Prop. D Debate, Join The Live Chat

We'll hear an overview of Proposition D, the ballot measure that would open the door to a half-cent sales tax increase if a list of fiscal reforms are met. Find out what a local economist says about the city's current tax structure and projections on how the tax increase would affect the current budget deficit. Finally, San Diego City Councilmembers Donna Frye and Carl DeMaio will debate the measure. You can join the discussion by participating in a live chat.

KPBS ELECTION COVERAGE

Guests

KPBS Metro Reporter Katie Orr

Alan Gin, Ph.D., is professor of economics at the University of San Diego, and author of USD's Index of Leading Economic Indicators

San Diego City Councilwoman Donna Frye represents District 6.

San Diego City Councilman Carl DeMaio represents District 5.

Read Transcript

MAUREEN CAVANAUGH: The big issue on the San Diego City ballot is whether voters will agree to increase the sales tax. I'm Maureen Cavanaugh, coming up on These Days, many city leaders say we face deep cuts to public safety services if voters don't approve Proposition D. But those opposed say the city has other ways to find money instead of a half cent sales tax increase. During this hour, we'll hear an over view of the proposition, and two San Diego City counsel members will debate Prop D, and you can join our live chat on the topic. That's all ahead on These Days, first the news.

I'm Maureen Cavanaugh, and you're listening to These Days on KPBS. Supporters of Proposition D are using these last few days before the election to make their case to San Diego voters. They say voting for the half cent sales tax hike will preserve police and fire protection in the city of San Diego. And they are warning of deep cuts if the proposition is voted down. Opponents of Prop D are calling such claims scare tactics. They say an economic downturn is the worst time to raise taxes, and the city could find a lot more money by trimming its employee pension obligations, this hour, we'll be discussing why Prop D is on the San Diego ballot, how it got there and what it's asking and promising San Diego voters. We'll also examine how the sales tax might impact the city's economy, and we'll hear from two prominent voices in the Prop D debate. San Diego City counsel members Donna Frye and Carl DeMaio will join us in the hour. We won't be taking any phone calls this segment, but if you want to participate in a live chat on Prop D, go to the These Days page on KPBS.org, click on this segment to participate in the on line discussion.

Now I'd like to welcome KPBS metro reporter Katie Orr to give us some back ground on Prop D.

KATIE ORR: Good morning Maureen.

MAUREEN CAVANAUGH: Everyone refers to Prop D as the balance measure that's going to increase the city's sales tax. But it's not quite that straightforward. Can you give us an over view?

KATIE ORR: It would increase the city's sales tax to 9.25 percent for five years. But as you said, it's not that simple. The ballot measure also contains ten financial reforms that the city must make before the tax can be collected, and the city auditor would be the one to sign off on those reforms and certify that the tax can indeed be collected. If approved it would generate over 100-million dollars a year for the city. And while this would increase the city's sales tax by half a cent, this spring, the state sales tax is actually dropping by $0.01. So the net effect would be San Diego even with this increase would see a one half cent net decrease in its sales tax. Of.

MAUREEN CAVANAUGH: Why do supporters say we need to raise this tax for the city of San Diego.

KATIE ORR: Everyone knows the city has been facing multibillion dollar budget deficits. That's because our pension costs keep going up. In the coming years, the organization that manages the pension fund projects the city could be facing a half a billion dollar annual pension payment. That's half of the city's budget. San Diego has a structural budget deficit, meaning it continually spends more money than it takes in. And it just needs to find more ways to get more revenue. Supporters of the tax say listen, give us this money, it'll act as sort of a bridge loon, so we can make some substantial reforms to get back on the right financial path.

MAUREEN CAVANAUGH: People have been saying that about San Diego for a number of years now, that it spends more than it takes in, there is this structural deficit. How did Prop D finally make it? How did it finally get on the ballot? What's the background for this proposition.

KATIE ORR: Well, the sales tax initiate itch in itself, just the sales tax didn't have a lot of support. But it was this idea for combining a sales tax with these reforms that the city must make that won over the Republican mayor, won over the San Diego Chamber of Commerce, and several other business groups. Supporters say it's that kind of coalition and that kind of -- that really means that this is a I solid ballot measure. Of course, opponents say you can put all of these reforms on there that you want, but they say they don't mean anything. They don't guarantee any specific savings. And basically they are just a window dressing to convince people that they're trying to do reforms but that doesn't guarantee that anything will actually change in the city.

MAUREEN CAVANAUGH: You say that there are ten reforms that need to be met. Can you give us an idea of some of the things that the city has to do before this sales tax can kick in.

