City Sales Tax Measure Will Be Decided By SD Voters
GLORIA PENNER (Host): The 6 to 2 vote to send a reform and revenue measure to the November ballot for San Diego city voters to decide felt kind of anticlimactic. It was the whirlwind of activity and unusual political cooperation that led up to the vote that was the drama. So, Ricky, what in your opinion, was at stake in this council action to have the voters decide whether they want to accept a city sales tax hike if the city does go ahead and enact a series of reforms. Did I complicate that too much?
RICKY YOUNG (Watchdog Editor, San Diego Union-Tribune): Well, you asked what’s at stake and I think the very future of our city is at stake. So how’s that for drama for you?
PENNER: That’s good.
YOUNG: You know, but really what’s at stake is whether we’ll pay a half-cent more in sales tax and whether that’ll get the city $100 million more dollars to help toward its budget deficit. Now to achieve that they’ve promised a number of reforms, you know, or they call them reforms but they’re revisions here and there to how the city spends its money, who contributes what for retirement, who gets what kind of pensions, but, you know, a lot of this affects, obviously, new hires so it’s not going to really do a lot on either end to undo the hundreds of millions of dollars of obligation the city has to pay pensions that have already been granted and aren’t going to be taken away.
PENNER: You know, I have the feeling, and let me turn to you on this, David King, that voters are going to say, okay, they’re going to enact all these revisions or reforms or whatever you want to call them, but is there a dollar figure involved? Do they have to hit a certain dollar benchmark? And if they save, let’s say, $70 million, which is now the number they say our budget is – will be in deficit, if they can save $70 million in reforms, then I can go ahead and say, okay, you can tax me because I want to keep us on an even keel. But they don’t have a dollar number, do they?
DAVID KING (Founder/Editor, sandiegonewsroom.com): They don’t have – they don’t have a dollar number and they don’t really even have criteria for determining whether or not the measures have been satisfied. The principle behind the measure is good but it’s thrown together and it’s – it’s a sales tax, that’s what it is. And if the leaders of this city believe we need a sales tax then they need to make the honest case to the people of San Diego that a sales tax increase is necessary. This is putting wings on a pig and hoping it’ll fly. I don’t think it’ll pass, and if it did pass it would be overturned in court. There’s 10 reforms, so-called reforms. There’s 10 of them. They fit on one page of paper. When it was voted on by the council and approved 6 to 2, it wasn’t even reduced to writing yet. That shows how thrown together it was. And it’s vague. And the reason it will be overturned is because it is so vague and it leaves the city auditor with authority to impose a tax upon the city’s – the City of San Diego, and you can’t do that. You can’t leave him that much discretion. That’s legislative authority and the city council needs to do that themselves if they believe that a sales tax is necessary.
PENNER: Okay, well one of the other members of San Diego media did a poll on this. I’m not going to tell you what the result was. Let’s do our own informal poll with our listeners and see whether, number one, you think it’s a great idea for this to be put on the ballot for you, the voters of San Diego to vote on, and number two, if it is on the ballot, how are you going to vote? Our number is 1-888-895-5727, 895-KPBS. If you want to know what ‘it’ is, it’s sort – it’s got a long name but I think if you call it the Reform and Revenue Measure it boils it down. If the city enacts enough reforms then they will be given permission by the city auditor to put on the ballot a city sales tax. Our number is 1-888-895-5727.
YOUNG: Gloria, it’s not – The auditor doesn’t give them permission to put it on the ballot. The auditor certifies that the reforms have been made which then has the tax kick in.
YOUNG: They’ve already put it on the ballot.
PENNER: Right, right. I thank you.
YOUNG: That’s okay.
PENNER: And what I really want to do, I want to talk a little more about the auditor’s job. But first I want to get to the sense of desperation that David King kind of gave us the aura of when he said, you know, it was all on one page. It wasn’t really well thought out. It was more an idea and it rolled along. David Rolland, is that your sense? Was this desperation that they finally came up with something that at least would get the city council moving?
