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San Diego Councilman Wants Infrastructure Fix Without Tax Hike

A San Diego worker fills a pothole in the South Park neighborhood on April 29, 2014.
Claire Trageser
A San Diego worker fills a pothole in the South Park neighborhood on April 29, 2014.

Mark Kersey proposes restricting future revenues and pension savings to fix roads, other infrastructure

San Diego Councilman Wants Infrastructure Fix Without Tax Hike
San Diego Councilman Wants Infrastructure Fix Without Tax Hike GUEST:Mark Kersey, councilman, San Diego

So finding a place to live in San Diego can be tough. Calls are high in land and housing are at a premium. My next guest know that all too well. A reporter with a voice of San Diego. She just wrote a piece on how developers may have found the last affordable neighborhood in San Diego. It is Tijuana. We have heard in the studio. Also on the phone we have Eric Bruvold who is the president of the national University system issue for policy research who knows the housing market well in San Diego. Welcome to both of you. Maya I enjoyed your piece a lot. I wanted to get you on. What you all that developers might be heading to Tijuana? Is actually meeting a few smaller developers who were telling me that that is where they were interested in building. Greg Shannon was one of the developers featured in my story he actually told me he had a theory that Tijuana could be San Diego's next affordable housing market. What is going on down there? Right now there is a view small developers from San Diego who are trying to get some project started. Some are having better luck than others. They are basically trying to get her out how they can build down there apartments and hotels so that hopefully it will become a trend. Is this a matter that they were driven down there, that they were having a hard time developing and San Diego and they told they might have it easier time if they Michael South? Partly -- but it is also a timing issue. For a long time there was perception that the Mono was a place that was not very secure. After 9/11 order security increase a lot and made it more difficult to cross the border. Now with things like century pass is it a lot easier to go to the border and people are starting to go back to Tijuana for tourism purposes. It is going to a revitalization. Ever going to make Tijuana is a were people are living -- do we see a lot of evidence people have already started doing that? People definitely already do that. I think you can see it by looking at the numbers from the [Indiscernible]. One of the most ridden stations and all of the trolley systems. It is safe to say many of those people crossed the border and you the trolley to get to work in San Diego. Why is it so crowded in San Diego that people are looking to Mexico? I would not say crowded. The issue is really the number of housing apartments we have approved an hour housing supply has not kept pace with the job world we have seen in the region. What has occurred is that San Diego's need for housing has been pushed off to both Tijuana and [Indiscernible] empire. That's why we have this peculiar dynamic in San Diego were housing prices seem to go ever up. Eric is dipping in and out. He must have a backbone mine. How practical is this for you to be able to lift and Tijuana and worked in San Diego 1st There are impediments. Crossing the border is not easy for everyone. I do think it is something that is not that difficult if you can consider the fact that people who live into making the and come into work in San Diego everyday. In terms of building more housing, that is something San Diego developers are still trying to maneuver. It is a different country and different laws and processes. Also whether or not an American can own property down there and build down there. If you were a developer that is something that might dissuade you. That is not one of the more difficult is from what I understand. It is in the Constitution a foreigner cannot directly on property within 50 miles of the border. I think it is a certain amount of miles from the coast. If you can own -- you can start a Mexican corporation through which you can own land. So there are ways around that. Or the bank can hold onto the land in your name to a trust. So there are ways to get around that. Is a getting to the point where it is easier to build and Tijuana than it is to build in San Diego? Not yet -- I think these developers are trying to figure some things out. There are problems with financing construction down there. There are still some issues with how to acquire land. They are still trying to figure those issues out. I think is something they see potential in. Eric and a and is this a good thing? Is is a source of more cost housing that could free up -- lower-cost halting? Is how we had dealt with our housing of portability challenges in San Diego for many years. There is some data that suggests that 40% of people that are crossing the border every day are US citizens. Who are already living in Tijuana because of portability issues. The mismatch between the incomes they are paid and the housing costs they would incur if they stayed inside our border. We know tens of thousands of people who work in our County live in southern Riverside County because of the more affordable housing. Is is simply a continuation of the trend we have seen in San Diego where weak reality -- we create more jobs than we uproot housing..Of supply and demand -- that demand is going to be met elsewhere. The regions of the larger metropolitan area we live in. It makes it sound like this is inevitable. Is inevitable people will move south. What. That trend is my But with stop that trend -- is more responsible planning. For us to approve and develop an adequate amount of housing and the amount of job growth we see and we like to see in our region. The only thing inevitable is if we create temperature thousand jobs that only approved 20,000 housing units, that demand is going to be met in areas like southern Riverside County or in Baja. We have proved the social experiment that people will drive ridiculous distances to get to a job that gives them a chance for upward mobility. If we don't build the housing in our region it does not mean they don't come -- the people drive miles on the freeway. Is there any downside to this? Is is a good thing that housing is cheaper down there? I think the big challenge is it requires us to make -- hundreds of millions of dollars in border infrastructure to meet our housing demands by housing people in Baja California as opposed to San Diego -- County. So that we can get people from their houses in southern Riverside County to their jobs in San Diego County. The downside really comes from the infrastructure that we are required to build to keep the county functioning at any kind of reasonable level of mobility. We're just talking about infrastructure earlier. When you're looking that far out you have to start considering where the migration patterns are going to be over the next 30 years. Maya -- a downside to doing this? I think you brought up a interesting point in your article. There are a lot of downsize. There are also potential downsides in Tijuana. Housing that is considered affordable for San Diegans is not necessarily affordable for moderate and low income people in Baja.. Whenever you start building a new neighborhood or a new city because it is perceived as cheaper sometimes you do have effects of interpretation and shutting people who live there out of the market. That can be particularly pronounced in Tijuana. There could be a flood that really pushes people out of their neighborhoods. It is possible -- yes. Do get a sense that people in Mexico whether they think this is a good thing or a bad thing? I think right now most of the people involved in this are people who are working with developers -- the city government who do want to see growth. Having a healthy housing market increases jobs and increases wages. I think those are things they want to see. For the most part they see it as something that is good. There are probably people there who are concerned about it. Just practically, how much does a border really add to your commute time? Can you predict what the border crossing is going to be like if you live down in Mexico? That is a good question. I don't crossed the border enough to know for sure but I do know it can take anywhere from 20 minutes to a couple of hours depending on the day -- the time of day. Whether you have century pass and all sorts of other things. They're doing everything they can to make this easier. To make the border crossing easier? Yes I think there are people that could argue they can always do more. But we have made significant investments -- and there are more investments coming in terms of speeding border crossings. Again -- part of the is a reflection of the fact that we have tens of thousands of people crossing the border every day. Many which are living in Tijuana for working in San Diego County. Is this something that has happened in the past? Has there been overtures -- I hear from people that grew up in San Diego they used to spend a lot more time in Mexico than they have recently. Is this a trend that has come and gone before? Clearly there were two important factors which had an impact on border crossings and in the broader relationship between San Diego and Baja California. Those were the events that happened at 9/11, the crackdown on border security and and challenges which Mexico based in terms of security situation. That resulted out of the drug war. Both of those things at least right now are in I think trends that are conducive to more border crossing. We have seen efforts to improve the infrastructure at the borders so security can remain tight and vigilant. But that we can process more people cross the border at any given our. There has been a better trend in the short term in terms of the security situation and Baja. Are you a believer -- from your reporting with you buy a house in Tijuana at this point? Right now? Yes Right now I would not. So it's kind of wait and see? Yes Will have to leave it here. I wanted thank my guess -- Maya Srikrishnan and Eric Bruvold . Thank you both. I want to do one more update. One or more gunmen opened fire today at San Bernardino Central Center. Law enforcement says several people were shot. Others locked themselves in their office. No arrests have been made. Officials are asking anyone with information to call the San Bernardino Sheriff's Department.