KATIE ORR: Yeah, it includes things like modifying the pension system to offer different kinds of plans. They'd have a two-tier system. They're going to do something called eliminating off sets, they've already done that for elected officials. That means the city picks up some of what the employee contribution should be. So if I'm supposed to contribute ten percent of my salary to a pension, maybe the city picks up five of that. And so I'm only contributing five percent. They're eliminating that. And they've already done that for the elected officials. They're also looking into outsourcing Mira Mar landfill, which they've already done. They've eliminated the practice of term 23458 leave, meaning when somebody left the city, instead of just giving them a lump sum payment, they would continue to pay them until their vacation leave ran out, but in the meantime, they would keep accruing leave and benefits as if they were working. And they also have to reduce the retiree healthcare liability, which is a big deal for the city. It's about a $2 billion liability right now. This is one of the things critics have a big problem with right now. They don't say by how much they have to reduce it. They could say a dollar. And technically, it's been reduced. And that's again an example of why critics think these are vague reforms.

MAUREEN CAVANAUGH: Are there any actual dollar targets before the sales tax can be implemented.

KATIE ORR: There are not any dollar targets in the ballot measure associated with these reforms.

MAUREEN CAVANAUGH: We're gonna hear a debate in the program later between Carl DeMaio who opposes the measure, Donna Frye who supports it. Can you give us a sense of the other groups who have come out in support of or opposed to prop T.

KATIE ORR: It's what you would expect. Public safety groups have come out in favor of the tax, because they don't want to see their services cut anymore. And in fact, fire firsts and police, the fire first and police union bes are big contributors to the yes on Prop D combine. And on the other hand, you have the San Diego County taxpayers' association, who's come out against the tax, because it's a tax increase. And on the no on Prop D side, you have the Lincoln club of San Diego County, and the San Diego restaurant and beverage political action committee given money to the no on Prop D side. Along those lines, it might be predictable. Butch it is interesting in that you have a Republican mayor stumping for a tax increase. And what's really interesting is that he is doing it alongside counsel woman Donna Frye. A Democrat. Jerry Sanders ran against Donna Frye for the mayor's office in 2005, and dona Frye campaigned on a similar reform to this. Tax reforms and tax increase and financial reforms and she lost the election over it. And fast forward five years, and mayor Jerry Sanders is out there filming yes on Prop D campaign ads with her. So it's interesting political dynamics that are going on here.

MAUREEN CAVANAUGH: Speaking of that, and those ads I've seen TV ads and political signage about Prop D. How much have they been raising.

KATIE ORR: The yes on Prop D side has raised about $450,000. The no on D side has raised about $308,000. So not a huge difference, you know, we're in the talking millions of dollars here. And you are just right now in the sort of last week to the election starting to see these yes and no ads, you know, pop up on TV, and there are signs everywhere, and there's a big no on D truck that's driving around the city.

MAUREEN CAVANAUGH: Now, the mayor's office has hosted a series of town hall meetings in the past few weeks, and in these town hall meetings, they've outlined cuts to city services that might take place should Prop D fail.

KATIE ORR: These are just budget town hall meetings he holds every year. But you have the fire chief, are the police chief, the head of the public libraries, the head of the public works department, all standing up and letting people know what the possible billion cuts they'll have to make might be if the sales tax doesn't pass and San Diego has to cut $73 million from its budget. That's the projected budget deficit next year. An increase in the fire department brown outs, fewer police officers, drastic cutbacks to the parks department and the library departments. The closure of swimming pools around San Diego. And you know, don't even think about having a pot hole on your street fixed, at least not for a while. That is the message these department heads are giving to people.

MAUREEN CAVANAUGH: And both the typing and the content of these town hall billion meetings have been criticized by opponents of prop K.

KATIE ORR: Right. These critics say, you know, didn't have have these meetings in the two weeks before the election. You could have just have easily started them on November 3rd or fourth, after you knew whether or not Proposition D had passed. And critics like Carl DeMaio say these are thinly veil would pro Prop D rallies. Up know, you don't really have budget talks in October a lot of the time.

MAUREEN CAVANAUGH: Center anyone aspect of Prop D that the public seems to be focusing on? Is it that sales tack increase.

