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San Diego Sales Tax Proposal Still Alive

Audio

Aired 7/30/10

Will San Diego voters be asked to decide on a ballot measure that includes a sales tax increase, and a package of financial reforms?

GLORIA PENNER (Host): I’m Gloria Penner. I’m joined by the editors at the roundtable These Days in San Diego. Today, we’ll talk about whether San Diego residents will vote on a city sales increase on the November ballot and a parcel tax for the school district, why the mayor vetoed a new city hall on the ballot, whether you want your county tax dollars spent on pro-life education and higher salaries for elected officials, and whether the growing immigration law battle between Arizona and the feds will spread into our region. The editors with me today are Scott Lewis, CEO of voiceofsandiego.org. What a day, Scott.

SCOTT LEWIS (CEO, voiceofsandiego.org): What a week. What a month.

PENNER: What a year. You see, I’m one better than you on the – Alisa Joyce Barba, western bureau chief for NPR News. Alisa, good to see you again.

ALISA JOYCE BARBA (Western Bureau Chief, NPR News): Nice to see you, Gloria.

PENNER: And JW August, managing editor for 10News. JW, can’t wait to hear your report.

JW AUGUST (Managing Editor, KGTV 10News): Ah, top o’ the morning to you, Gloria.

PENNER: Top of the morning. Our number is 1-888-895-5727, that’s 895-KPBS. Well, in less than an hour, the San Diego City Council will meet for an emergency meeting. What’s the emergency? The city’s suffering budget. Some might even diagnose the city’s financial woes as terminal. And, certainly, early in the week the council dashed all hopes for a recovery when it voted against placing a sales tax increase on the November ballot. And then last night, Mayor Sanders vetoed the council’s earlier action to put a new city hall in the hands of the voters. Scott, I’m breathless. First, give us a brief summary of what’s happened since the council voted down the ballot measure.

LEWIS: Well, they voted it down but at the very end of that meeting, Councilwoman Donna Frye and a couple of others there on the council had started to indicate what would need to happen in order for them to support a ballot measure to increase the sales tax, and a discussion erupted. And over in – behind closed doors and talking everywhere and – around city hall these last few days, she has literally become the mayor and tried to cobble together some sort of coalition that could handle her concerns, maybe bring over some conservative support, although I don’t know if it worked, and see if we can – if it couldn’t get put on the ballot. And that’s what this is – Look, I’ve been following San Diego city politics since 2004 and I have – And 2004, in fact, was an incredible summer, but I have never seen a summer like this in San Diego city politics. This is a week of scrambling unlike anything I’ve ever seen. They have scheduled an emergency fiscal meeting for today. I haven’t seen them do that. And the mayor’s nowhere to be found. You know, the natural sort of leader, they don’t even know if he’s going to show up to the city council today to issue his recommendation. It’s a very interesting – If I were to look from a national perspective and see that they had declared an emergency meeting and the mayor was nowhere to be found and everybody was scrambling to get something done in the next, just literally 24 hours, I would be very interested in what was happening to San Diego.

PENNER: Well, maybe he’s spending his time looking at those new city hall plans that are not going to be on the ballot, wouldn’t that – since he spent last night vetoing it.

LEWIS: Right, right, and that was, you know, another product. The boosters who want to build a new city hall had never wanted it to go to the ballot. They’ve always wanted the city council itself to approve it. There was concern that if they put a sales tax hike on the same ballot as a new city hall that people might, I don’t know, somehow conclude that they were one in the same, that they were paying for a new city hall when the city was going down the tubes. So the mayor vetoed, literally, his own proposal, which is just another example of just how wacky this month has been, this last – literally, I’ve never seen, again, a summer like this. This is just an extraordinary week. We should all be paying attention in the next hour to what the city council does. Do they put this on the ballot? Do they – Are they able…

PENNER: By this, you mean the sales tax.

LEWIS: Right.