San Diego City Councilman Mark Kersey discusses his plan to fund infrastructure improvements in the city, while San Diego City Council President Sherri Lightner looks on, Dec. 2, 2015.
Claire Trageser
San Diego City Councilman Mark Kersey discusses his plan to fund infrastructure improvements in the city, while San Diego City Council President Sherri Lightner looks on, Dec. 2, 2015.

San Diego Councilman Wants Infrastructure Fix Without Tax Hike
San Diego City Councilman Mark Kersey wants to ask city voters in June to devote future sales tax revenues and pension savings to fix roads and other deteriorating infrastructure.

San Diego City Councilman Mark Kersey announced Wednesday that he wants to ask city voters in June to devote future sales tax revenues and pension savings to fix roads and other deteriorating infrastructure.

Kersey is not asking for a sales tax increase, which had been under consideration. Instead, he proposes a plan that would set aside money from three sources for infrastructure improvements, including streets, sidewalks, parks and recreation facilities, libraries and police and fire stations.

The three funding sources are:

• Future growth in sales tax revenue over the next 30 years.

How this would work is that any additional sales tax revenue over 1 percent would go for infrastructure projects. Kersey estimates this would net the city $3 billion to $4 billion over 30 years if the economy continues on its current trajectory.

• Future savings from pension reform over the next 30 years.

The plan would set aside pension savings from a measure voters approved in 2012.

Kersey said current predictions are that in 12 to 15 years, the city’s pension liability will drop. He wants to dedicate those savings — he estimates them at $1 billion to $2 billion — to infrastructure fixes.

• Half of all new major general fund growth over the next 10 years.

Mayor Kevin Faulconer made a similar commitment in his last two budgets to devote half of the growth in the general fund to fixing streets and sidewalks, so this plan would formalize that commitment.

Current predictions are that this would dedicate an extra $150 million to infrastructure over 10 years, Kersey said.

Independent Budget Analyst Andrea Tevlin has said the city is facing a $1.7 billion funding gap over the next five years between what it needs to repair fire stations, streets, and parks and recreation facilities and the money it takes in.