KATIE ORR: Yeah, it's the sales tax increase. That's where you're gonna affected. When you go and buy something. People point out it's a half a cent on a dollar. So if I go to target and buy something, you know, I might not necessarily think about that or feel that very much. But it's this whole argument that sales tax is a regressive tax, although there's some dispute about that too. And that the poor in San Diego will feel it the most. Although proponents of the tax say, these are the people that are also gonna feel the service cuts the most. When you close a library or when you close a rec center, not everyone can afford to any to barns and noble and buy a book or go to the gym, ache private gym and work out. They depend on these city services. So public safety is really -- and these services are what the proponents are pushing. But at the meetings I've been to, and I moderated a debate on this issue earlier in the year, it's the pension. People are so angry that the city's pension payment is so much and that it keeps going up. And just from my observation, it seems like people don't see it as their problem. Why should the taxpayers have to clean up the mess for something that the city did years ago? And mayor Sanders acknowledges that. He says I'm angry about what happened too, but this is where we are and this is how we have to get over it. I don't know if that's a message that's gonna resonate with the voters. They don't see it as something they did, so why do they have to fix it?

MAUREEN CAVANAUGH: And finally, Katie, is there any indication of how voters are thinking about this? Do we have any pole numbers?

KATIE ORR: Well, the San Diego Union Tribune did a pole earlier in this week and it showed that it split about 40 percent, for 40 percent against, and the rest are undecided right now. Which I think is probably a lot closer than a lot of people thought it would be. I think in San Diego people just assume a tax increase is gonna get blown out of the water. So it might be a little bit closer. But it was also interesting, the UT found that people were more likely to vote for the sales tax accident the less they knew about it. That's an interesting aspect.

MAUREEN CAVANAUGH: That's all interesting. Thank you so much Katie for all that information.

KATIE ORR: Thank you.

MAUREEN CAVANAUGH: I've been speaking with KPBS metro reporter Katie Orr. We won't be taking request phone calls during this segment as we continue our discussion about Proposition D. But if you want to participate, I'm gonna remind you that there is a live chat about Prop D going on right now, on the These Days page on KPBS.org. You can click on this segment to participate in the on line discussion.

[[[NEW SEGMENT]]].

We continue our discussion about the half cent sales tax increase proposal on the San Diego City ballot, Proposition D. Out of the political debate, there are some people who oppose or support Prop D. Purely on economic grounds. For some insight into how a bump in San Diego's sales tax may affect our city's economy, I'd like to welcome my guest, Alan Gin, he is professor of economics at the yesterday of San Diego. And author of USD's index of including economic varieties. Alan welcome to These Days.

ALAN GIN: Thank you.

MAUREEN CAVANAUGH: How would you describe San Diego's current tax structure? I've heard it described as low tax, high service.

ALAN GIN: I think you just hit it there. San Diego is among the lowest in terms of the amount of general fund revenue per -- as a percentage of income of any city in the state of California. So we have a situation where our taxes are low, there are some fees that we don't charge that other cities charge. And yet at the same time citizens demand a high level of service. That's a desirable situation if you can get it, but right now, it's causing a lot of strain in terms of the city's finances.

MAUREEN CAVANAUGH: And that, I guess, comprises the structural deficit that we've heard so much about.

ALAN GIN: Uh-huh.

MAUREEN CAVANAUGH: So what is the economic philosophy behind increasing a city's sales tax.

ALAN GIN: I think in this instance the philosophy simply is that you have the structural budget deficit estimated to be about $73 million for the next fiscal year, and right now, you're just looking for more sources of money to chose that gap because you don't want to cut back on the level of services that are provided.

MAUREEN CAVANAUGH: Is this the best way for a city to raise a large amount of money.

ALAN GIN: I think it's not necessarily the best way, but given the constraints that it -- being operated under at this particular point, it may be the only option in the sense that it could be done quickly. One of the problems that San Diego has is that our tax base is not very diversified. We depend on very few sources of revenue in terms of providing revenue to local government. Things like the sales tax, the property tax, the transinoccupancy tax, the problem with those is that they are heavily dependent on the economic cycle. So when we're in a downturn here, that causes a big drop in had terms of revenue. Eventually, what would be desirable is if the city had a broader base as far as its tax revenue is concerned and therefore is not dependent, it's not as affected by the business cycle.

MAUREEN CAVANAUGH: I see. Now, I've heard a sales tax in particular being called a regressive kind of tax. What does that mean.

ALAN GIN: A regressive tax is a tax that hits low income people harder than high income people. And there are occurrence about a sales tax, because it's not based on income of it's based on the amount that you spend. One thing that helps the situation somewhat is the fact that a lot of necessities are excluded from the tax. For example, groceries, medical care, housing, not affected by the sales tax. So that comprises a lot of people's expenditures. If you do that, it makes the tax a little bit les regressive.

MAUREEN CAVANAUGH: I'm speaking with Alan Gin, he's professor of economics at the university of San Diego, and the author of USD's index of leading economic indicators. You're talking about some of the economic factors that surround Proposition D. Which is the proposal to increase San Diego's sales tax by one half cent. So how does our sales tax here in San Diego compare to other sales taxes in other cities in California.