PENNER: But…

LEWIS: Do they put a new sales tax on the ballot.

PENNER: …attached to reforms.

LEWIS: Right.

PENNER: We’ll talk about that in a minute.

LEWIS: Right.

PENNER: So I want to ask our listeners whether they agree with Scott. If you kind of just around the fringes, around the edges, and you’re looking at city hall, Scott says he’s never seen a time like this. What do you make of all of the back and forth and the lobbying and the scurrying and all of the drama that’s going on at city hall. Give us a call, 1-888-895-5727, 895-KPBS. JW, you’re sort of nodding vigorously there…

AUGUST: Twitching. I’m twitching, Gloria.

PENNER: You’re twitching vigorously, okay.

AUGUST: Well, I talked to these people involved in this this morning and apparently the lights were burning late last night at city hall and they arrived early, so there’ve been a lot of – nothing off premises. I was hoping they’d go into dark bars or something like that. But apparently it’s been done all at city hall and all the sides are meeting and there’s a lot of involvement, there’s a lot of last minute deals going on, looking at, which you’re going to go into, the list that Donna had proposed for reform measures and what kind of deal can be struck.

PENNER: Well, on These Days yesterday, Alisa, she sounded as though the business community and the labor community has to back the proposal, whatever the proposal is—I mean, there are a number of proposals—for it to get through the council. In other words, each has to say yeah, we’re going to help on this and we’re going to hold back on some issues and come forth on the others. How locked into these communities, labor and business, is the city council?

BARBA: Oh, yeah, I think it – it’s very much split. We have some who are on labor’s side, some who are on business’ side, and that’s why we’ve kind of been at a deadlock in terms of coming up with a solution to the city’s fiscal crisis. And I think the thing that – what we’re looking at right now, I mean, if anybody saw the Union-Tribune front page a couple of days ago where we’re staring into the abyss. I mean, we are looking at multi-million dollar city and school budget deficits for the years to come. I mean, projected way into the future, and I think that it looks as if our city leaders are finally, you know, their feet are to the fire and they’re thinking, you know, we just have to do something about this. We just can’t wait around.

PENNER: Feet to the fire, what finally brought their feet to the fire?

BARBA: I, you know – Scott, you have an answer to that? I don’t know what brought their feet…

LEWIS: Yeah, the election. The election in November, many are seeing as the last sort of window before another two years of, you know, city decay occurs. That they’re – If recovery for the city’s finances includes some sort of ballot proposal, many people are looking at November as the last chance to get that on. So even though they’ve had a decade, literally, almost to deal with what they knew was a freight train of problems, they have put it off until literally this week to try to fashion some sort of recovery. And so, you know, the scramble is on, and I think it’s an indication of just how desperate they are that they’re willing to call an emergency financial meeting, that they’re willing to…

PENNER: At ten o’clock this morning.

LEWIS: Yeah, that they’re willing to do all of these things to try to get something done, to try to get a tax increase combined with some sort of reforms done within a week. Now, there’s some that say, well, on the alternative you should just wait a year and put that out but you had the mayor him – his staff, on Tuesday or on Monday, come up and say, you know, if you don’t do this, we’re going to cut two hun – or, 700 police and we’re going to cut 20 fire stations. Now, maybe he’s…

PENNER: 25 fire stations.

LEWIS: Right. Maybe he’s not being truthful. And when they asked him, okay, what should we do, Mr. Chief Operating Officer for the mayor? He said, well, I don’t know if I have a recommendation on that.

PENNER: And that was Jay Goldstone.

LEWIS: Right, and so here we have the mayor saying, you know, if you don’t do something, the whole, you know, the city’s going to fall apart but it – but, you know, I don’t even have an option for what you should do. But that’s how serious they are taking this. And if the mayor’s not being truthful about how bad this is or if the scrambling is happening for some ancillary reason, the seriousness of what’s happening, I think, is captured by the fact that they’ve called this emergency session and stayed up all night trying to see if they can prepare it.

