San Francisco Mayor Ed Lee banks on tech startups

SAN FRANCISCO--"San Francisco is the innovation capital of the world," Mayor Ed Lee proclaimed to more that 3,000 techies gathered here at the TechCrunch Disrupt conference. He was preaching to the choir as he previewed a map showing more than 800 startups located in San Francisco. The map is part of InnovateSF, a month-long series of events in October to promote tech innovation in the city.

Legendary angel investor Ron Conway echoed Lee's cheerleading for San Francisco as a capital of Silicon Valley. "When Pinterest moved to San Francisco (from Palo Alto, Calif.) a month ago, it was another reminder of the migration of tech companies to urban areas," Conway said. "San Francisco is becoming the capital of Silicon Valley."

"Tech companies are helping redo central Market Street--it used to be our skid row," Lee added, alluding to Twitter building its headquarters there. He noted that San Francisco has seen an annual growth of 30 percent in tech jobs, with 32,000 jobs filled at 1,600 companies. 

As part of the city's incentive to bring in more businesses and spur job growth, Lee and Conway pitched for a "yes" vote on Proposition E, which reduces payroll taxes, in the forthcoming election. "Proposition E reduces payroll tax, switching to gross receipts, and we can take the money to create new jobs," Lee said. 

Currently San Francisco businesses pay a flat 1.5 percent tax on payroll costs, with the exception of small business with less than $250,000 in payroll. The Proposition E tax rate would be 0.075-percent to 0.650-percent of gross receipts, with businesses earning less than $1 million in annual revenue exempt from the tax. Businesses with offices in San Francisco but headquarters outside of the city would pay the gross receipts tax based on payroll costs, which is about 1.4 percent. 

"The biggest gift the tech community today can give San Francisco is passing Proposition E to create jobs in San Francisco and small business," Conway said. "A hundred years from now, San Francisco will continue to be the innovation capital of the world."

Another tech initiative in San Francisco is to deploy tablets in the hands of police officers in patrol cars and streets so they don't spend 40 percent of their time in stations writing reports. "I want that revolution...we can change things with technology," Lee said, echoing Newark Mayor Cory Booker, who Monday told the TechCrunch Disrupt audience that technology can help change America at a more rapid pace.