ALAN GIN: If you compare the sales tax here in San Diego, it's among the lowest among all the cities in the State of California. And also within San Diego County. There are many cities within San Diego County that have already raised their sales tax beyond 8.75 percent. So even if we added a half cent to the sales tax, we'd still be in a pretty competitive situation compared to other cities around the state.

MAUREEN CAVANAUGH: Now, what would increasing the sales tax do to actual sales in the city of San Diego? Do we know anything about that?

ALAN GIN: That's the worry. The worry is that if you increase the sales tax, that means that when people spend money, they have to ship in a little bit, an extra half cent for every dollar that they spend, and the worry is that particularly in these tough times, people with limited incomes then would have less money to spend. And they might respond then by buying fewer things.

MAUREEN CAVANAUGH: So also might they not respond by going elsewhere where that -- the sales tax is much lower? Especially here in San Diego just across the border in Tijuana? Would that be a draw away from businesses in San Diego do you think?

ALAN GIN: That's a potential draw, but it would only apply, I think in cases where people are spending a lot of money. If somebody spent a hundred dollars, say, the half percent increase would amount to $0.50. So somebody would have to spend a lot of money to justify taking the time to travel to some place with a lower sales tax.

MAUREEN CAVANAUGH: So do you think then that for the average consumer we may not even notice this half cent sales tax increase in our budgeting and so forth unless we buy a high ticket item.

ALAN GIN: I think that that's possibly the case. What you have here then is a situation where it's almost -- it's almost imperceptible. It could be difficult for people who are on fixed income, who are on low income. And so that's something to worry about. But I think for most consumers, you normally don't think about the impact of the sales tax. And I have some questions then about how much that would affect people's decisions.

MAUREEN CAVANAUGH: How much do you think it would affect their decisions.

ALAN GIN: I think for most items, most spending items, I don't think it'll have much of an impact at all. For big ticket items maybe like auto purchases, things like that, it may have some marginal impact.

MAUREEN CAVANAUGH: There are some retailers and small business owners here in San Diego who are opposed to Proposition D specifically because they say that people won't buy as much or they won't buy here in the city of San Diego if we raise the sales tax to 90.25 percent. Are their concerns valid do you think?

ALAN GIN: I think it's a possibility. I think for most transactions it will not factor in. But again, if you look at some bigger ticket items, the half cent might be significant. But I think for your everyday purchases, it'll be an inconvenience, but I think people will generally go about their business. Of.

MAUREEN CAVANAUGH: Well, to the larger issue of how much the revenue from this increased sales tax might actually help San Diego close its budget gap, do we have any projections on how they might -- how that extra money might actually help the city.

ALAN GIN: It's been estimated that the sales tax increase would generate an extra hundred million dollars for the city.

MAUREEN CAVANAUGH: Is that a hundred million dollars each year.

ALAN GIN: It would be a hand million dollars each other.

MAUREEN CAVANAUGH: I see. And so when people are discussing this half cent sales tax, do you think -- have you heard people get this right in their discussions about it? Or are there some misconceptions that you keep hearing.

ALAN GIN: I think the -- the problem that in my mind that comes up is that people are worried that this'll have a dampening impact on the economy. And it could, you know, you're taking a hundred million dollars out of the economy. That could be problematic, particularly with things in a downturn like we are. But the problem is that when -- the problem is the city is required to have a balanced budget. It can't run a budget deficit like the federal government. So any way that you close that gap, whether it's increasing taxes or slashing spending and services and jobs is gonna have a dampening impact then on the local economy.

MAUREEN CAVANAUGH: What as an economist, what is your feeling generally on raising a sales tax in the depths of a recession? I know that some say we're out of the recession, but we're still feeling the impact of the recession. Many people say we shouldn't be raising any kind of tax right now. Of.

ALAN GIN: It's not a good situation to be in. But again, the balanced budget requirement of city governments leads to a situation where during a recession, things -- things get worse. The balanced budget requirement makes things worse during a recession. Again, you either have to increase taxes and fees to cover that or you have to cut back in terms of your services and jobs or a combination of the two, and either one then would make a bad situation even worse. But again, that's the law.

MAUREEN CAVANAUGH: Okay. Well -- yes?

ALAN GIN: One thing that helps though is that the state imposed a $0.01 increase in the sales tax earlier. And that is actually due to expire in July of next year. So that is gonna come down if this thing, you know, if this thing passes, then the net effect will actually be that the sales tax will be actually a half a cent lower than it is currently.