Tevlin said Wednesday she needs more time to examine Kersey’s proposal before commenting on it.

Kersey said the goal of his plan is to codify infrastructure spending in the future, so leaders will be required to keep funds flowing to repairs. He said city leaders in the past underfunded infrastructure, causing the current funding gap.

“San Diegans will never again have to worry about politicians allowing our city to deteriorate by not dedicating enough resources to infrastructure improvements and maintenance,” he said.

The proposal would amend the City Charter to write Kersey’s changes into law and would have to be voted on in the June election. Charter updates require that 50 percent of voters approve them, not the two-thirds required with a tax increase.

“This is a charter amendment. This will be a mandate by voters,” he said. “It will not be optional.”

While a special City Council Charter Review Committee is undergoing a yearlong process to update the charter, which acts as San Diego's constitution, Kersey said he doesn’t plan to send this proposal to that committee. Instead, he will take it to the city’s Infrastructure Committee next week, and then hopes it will go to the full City Council, which would put it on the ballot.

In an interview with KPBS Midday Edition, Kersey said he decided not to pursue a sales tax increase because he does not think the city would be able to quickly put to use the large amount of money that would generate.

For example, he said, if you're building a new fire station, "you've got to identify the land, you've got to design a project, you've got to go out to the neighborhood for feedback on what that design should look like, you've got to award the contract and go out and get it built and then operate and maintain it."

"That is a multi-year process," Kersey said. "So if you dumped all that money on the city to build fire stations tomorrow, it would still take five to 10 years to build the one you want."

A proposal to build new fire stations is being pushed by City Councilwoman Marti Emerald, a Democrat. After Kersey's interview, his spokeswoman clarified Kersey was not specifically referencing Emerald's bond.

Emerald said she was surprised by Kersey's plan and looks forward to hearing more details on it.

"I don’t know where he’s going with it, don’t know how he’s going to be able to sequester enough money” to cover the infrastructure funding gap, she said. She pointed out that gap does not include costs to build more fire stations, which her bond would do.

"We have a plan for this. It's not something pie in the sky," she said.

In a statement, Faulconer said he applauds Kersey, a fellow Republican, for his work but did not commit to endorsing the plan.

“I have made fixing our neighborhoods a top priority in my administration,” the statement said. “We’re making great progress and there’s more to come. I look forward to the Council discussion on this proposed ballot measure.”

City Council President Sherri Lightner, a Democrat, endorsed the plan, calling it a “creative solution” to secure additional spending.

“It is imperative that as a city we identify and allocate funding sources within our means before we look for outside sources or ask voters to consider approving additional tax increases,” she said.

But Councilman Todd Gloria, a Democrat, called the plan "ballot-box budgeting that falls far short of solving our infrastructure problem and may create additional serious problems for the city's finances."

"Without a long-term sustainable new revenue source to address our infrastructure, San Diego’s streets, sidewalks, and public buildings will continue to deteriorate," Gloria said.

Kersey said he agrees that "in an ideal world" the city wouldn't need to make these changes by ballot measure.

"In an ideal world city leaders would do the right thing and prioritize infrastructure spending," he said in an interview with KPBS Evening Edition. "But over the years, we've seen that is not the case."

In June, the Independent Budget Analyst’s Office outlined different ways the city could raise money for infrastructure repairs. A quarter-cent sales tax increase would raise $68 million a year, according to the report.

While Kersey moves ahead with his proposal, the San Diego Association of Governments, a regional planning agency, is exploring a countywide sales tax increase in 2016 for infrastructure projects. The increase also would have to go before voters.

Tevlin said if SANDAG's proposal goes forward and wins voter approval, the city of San Diego would get some portion for its infrastructure needs but how much is unknown at this point.

Kersey said a county tax increase isn't required for his plan to work.

"A two-thirds vote is very difficult to get on anything, particularly a tax increase," he told KPBS. "If that happens, the way we've designed my proposal is it's completely stand alone, separate from that, we will be in good shape if that passes or not."

If SANDAG's tax increase makes it to the ballot and passes, "that's icing on the cake," Kersey said.

While devoting city funds to infrastructure could potentially take away money that would go to city employee raises, Kersey said he isn't concerned about opposition from union groups.

"If we craft this the right way, they’ll be in support of this or at least neutral," he said.

Mike Zucchet, general manager of the San Diego Municipal Employees Association, which represents white-collar city employees, said he thinks Kersey has "an interesting, creative approach," but his plan may "lock up too much future revenue away from city operations."

"But we are definitely interested in being a part of the discussion going forward," Zucchet said. "I think the capturing of pension contribution savings in the future is particularly sound. It is the capturing of future sales tax increment that might be a little aggressive for our taste."

He said his union wouldn't take a firm position until all of the details on the proposal are presented.

San Diego Councilman Wants Infrastructure Fix Without Tax Hike