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( MGLAND )

Comments made by MGLAND

SD Voters Will Decide On Sales Tax Increase

So far this appears to be a heads you win tails I lose proposition for the taxpayer.
Here is why.

The general fund is being decimated by the annual pension payments. According to the pension system's most recent estimates, the city's pension payment went from $154 million last year to $229 million this year, and it's projected to reach $340 million by 2016 and $508 million by 2025.
"Because pension costs continue to rise faster than revenue, the city ends up cutting its budget each year in order to pay its pension bill.".......aka....Its a Death Spiral
That is what the tax for. It won't be temporary.
If this city council, and the mayor were serious about this they would immediately rescind the prevailing wage ordinance on city contracts. That would cut the cost by up to a third.
Whats not in the "reform" proposal is the elimination of the "defined benefit" model of pensions which puts the taxpayer in the position of having to make up any pensions losses.
Of this years pension payment that is $80 million.
These "reforms" appear to make progress but they do not address the root problem of the defined benefit pension model. The city needs to change (like yesterday!) to a 401K style pension system and public employees take responsibility for their own investments

August 5, 2010 at 8:51 a.m. ( | suggest removal )

Proposal To Increase San Diego Sales Tax

No real reform but a purpose. On 7/27 Union tribune story pointed out...
7/27/10. If leaders do nothing, the city is expected to have budget deficits of $72 million, $68 million, $70 million and $48 million in coming years. Even if the economy recovers, the picture doesn’t get any rosier as the city’s annual pension payment — which is paid for out of the city’s $1.1 billion operating budget — is expected to balloon from $232 million this year to $318 million in 2015 to $512 million by 2025.
.....It was 160 million last year.
Bottom line.....City pension obligations are a death spiral with no bottom for taxpayer liabilities...our kids will be paying an increasing percentage of their taxes to just service this debt and receive very little in public services. They will exist to pay pensions.

The purpose of this Tax is to generate enough cash flow to service this death spiral.
It should get rejected until the City gets serious about the root problem and rejecting the measure will force them to get serious

July 31, 2010 at 8:53 a.m. ( | suggest removal )