MAUREEN CAVANAUGH: Now I'm not gonna ask you to make any predictions at all because you are not here, but you have observed San Diego's economy for quite some time. Do you think that a half cent sales tax increase would have any measurable effect on sales and people's basic bottom line when they're doing their budgets?

ALAN GIN: I think for the vast majority of people that it will not have an impact. And even if you look at the economy over all, we're talking about a hundred million dollars a year, yes, that's a big number. But if you look at it in terms of the gross regional product of San Diego, that's less than a tenth of a percent that we're talking about in terms of the economic impact.

MAUREEN CAVANAUGH: Well, thank you for telling us about the economic impact of Proposition D. Thanks so much, Alan Gin.

ALAN GIN: Thank you.

MAUREEN CAVANAUGH: Our discussion about Proposition D continues in a few minutes with a debate between San Diego City counsel members Donna Frye and Carl DeMaio.

[[[NEW SEGMENT]]].

MAUREEN CAVANAUGH: I'm Maureen Cavanaugh and you're listening to These Days on KPBS. Our discussion on the city of San Diego's Proposition D, the proposed half cent sales tax increase continues. . And I'd like to welcome two of the strongest voices for and against that proposition. San Diego City counsel members Donna Frye, who represents district six, and Carl DeMaio who represents District five. And I want to thank you both for joining us this morning.

DONNA FRYE: Good morning.

CARL DEMAIO: It's our pleasure.

MAUREEN CAVANAUGH: Let me, if I may, give you both a minute. To state why you support or oppose this measure. Donna fry, why do you support Proposition D.

DONNA FRYE: Well, Proposition D is a balanced approach to solving the city's structural budget deficit. It includes reforms and revenues, we are now facing a $72 million deficit. This measure will make sure that budget deficit can be made up, again, not only with reforms but also with some revenue. One of the things that I think people don't know is that a state sales tax will go down by about $0.01 on July 1st, meaning that your sales tax will be lower even if Prop D passes. And then that half cent sales tax stays in the city's general fund instead of going to Sacramento. Of plus we have support from business, labor, Republicans, Democrats, we have a working coalition of people who are committed to change and solving the city's problems once and for all.

MAUREEN CAVANAUGH: Thank you, Donna Frye. And Carl DeMaio, why do you propose Prop D.

CARL DEMAIO: Well, because it doesn't solve the city's financial problems, what it does is give money to city politicians, a half a billion dollars, and that pushes back the necessary reforms we need to make. It's like giving alcohol to the alcoholic. Nothing in mayor Sanders' or Donna Frye's plan with Proposition D reduces or restructures our long-term pension liability. When you take the cost of pension and retirement benefits this year in the city's budget, it's over $370 million or 2 thirds of the entire city's payroll. When you compare that to small businesses or nonprofit organizations, they have maybe 12 to 15 percent of their percentage in payroll consumed by their retirement costs. So we are throwing good money after bad if Prop D passes.

MAUREEN CAVANAUGH: So Carl DeMaio, what is in your estimation, a better solution to the city's billion deficit?

CARL DEMAIO: Well, one of the simple things that the voters have already asked for. Proposition C in 2006 requires competitive bidding on all city services, but the labor unions have blocked that. We could be saving tens of billions of dollars annually if we implemented competitive bidding. Legally documented pension reforms, the city attorney has documented and validated these pension reforms in progress in court on providing us vehicles for reforming pensions. And I've hired an actuary who has hooked at all the numbers and we've put together a long range pension reform plan that can be implemented in 2012, and it will immediately start paying dividends with cost savings, but the biggest benefit will be the restructuring of our long-term debt, our long-term obligations. Nothing in Prop D accomplishes in a comprehensive way, a restructuring of our pension liability. And Maureen, if we don't reform the pension system, putting money in up front is throwing good money after bad.

MAUREEN CAVANAUGH: Donna Frye, I'd like to get your response to that. Do you think that these proposals are realistic in terms of where we are in the deficit -- in the economic climate of San Diego.

DONNA FRYE: Absolutely. And there's very strong reforms, including adopting the ordinance for a voluntary defined contribution pension plan, and reducing the retiree health costs. We have a commitment by all the people involved to work together to solve this problem. And unfortunately my opposition's entire strategy is to try and get you angry about things that happened in the past. And I'm with the mayor and the business community and labor, Republicans, Democrats. We actually have a plan to solve the problems once and for all. And unfortunately the pension benefits, many of the issues that Mr. DeMaio raises related to pension, he knows as well as I do that many of these cannot be rolled back under the state constitution. And that he also knows that voting no on Prop D won't reduce a retired librarian's pension by one dime. But that's what he's trying to get people riled up about. Things that have happened in the past. That this mayor and this council have corrected. So those things cannot happen again.