DAVID ROLLAND (Editor, San Diego CityBeat): Oh, it was the textbook definition of desperation. Look, we’ve all – anybody who’s been paying attention to the city’s finances has known that this train wreck has been coming for a long time. It’s been coming for years and everybody knows it but nobody wanted to push any kind of revenue increase because they just thought it was a political nonstarter simply because of the pension system. The deficit, the current structural deficit is born, really, of two things, the exploding level of retirement benefits for employees and how much of the budget that consumes on an increasing level and, but also the recession and the decreased tax revenue in sales taxes and property taxes, in hotel taxes, that’s also a huge part of it. So Carl DeMaio and Kevin Faulconer can say that this is a pension tax but it’s also a recession tax. There are multiple factors that go into our structural deficit. I’m – Now I’m forgetting your question.
PENNER: Oh, it doesn’t matter. I think you enhanced it with your answer. The point is, I think, now what we’re seeing is a rather unusual coalition of people, David King, who have come together. The mayor has said that he’s supporting putting it on the ballot and he has always said in the past no new taxes, no increased taxes, so obviously he’s changed his mind. We have the business community, elements of it, coming together. Chamber of commerce, the Regional Economic Development Corporation, labor, some labor groups. I mean, this really is an unusual coalition. Usually they’re at odds. Republicans, Democrats.
KING: I – You’ve got Jerry Sanders behind this, I mean, or supporting this. You’ve got the chamber of commerce on the fence about this, otherwise you’ve got business interests against this. Generally, the principle is a good one, and Donna Frye summed it up well and this is what Mayor Sanders said when he was running for office the first time, he would only support a sales tax and tax increase if there were reforms first, and that’s what Donna Frye has said here. But this doesn’t get us there. This is thrown together, this the Bride of Frankenstein. This is not going to pass, and if it did, it would be overturned. It won’t go. But we’ve got six votes saying that what we need to do before we raise taxes is enact these reforms. Some of these are duties that the city already has. The city would – passed Prop C back in 2006 and hasn’t outsourced anything. They have to outsource, they have to make pension reforms, they have to make all these necessary reforms to fix the structural deficit, part of which is as a result of not getting back as much money as we contribute to Sacramento. But there are a number of different issues that need to be cleaned up before the people of San Diego would support a tax. They might support a tax but I think the people see through this as being disingenuous.
YOUNG: Yeah, I think the whole thing will hinge on exactly what David is saying, which is how much people buy that these reforms are reforms or whether they’re enough. It was all sounding familiar to me and last night I looked back through some old clips from Orange County, California where, you know, you ask about desperation, during their bankruptcy, they went to voters with a half-cent sales tax increase called Measure R. And, you know, the alignments of the interest groups are very similar to the ones that are developing here and they made basically the same case. Unless you give us this money, government will shut down and, you know, there’ll be – things’ll be terrible. Voters rejected that by 61%. Now it was not tied to any of these reforms so I think that is going to be a key is selling people on that these are, A, reforms and, B, enough.
PENNER: Well, I think our listeners are doing a wait and see. They’re not going to commit themselves until they hear more about this. And you’re going to hear a little bit more about this when we come back from our break. We’ll take your calls. This is the Editors Roundtable. I’m Gloria Penner.
PENNER: This is the Editors Roundtable. I’m Gloria Penner. We’re talking about a ballot measure that’s going to be on the ballot for City of San Diego voters and it’s going to actually ask you whether you want a sales tax increase of one-half of one percent. It can only do that, however, if certain reforms are taken care of before that, and that’s what we’ve been talking about thus far this morning. Let’s hear from our callers now and see how they feel about all this. We’ll start with Frank in San Diego. Frank, you’re up next, please.
FRANK (Caller, San Diego): Hello. Hi, Gloria.
FRANK: Hey, I’m just sitting here listening, and thank you. I’m – my – what I’m really feeling is that, you know, I think what’s important here is that the citizens get to – I don’t know how well educated they are. I’ve done some reading on the independent budget analyst’s site and some information put out by Mary Lewis, the chief financial officer, that says the city, in reforms and savings, has saved over $335 million. I think the real question is whether or not the people in this city believe and entrust the people that they’ve elected.