PENNER: Okay. Alisa.

BARBA: I mean, they can call this emergency session and the bottom line is, is if the two wrangling sides can come together and come up with a compromise that includes fiscal reforms as well as a parcel tax to put on the ballot, they still have to get it past the voters, which is the hugest hurdle in San Diego County to begin with. And so the only prayer they have is if they can get this gigantic coalition solidly behind it and then they begin the campaign.

PENNER: How well served are the people of San Diego if their council members are, in effect, mouthpieces for two warring communities and not independent thinkers? If you have councilmembers who represent business and you have councilmembers who represent labor and they’re not independent thinkers. Scott.

LEWIS: Well, I think that’s what was so impressive about Donna Frye’s stand this week, is that she said, look, this is – we are not going to have financial recovery unless we get both sides, and she literally said this, we put everyone in the room from the Chamber of Commerce to the people who support the sales tax and force them to come up with some sort of compromise. Now this is key. In 2004, which I said was a great year, for political drama, they tried to put an increase to the transient occupancy tax, the hotel room tax and it only needed 50%—his was the second one—and they weren’t able to get it because both the mayor and no conservatives supported it, and Donna knew that. Donna – That was Donna’s proposal. And that’s why she say this time if you have any hope of getting this done, you have got to have some conservative support. So anybody that says you should just put this on and it’s going to go and, you know, we have a chance of getting it done, she knows better than that.

BARBA: So…

LEWIS: And that’s why the emphasis was on putting some sort of measure that might grab a conservative.

PENNER: You know, I think we – it’s time to start listening to our audience and see what they have to say about all this because they really want to get in on this very vigorous conversation. We’ll start with Frank in San Diego. Frank, you’re on with the editors. Hello, Frank. Uh-oh. No Frank.

FRANK (Caller, San Diego): Can you hear me? Hello?

PENNER: Yep. Yep, I hear you.

FRANK: Okay. Hey, I just wanted to comment. I think it’s important that the citizens of San Diego get an opportunity to vote on this and I think the vote is simple. They either want more cuts to services or they don’t. You listened last week to the IBA made – had a report that said the unions have give up $125 million in concessions. Donna Frye has said they need $250 million a year just to fix everything and make this all work. In the end, the IBA also has identified $358 million that this city should be charging in fees and taxes that other cities are charging today. The city has no utility tax. There’s numerous things they’ve talked about for years, I believe, with raising revenue. I think certainly the unions have stepped up, made those concessions, and I think it’s time that there’s some revenue raised and the citizens get to weigh in on this, make a decision whether or not they want more cuts because certainly the city is at the crossroads. And I think that’s what people need to get a chance to vote on and weigh in on.

PENNER: Frank, do you think that the unions can make some more concessions?

FRANK: Well, I – I imagine they can – they can some more but, in the end, there’s really not much more for them to give back. I mean, I think $125 million in concessions is quite a bit and they continue to want more and while at the same time we’ve seen the city hasn’t made no effort at all from any elected officials or the mayor’s office to try to raise any kind of revenue.

PENNER: Okay.

LEWIS: But, Frank, aren’t you Frank from the firefighters’ union?

FRANK: Yes, I am.

LEWIS: Okay. I just wanted to make sure that was clear.

PENNER: Okay, well, so you definitely have a point of view and we appreciate it, Frank. And actually thanks for your call. JW, there is something else that the unions can do. A good part of this fight has to do with the mounting costs of pensions and controlling them.

AUGUST: Right.

PENNER: So, and these pensions are sort of guaranteed by the Municipal Employees Union.