MAUREEN CAVANAUGH: Carl DeMaio, if you'd like to respond.

CARL DEMAIO: Sure, first of all, a broad based coalition has been formed to oppose Proposition D. The taxpayers' association which does not universally oppose all taxes they put forward a that you feel proposal of a dollar for dollar cost saving match. The city council members did not want to be held accountable for a cost saving target. They did not want to be held accountable for iron clad reforms so they turned them down. We've also had small business organizations, representing your mom and pop groups in San Diego County, we have the largest coalition, they've got labor and they've got lobbyists. Well, that's great, those are the folks that helped get the city into the financial problem in the first place. And as to the issue of pension reform, yes, voting down Proposition D will advance pension reform. Because if you give city politicians and labor unions an additional half a billion dollars in increased taxes, they will have enough money to skate by for a little while longer and more and more people will get those benefits that we're all angry about. Donna is correct, you cannot go back to retirees and take anything away from them. But for existing employees, we must continue to enact reforms.

MAUREEN CAVANAUGH: Donna fry, why weren't hard numbers put into the reform targets for Proposition D? Opponents say the reforms have no real teeth.

DONNA FRYE: To the extent we can put in hard numbers and project the annual savings, we have. And those have been done. They were challenged in court by the no on Prop D folks and they lost. The numbers that are not hard and fast numbers in the reform relate to the reduction in the retiree healthcare cost. We don't know the exact amount that will be. It could be up to $42 million. We don't know. The same thing with the voluntary defined contribution pension plan. We do not know the exact numbers and it's very difficult to predict those. And we didn't want to put out false numbers. But I do want to say as far as the city council and the mayor taking action to look at meeting cost savings and matching the dollar per dollar, we did that. And at the city council meeting, Vince Mudd and a variety of retired business people looked at our plan, looked at the numbers and said if you do these things, we believe that we can solve this structural budget deficit in five years. And we committed to a $73 million much as far as what we would commit to bringing in on an annual basis. So we already have done that. And Carl knows this.

CARL DEMAIO: Well, don as you know, that resolution was a symbolic resolution, it has no legal binding effect on Proposition D. And in fact, the only city official empowered to trigger the tax is the city auditor, and the conditions are so loosely written and so easy to achieve without actually generating any cost savings that the city auditor has said publicly at the audit committee, that resolution that you passed that you've included as part of your big fanfare of combine to try to convince voters that they're getting some reform, he said that it has no legal impact and no binding impact on his decision on trigger the tax once you run through these reforms. And Maureen, the reforms are plain English. . When you read them, it's shocking how little tax papers are getting. For managed competition, the only thing the city as to do is publish a how to guide, only in government can you publish a booklet, a how to guide, and declare victory of reform --

DONNA FRYE: Maureen, if I may. I just want to talk about what Mr. DeMaio just said related to the fanfare of reform. The only people that are out doing this fanfare and the stunts and the tricks and the games are Mr. DeMaio and has opponents. We have sat down and put together a workable reasonable solution. All Mr. DeMaio and his frat boys have done and run round town with a. And in GOP, terror no guarantees. But I will tell you even though there haven't been guarantees in place, are the council has passed more than a hundred and 50 million in permanent ongoing reforms and we've cut a hundred and $50 million more. And Carl knows that too. So we have a good track record to try and avoid any further service cuttings. This would finally complete that.

MAUREEN CAVANAUGH: I'm speaking with council members dona Frye and Carl DeMaio and we are talking about the city of San Diego's proposition T. And Carl, an additional state sales tax as Donna said, of $0.01, is said to expire next June. So even if Prop D succeeds, we will be paying less in sales tax right now than we will right now. So how can that hurt our economy?

CARL DEMAIO: There's two issues there. The state passed a budget that does not balance. Everyone agrees that it does not. It was a get out of town billion. Like what we see in the city council here locally. The legislative analyst up in approximate Sacramento has said it is up to $10 million and not more in deficit. So I really expect Sacramento to come back and extend that quote temporary tax. Just like this temporary tax over five years again, if it passes, will be extended through the same short of shell games that are being placed to get it past. But Maureen, the most important thing gets back to the core challenge that we have and that is restructuring and reforming the 73's finances, starting with the pension fund. If you give them a half a billion dollars more in money, it takes the pressure off of real change. It buys them time. Time for more city employees to final he reach that trigger point, which everyone agrees, as soon as you become retired, the about benefits are set in stone. But the vast majority of our liability, Maureen, relates to city employees that are currently workings. We are running out of time to reform those benefits. Soap the half a million dollar power play to get the money is to push back the day to get that day of reckoning. We need pension reform now if we're gonna restore our city's financial health.

