profile that makes employers skittish about hiring.
But others in a very long unemployment line must wonder why the city would give special treatment to people who’ve run afoul of the law through their own actions. The suggested break from the city’s payroll tax - totaling $10,000 per hire - isn’t being offered to any other disadvantaged subgroup.
The plan comes with a political context. Its prime sponsor, Supervisor Ross Mirkarimi, is running for sheriff. Under Sacramento realignment policies, an estimated 650 state prison inmates will be shipped back to San Francisco in the coming year, with the next sheriff in charge of their release and oversight.
In July, Mirkarimi proposed designating felons as a “protected class,” a designation that barred landlords and employers from discriminating against the group. He later dropped the idea for legal reasons.
His latest proposal, which goes to the Board of Supervisors this week, raises issues of fairness and tax policy that are worth deeper consideration. The city’s payroll tax might be as big a problem in any job-creation debate as the problem of former inmates finding a better future.
Under the tax, employers face a 1.25 percent tax on compensation. The more you hire, the more you pay. But the tax brings in $390 million per year for the city, making it hard to reject without a solid replacement.
Devising a loophole, even a small one to aid the hiring of felons, feeds into the continuance of the tax. It would be better to follow through on suggestions from nearly every candidate now running for mayor to find a replacement for the payroll tax.
As for felons, there must be better options to reintegrate them into society. There need to be more effective job and educational opportunities, and the state’s enormous prison bureaucracy must be held accountable for a sky-high recidivism rate. But a tax break for felons is the wrong way to go.
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