AUGUST: And there’s nothing they can do with what’s current but they certainly can do things about what’s coming online or new employees being hired. That’s a possibility. The problem here is we have a city council that many members have never ever heard or used the word compromise, which is what made our country what it is. They have to learn how to compromise. It’s a rather simple word but it means a little give and take and instead of digging in on the business side or the labor side, they have to realize is – Donna – I talked to Ms. Frye last night. She says you can’t deny the facts, you can’t deny the reality, it’s going to get worse. She described it to me as like Butch Cassidy and Sundance Kid on that cliff getting ready to jump and the posse’s chasing them but that posse is the city disaster facing us and Butch is reform and the other guy is revenue. And revenue wants reform to jump off first and reform wants revenue to jump off the cliff first.

PENNER: And you’re banging the microphone.

AUGUST: Oh, and I’m banging the microphone. I’m waving my hands. Neither one wants to jump first and Donna says they got to grab each other’s hands and go off the cliff together.

PENNER: Well, have you ever heard a better picture painted than the one that JW August of 10News…

AUGUST: No, give Donna Frye – that’s Donna’s.

PENNER: That’s right. Okay. Well, we’re going to be back in just a moment to continue this very lively conversation. Again, in about 35 minutes, the emergency session of the San Diego City Council will be in force and we’re sort of leading up to that with a lot of talk about the city and we’ll get to your calls as well. Our number is 1-888-895-5727. I’m Gloria Penner.

PENNER: I’m Gloria Penner. This is the Editors Roundtable on this propitious morning when the San Diego City Council is meeting in emergency session starting in about 36 minutes to try to figure out what they’re going to do about the deficit, the structural deficit, and we are sort of leading up to that for the next few minutes and taking your calls as well. What is going on in this city? Our panel, our wonderful panel this morning, JW August of 10News, Scott Lewis from voiceofsandiego.org, and Alisa Joyce Barba from NPR Radio. You know, before I take the calls, I just want to add one thing. Donna Frye, who seems to be key here, made – amazing. She sort of emerged from a rather quiescence stage and she’s sort of leading the charge here and, of course, she is termed out at the end of this year so there’s no political reason for her to be doing this. She said her plan isn’t perfect but it was pulled together quickly. Well, what I want to know is, after all these years of this structural deficit, why wasn’t a long range, well thought out plan to combine reforms and taxes on the table in the first place? Scott.

LEWIS: Well, you know, that’s a great question. I mean, Donna Frye actually ran on a plan largely similar to this. A sales tax increase…

PENNER: You mean for mayor.

LEWIS: Yeah, in 2005. Sorry.

PENNER: All right.

LEWIS: A sales tax increase combined with reforms and benchmarks and, you know, a threat of going into bankruptcy if they aren’t achieved. You know, for years and years and years, the city and its mayor have known that the city is not set up to take in as much money as it’s set up to spend. And to watch them scramble right now is insulting to all of us who, for years, have tried to convince them to take this seriously. And now we have a situation where some drastic cuts to the city’s budget are projected unless they’re not being truthful with us, and yet they’re acting as though, you know, this is the only chance they have to cobble something together. Now I – And so we have to decide as a citizenry, well, do we support the effort to cobble it together or there is a train of thought that says, you know, let it go down the tubes, let them finally have to be tagged with the consequences of their actions over these last – or their inaction over the last few years and then we can try to recover. The problem is, is that our quality of life suffers and I think that residents should all demand that anybody who wants the city to just continue to deteriorate in order for them to achieve their political goals is not a helpful person on behalf of the City of San Diego.

PENNER: Probably the one incident that occurred within the last few days that sort of points up the deterioration was when the fire department that should have served a two-year-old boy who was choking was delayed because they were on the brownout to save money. I mean, to me, that was such a clear indication that when you talk about a city falling apart so maybe it starts with a two-year-old kid.