MAUREEN CAVANAUGH: Donna Frye, opponents of Prop D have been calling the idea that we're gonna be doing deep cuts in the city's budget if this proposition fails, they have been calling that scare tactics. What do you say is going to happen to the city's budget if Proposition D fail?

DONNA FRYE: Well, first of all, they're not scare tactics and as my opponent knows full well. Of we have already had to make some very serious cuts to public services. For example we have rolling brown outs right now with the fire department. And everybody knows it. We also have fewer police officers, and we've cut the civilian staff for the police. There are very serious implications when we have to keep cutting deeper and deeper and deeper. So it's not a scare tactic. It's a way to let the public know what is happening and what they can reasonably expect. And we're talking parks and recreation centers. We're talking libraries. So essentially it comes down to a very simple issue. You can go ahead and vote no on Prop D as Mr. DeMaio want you to do. And save a full penny on July 1st. Or you can vote yes and save a half a pen, but by choosing that half cent. We can end the fire station brown outs, we can actually keep police on patrols in the neighborhood, keep the libraries open, keep our city's swimming pools open and stop the back sliding. And I'll give you a perfect example. In my community and other communities throughout the city. We used to have community service centers. We have had to start cutting back the hours, then we started changing days and finally we had to close them down. And my concern is once they are shut, they're not coming back. My community service center is gone. It's not coming back. This is not a scare tactic. This is reality. And we have a plan to fix it. We want to work together to do that. Mr. DeMaio wants to run for mayor and make this his plank for his political platform. And I'll tell you something. If and when we solve this budget deficit, and we will if prop K passes, his cam plain plank for mayor, which is I'm the save your for fiscal doom goes right out the window. So fiscal security is really bad for Mr. DeMaio.

CARL DEMAIO: Look, Donna, I think your constituents deserve more than personal attacks. This is about our financial future. It's about working families having to pay a half million dollars more in taxes during the worst economy. It's about city labor unions that control our city council members, and the best example of that is proposition C, something the voters asked for, but the City Council members locked arms with the labor unions to block it for four years. All the billions of dollars in cost savings, Ms. Frye, that you could have achieved for your taxpayers to keep those services going, those are on your head. The pension reform, the outrageous and unsustainable benefits that people are getting in city service, $61 million shared by the top ten city retirees, 227,000 annually for the city librarian. That's almost double what she was earning when she was actually working for taxpayers. And the list goes on and on. These are indefensible, Donna. And yet you have sat there, your colleagues on the city council have sat there and not reformed them. Now you're saying give us a blank check, half a billion dollars of course. I think there's a bigger issue here besides sitting here and saying we've got people out this who are opposed to Prop D. You bet I'm opposed to Prop D. I believe the public is opposed to Prop D. And they're really sick and tired of a city council that is out of step --

DONNA FRYE: You know full well that this city council has worked with this mayor.

CARL DEMAIO: Show me the results Donna.

DONNA FRYE: $300 million.

CARL DEMAIO: Show us the results.

DONNA FRYE: You also know that the examples that you cite that you run around town and play games with, city librarians making outrageous pensions. We all think they're outrageous. That's why we stopped them. So going back and focussing on the sins of the past is not going to change anything and it won't reduce that librarian's pension by one dime. And you know it.

SCOTT MARKS: We're not focussing on the sins of the past.

DONNA FRYE: For the past five years.

MAUREEN CAVANAUGH: Okay. One at a time.

CARL DEMAIO: The concern Donna is the future. You do not have in Prop D, Maureen, the reforms you need to end the gravy train in the pension system. What you do have is a half a billion dollars in extra tax revenues. If they wanted to have reform with revenue, they would have put in place serious pension reforms. They would have committed to dollar targets for actually achieving taxpayer savings. They would have committed actually doing competitions rather than merely publish a how to guide.

MAUREEN CAVANAUGH: Let me ask you a question if I may. You have been asked on several cases to produce a budget before the election showing how you would close San Diego's deficit by cuts and reforms without the additional revenue of Proposition D. Why haven't we seen those numbers?

CARL DEMAIO: We're putting together a budget so we can hit our midyear budget deadline. We have a budget process. And my office will -- this is it probably the first time a council member will produce a budget for the city. And we will do that using the city's schedule and budget adjustment. But what have I already done and we've put out over $90 million in cost savings options that the mayor and the council members have sat on their hands and done nothing about. We've also put out a pension reform plan. And we updated it with memos and worked with our city attorney. So we've pursued Maureen, a that you feel, method logical and focused method, to achieving a fiscal recovery package for the city. And that needs to be put to a public vote. I really believe at the end of the day, Prop D cuttings to the very issue of trust and accountability. In Prop D as it's written, there's no accountable for.