FRANK: You’ve got six people, council members, that are putting this out there. Yes, in fact, it may have been thrown together but I they are trying to tell everyone that, you know, if you want more cuts then, you know, that’s probably what you’re going to have to make a decision on in this vote. And people have, I think – A lot of cuts have been made and I think it’s critical that the citizens get educated and understand if they want more then they’re going to have to make, you know, vote that way. But in the end, you entrust the people you vote – put into office. You got six council members and the mayor, which is probably 80, 90% of your elected officials. If you don’t trust them then hire – then vote others in later…
FRANK: …and let them vote for you.
PENNER: Well, actually one of them is going to be termed out at the end of the year anyway and she was sort of the mover/doer/grand compromiser, whatever they’re calling Donna Frye these days. She’s sort of reinvented herself as a viable political person, I think. It’s my opinion after doing all this. I know that David Rolland is eager to comment on this. Go ahead, David.
ROLLAND: Well, first of all, it’s important to say that—and listen to this—if this sales tax passes, people will be paying less in sales tax at this time next year than they are now.
PENNER: CityBeat said that, didn’t it?
ROLLAND: There is a state…
PENNER: Explain that.
ROLLAND: There is a statewide 1% sales tax that will sunset in mid-2011. So our sales tax will actually, in final analysis, go down by half a percent. You could…
YOUNG: But let the record note that Dave Rolland believes the state will do what it says it’s going to do in a budget situation.
PENNER: So are you saying then, Ricky, that the state may not sun…
ROLLAND: Well, absent of any – Yeah, absent of any other action, that’s what is scheduled to happen.
YOUNG: Oh, okay.
PENNER: Okay. Well, that’s good – that’s good to…
YOUNG: I’m glad to hear that.
ROLLAND: That’s not accurate? Absent of any other action?
YOUNG: I don’t think that – I think you might find some of our listeners don’t believe the state in terms of any promises it makes about its budget. They imposed the tax, they can extend it. But…
PENNER: David King, you want to weigh in on this?
KING: Well, I would tend to go with Ricky on this. I mean, with the state with its $25 billion hole right now, they’re going to aggravate that by cutting a sales tax or allowing a sales tax to sunset? It’s a guess but I don’t see it happening.
PENNER: Well, we don’t know but I think that’s an interesting thing to consider, that this is on the books and it is supposed to be sunsetted. Finally, let’s take one more call, and the other callers, I urge you to list your comment on our website, KPBS.org/editors. Want to hear what you have to say. But, George, we will take your call. Please, go ahead. George…
GEORGE (Caller, Escondido): Hello?
PENNER: Yeah, George in Temecula.
GEORGE: Hi, Gloria.
GEORGE: Nice to meet you. Actually, I live in Escondido but I was just presently in Temecula. Anyway, I don’t think they should do the sales tax and I think the city should finally just bite the bullet and do the bankruptcy. And I think, as far as I understand, doesn’t that wipe out the city pensions and all that, then they could just renegotiate with the unions and everything?
PENNER: David King?
KING: There’s debate about what impact the pension would – what impact bankruptcy would have on the pension. There are strong advocates for municipal bankruptcy and you’ll hear that echoed for years because we’re not getting out of this mess for years. We’re like a marathoner who’s got a cramp at the 15th mile. There’s a long way to go and this is going to hurt. And we’re going to have to be smart to get across the finish line.
PENNER: Okay, final comment from Ricky Young.
YOUNG: Yeah, the $330 million in savings that’s been accomplished at the city was mentioned and I think that a key part of this campaign will be will the voters think that a sales tax will undo progress that’s been made and allow sort of backsliding on that sort of reform. You know, the mayor yesterday mentioned that one of the problems that the sales tax will fix is they’ve had to cut city salaries. Well, I don’t think that the residents of San Diego necessarily object to cutting city salaries. I think some of them feel that maybe they’re a little high already. So, you know, I think a key part of the campaign will be making a case that giving the city another $100 million a year is a good thing.