LEWIS: Right, and I think that’s why – that was a, you know, an illustration, a symbol of a bigger problem and I think that a lot of people, and me included, are worried about the consequences of inaction going forward. Now, you know, talking about it with somebody like Councilman Kevin Faulconer and they say, well, the city has to prioritize and maybe we need to cut some of the departments that we have and protect fire, you know, maybe we need to just simply live within our means and just let everything like the print shop, parks, I don’t know what else you can cut that can somehow preserve public safety, or art – the arts program, who knows, but it’s that kind of drastic cuts, and Donna Frye is saying, you know, that’s not acceptable right now. And…

PENNER: Well – well, let’s see what our listeners think, and because we are starting to run out of time, I’m going to ask our callers to make their comments to the point and brief. And thank you very much for calling in. We’ll start – By the way, those who don’t get on, please go to KPBS.org/editors and register your comment because we read them all and everybody else does, too. That’s KPBS.org/editors. All right, Daniel in Clairemont, you’re up first. Go ahead, Daniel.

DANIEL (Caller, Clairemont): Yes, well, just the recent e-mail I sent to Jerry Sanders, the reply was out of my office or ‘out of office.’ I mean, for me, that’s the main wish that I wish, you know, that he really was out of office. I’m really sorry that what is happening (sic). I’ll tell you, I’m the only person who sued the city council on the pension issue prior to it becoming a problem because I saw it was going to be a problem and I didn’t want them to grandfather themselves in and let themselves get to be vested within 10 years higher than the public safety people that are in our city working. You know, I ran for city council, I used to speak before city council a lot trying to help them out. Sometimes I’ll go down there and try some more but they’re really not doing much…

PENNER: Okay.

DANIEL: …and they really need to do something. They need to change their act or else we need to get them all out.

PENNER: Okay, Daniel. Thank you very much. And let’s hear now from Greg in San Diego. Greg, you’re on with the editors.

GREG (Caller, San Diego): Thank you very much. Yeah, I’m going to echo, to a degree, the previous caller’s words and give a thought that I think it is time for the council to face the music and let this thing fall apart. I, personally, believe that we should’ve bankrupted the city years ago when we could forecast that we were going to get to this point. And what have we done? We’ve done nothing. And now they want to put a band aid on it. It won’t make it work. Let’s get a city attorney that can figure out a way to do this instead of spending time figuring how to make us – give us an opportunity to pay for trash pickup. He can amend the charter or maneuver with the charter so that we can be made to pay for trash pickup.

PENNER: Okay. Thank you very much, Greg. Of course, it’ll take longer to put in a new city council and a new mayor and a new city attorney than it would to kind of try to take some really vigorous dramatic steps forward. We’ll take one more call and then we’ll have final comments from our – Oh, and the school parcel tax, got to – got to talk about that quickly. Mel, will you please be brief and thanks for calling in.

MEL (Caller, San Diego): Oh, yes. I think the council should be considering raising the property transfer tax rather than the sales tax. Now I don’t know if any of your editors or reporters understand what the property transfer tax is but it’s a tax on the sale of real estate.

PENNER: Okay, well, thank you very much for your suggestion. All right, you got some suggestions. We have lots more out there. We’re not going to get to them. I want final comments but wrapped into your final comments there is this other issue which we really can’t let go without at least mentioning it. It parallels the drama over the sales tax measure. It’s the on-again, off-again, on-again comedy of the school parcel tax, headed for the same November ballot. Reports are that the mayor, Ben Hueso, the council president, and Todd Gloria, a member of the council, asked school board president Richard Barrera not to put the school tax on the ballot with the city tax. So why isn’t the mayor up front about supporting the sales tax? Scott.

LEWIS: I have no idea where the mayor is or why he’s doing what he’s doing, which is not publicly at all trying to inspire or lead people to something. But, yeah, there was an effort to persuade if not, you know, strong arm or how ever you want to describe it, Richard Barrera from the school district to pull that parcel tax off. After he did that, he reexamined that and decided that his principles were that he had to – that this – if he really did think that was the solution that they had to put something up. But in order for him to pass that, he is going to have to get some conservative support, too, and that’s going to be a big challenge. Look, the proposal on the table is to increase the sales tax but only allow it to continue if certain benchmarks are made including to outsource the landfill, to make the employees pay their fair share of the pension costs. All of these things are going to be very interesting to watch and I don’t know if they will peel off conservative support or the mayoral support but unless they do, it’ll struggle to pass.