A. Are, and there's no guarantee of cost savings. So all that you have left with is the word and the promises of city leaders that have burned us in the fast.

DONNA FRYE: And all we have now, Carl, is your promise that you have some magic plan that you'll release some time some day, and that somebody might get to see it. We have put together a plan that has been vetted by the economic development folks that have been retired business people. They say it adds up. We have the chamber of commerce supporting this. These are not lobbyists, Carl, and you know it. These are people that are respected in the business community. And they know it works. What Carl wants to do is say don't trust them, trust me, Carl the save you're who will come in and rescue you.

CARL DEMAIO: Donna I'm saying.

DONNA FRYE: Carl isn't gonna rescue anybody. All Carl wants to do is promote himself in his run for mayor. Of and he knows it.

CARL DEMAIO: Donna, this is not about me, it's not about you. This is about the future of our city. It's about managed competition that voters voted on four years ago. That's specific.

DONNA FRYE: And you know Carl -- I would rather put my faith --

CARL DEMAIO: This is about pension reform.

DONNA FRYE: The mayor and the council --

MAUREEN CAVANAUGH: Let me ask you, just a straight out, question, Donna if I may.

DONNA FRYE: Yes.

MAUREEN CAVANAUGH there is a big issue about trust in city government.

DONNA FRYE: There is.

MAUREEN CAVANAUGH: And I'm wondering how it is that you could get the voters to trust the city council and mayor Sanders to do the right thing with this money when there aren't those hard numbers in there, and when it is -- it's not written in stone the way this money needs to be spent.

DONNA FRYE: And as I said earlier, there's a lot of things that are written in stone. But over the past five years, if you look at the reforms and the cuts and the changes that have been made, there were no guarantees those were going to happen. There was nothing in writing that said that we would complete six years of backlog audits or start making the full pension payments or reducing the city employees' compensation by six percent, setting a new baseline for compensation, eliminating 1400 positions and saving over a hundred and $80 million through reform. There was no guarantee that was gonna happen. But it did happen and it has happened. And it continues to happen. Of and Prop D is the thing that is timely going to allow us to not have to cut services and finally get this city on the right track.

MAUREEN CAVANAUGH: I want to give you both the opportunity to give a closing statement as to kind of bring it home, your position on Prop D. Let me start with you Carl DeMaio.

CARL DEMAIO: Donna Frye would like this to be about me. I know she's very upset that we have gone around town explaining and educating the public about what Prop D is, and all of the tens of millions of dollars, that we can implement, such as managed competition, pension reform, which is well document bide our city attorney and other pension experts, a number of other examples of improving efficiency in city departments of all that add up to more than $90 million. Obviously she's upset and attacking me of but our coalition is not just council member DeMaio, it include the tax payers association, 14 other small business groups, and you know what? I suspect it includes the vast majority of San Diegans who are fed up with empty promises, you have yearned for a city government that works again, who've expressed that with pension reform, check heck when we defeat Prop D, it will finally be time to implement reform and get a city government we can be proud of again. It's not about I personality, it's about the future of our city.

MAUREEN CAVANAUGH: And Donna Frye.

DONNA FRYE: Well, issue the city council and the mayor, we've worked really hard over the past many years to reform and save money. We've saved over a hundred and $52 million from city reforms as well as a hundred and $82 million in ongoing permanent budget reduction of that's well over $330 million. But really what we're facing with Prop D is a very important choice about the future of our city. And one thing people need to be clear about, next year without Prop D, there are basic city services that will be cut or eliminated. More for approximately $0.30 a day per family. We can actually restore our services and stabilize our city's finances once and for all. We know about the state sales tax going down. So we're talking about an actual reduction in sales tax. But go ahead and be angry about the sins of the past. And I certainly understand it. I'm among those who are angry. But it doesn't solve the problems we face today. And Prop D does.

MAUREEN CAVANAUGH: Thank you, Donna Frye. So much. Thank you Carl DeMaio for coming in and debating this issue.

CARL DEMAIO: Thank you.

MAUREEN CAVANAUGH: I want to remind everyone that election day is next Tuesday, November 2nd. You've been listening to These Days on KPBS.

I'm Maureen Cavanaugh and you're listening to These Days on KPBS. It's not easy to talk intelligently about movies called Jackass and Douchebag. But the KPBS film club of the air has never taken the easy road.