PENNER: Well, it’ll be fascinating. Your final comments, please, JW, on this one.

AUGUST: Well, I’m not one of Jerry’s kids, never have been, but I have to say we’re not giving any credit to the mayor here and I do think that he’s doing what he does best and that’s work behind the scenes, talking to the business community, pushing them along to the table, and working the room. So before we write the mayor off on this and his effort let’s see how this whole thing plays out. And I hope everybody kind of grows up in the next day, in the next few hours, and understands what it takes to make things happen in this city.

PENNER: Well, there’s a second meeting going to take place on Monday, so they also have the weekend to sort of contemplate their futures and the futures of the city.

AUGUST: Well, I invited them all over for a beer at my place. If they want to come, we can talk about it.

PENNER: Last word, Alisa.

BARBA: You know, I think, bottom line, we’ve been talking about this for so long, I, you know, it’s the oldest conversation in San Diego. But bottom line is, you know, maybe it’s finally come home for the city council, for our politicians. It’s going to have to come home for the people of San Diego before they’re ready to vote for a new tax, before they see these reforms. I mean, they’re going to have to feel it even more than they feel it now.

PENNER: Well, you’re right. A lot of people have no idea and it’s not because they’re not alive, it’s because they live in enclaves where it hasn’t touched them yet. Okay, at this point, we are going to move on. And thanks, everybody, for your calls. Sorry we didn’t get to all of them.

Comments

Avatar for user 'brianjester'

brianjester | July 30, 2010 at 9:39 a.m. ― 5 years, 1 month ago

Why do some city council decisions required to go to a ballot vote? Can't the council make decisions without asking 2 million other people for their opinion?

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Avatar for user 'Heidi123'

Heidi123 | July 30, 2010 at 9:47 a.m. ― 5 years, 1 month ago

We had a sales tax increase 2 years ago of 1 cents to 8.75 per dollar. It can be more in different municipalities. That increase didn't produce the revenue anticipated because raising taxes does NOT create incentives for consumers to purchase. Raising taxes is a disincentive to produce. This sales tax increase is a band-aid approach to a chronic problem that will not go away until the council makes some very tough decisions to reform the budget. This will not be easy, with all the union pressure to hold the status quo with pensions, healthcare benefits and salaries. California needs to reassess their pension actuaries because people are living longer and need more healthcare as well as being responsible for losses in investments. The budget is unsustainable in its current form.

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Avatar for user 'SteveW'

SteveW | July 30, 2010 at 10:17 a.m. ― 5 years, 1 month ago

I am in a Union. I am pro union. I have seen the good that unions do for not just their members, but also for the good of the community. Not all unions are bad. Having said that, I do not understand how a municipality is allowed to fund or pass unsustainable wages and pensions. And then not be able to reverse them when they are not sustainable?? I don't understand. Why can't we say, sorry we can't afford to pay your 6 or 7 figure pension for the rest of your life, reduce it to a modest reasonable amount, and then if in the future when we're rolling in dough increase it resonably? We need to get a handle on this issue now.

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Avatar for user 'SteveW'

SteveW | July 30, 2010 at 10:26 a.m. ― 5 years, 1 month ago

One other thing related to this --Prop 13. Some people point to this as the reason we're having this crisis. I strongly disagree. Prop 13 passed 30+yrs ago. Prop values have increased, new homes have been sold, more people have moved in, --more revenue generated. The problem has occurred because the $ have not been managed properly in that time period, plain and simple. Sure people would like to do away with that so they can have even more $ to waste. Maybe tax payers should be allowed to vote on wage raises, pensions, etc. for public employees including the Mayor and City Counsel.

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