The City Council approved a set of financial reform proposals offered by a group of business leaders earlier this week. We discuss how the financial reform plans could affect the city's budget in the future. And, how will this action impact the business community's support of Proposition D.
Guests
Bob Kittle, Director of News Planning and Content for KUSI.
John Warren, editor and publisher of San Diego Voice & Viewpoint.
Tony Perry, San Diego Bureau Chief for the Los Angeles Times.
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This is a rush transcript created by a contractor for KPBS to improve accessibility for the deaf and hard-of-hearing. Please refer to the media file as the formal record of this interview. Opinions expressed by guests during interviews reflect the guest’s individual views and do not necessarily represent those of KPBS staff, members or its sponsors.
GLORIA PENNER: Well, gentlemen, thank you for your astutely insights, and let us move on. So while state lawmakers may be feeling a bit relieved about getting the budget finished, city of San Diego officials and community leaders are in a growing tizzy about the fate of Proposition D. This is the measure on the city ballot on November 2nd that would raise sales taxes in San Diego by half a cent, if the city meets ten conditions to reduce expenses, curtail spending and curtail pension. This week Prop D supporters got a boost from the San Diego regional Chamber of Commerce which came down for a yes on Prop D. At the same time, a long list of major business groups announced their opposition. So Bob, why are we seeing such a division in the business community?
BOB KITTLE: Because the business community traditionally would oppose higher taxes because they're bad for the economy. In this case, the good old boy network kicked in at the Chamber of Commerce. And I don't say that to disparage anybody's motives but the reality is that mayor Sanders persuaded the leadership of the Chamber of Commerce to delay their vote two weeks ago because they were prepared to vote against Prop D. Two committees of the board had already voted against Prop D. And the mayor, this is still a city where personal relationships among about 250 people make may difference. A lot of the people on the chamber board are friends with the mayor. And the mayor had considerable influence with them. I don't question the mayor's sincerity in what he sees as the matters of the tax. But I think this was a case where personal relationships Trumped the sort of the normal interests of the business community as far as the chamber is concerned. But as you said, the business community, much of the business community, I would dare say most of the business community Aopposes this tax.
GLORIA PENNER: So you're saying that the mayor went in, he didn't have to twist arms, he used the power of his personality, he didn't have any particular arguments to use?
BOB KITTLE: I would say he twisted arms with a huge smile on his face. I don't think he was threatening anybody, but he was very aggressive in wooing on a kind of personal level key members of the board of direct offer of proofs of the Chamber of Commerce. There were about 33 people, I believe, who voted, 20 for it, and then against was the number I heard, although no vote total was announced.
GLORIA PENNER: So John, basically what I'm hearing Bob Kittle say is that the board of the directors of the Chamber of Commerce was wooed by the mayor, and that they really don't represent the business community, which is opposed to Prop D, according to Bob.
JOHN WARREN: And I totally disagree with Bob on all points. First of all, let us not make the mayor the scholar and the leader that he is not. I think that Vincent Mudd in terms of the plan that he put forth with the three points to say we'll buy the hundred million dollars a year for five years if you do three things, you know, save $73 million in the general budget, limit servicing of prepares to 23 million, and I forget the third one, but those things were important. The mayor had this idea months ago, he it weeks ago, Mudd kept going back to him, some in the community business said, well, look, some of us want to support this, but we don't want it to be just like National City and all the other cities that gave dollars in terms of a sales tax increase and still ended up with a deficit. So it was the timing of these things coming together, and a perfect storm that elevated the mayor to the crown of statesmanship that Bob is giving him. But there are still people in the business community who disagree vehemently. Some scholars have said, the public doesn't pay that much attention to the sales tax. It's based on residency as opposed to place of purchase. The ones who are concerned in businesses are the auto dealerships, and all the big ticket items. They're the ones concerned, they are not representative of the total.
GLORIA PENNER: Our number is 1 888 895 5727. We're talking about Proposition D, the role of the business community, as you can see, Bob Kittle and John Warren have opposing views on this. And it's really it's curious to find out, that you know, the views are the views that we've heard from other people as well. But you've crystallized them so well that I'm sure that our listeners want to become part of that. You've mentioned Vince Mudd, John mentioned Vince Mudd. So Tony, he's not exactly a household name although he's starting to become one. What is this power that Vince Mudd has had?
TONY PERRY: Well, he sits at the right hand informally of the mayor, and he helped devise this program that we are now we are now debating. All mayors have kitchen cabineteers, and he happens to be the one for this mayor. Two points on the chamber business, one, if a Republican mayor of San Diego can't bring along the San Diego regional Chamber of Commerce when he needs them, he ought to pack up and move back to Fresno. That's the way this city functions. And two, the whole idea that the Chamber of Commerce is politically powerful is an anachronism, it's left over from the days of C. Arnold Smith and James Copley, and it's a real figment of the small town mentality of San Diego. Tell me quickly, who runs the chamber of commerce in Los Angeles, San Francisco, New York, Denver? They are what they are.
GLORIA PENNER: The mayors.
TONY PERRY: Indeed. And that we look to the Chamber of Commerce is well, it's sweet. But it doesn't really speak to the reality of a major American city in the 21st century.
GLORIA PENNER: Okay. Well, let's dip into our phone bank here because we have many, many people who want to talk about Prop D and we'll start with Ramona in downtown. Ramona, you're on with the editors.
NEW SPEAKER: Thank you of I've lived here for 25 years and I love San Diego. But the last two years I've noticed that cuts were made to city personnel, I've experienced deteriorating roads, less park upkeep, and I'm particularly concerned about public safety and further cuts to police and fire services. I think this man was crafted in a nonpartisan way. It's a well intentioned effort. And I would urge citizens who care with this city to vote yet on D.
GLORIA PENNER: Okay. So there's a definitely yes for D vote from Ramona. And it's fascinating to think about whether the people who actually live in San Diego are able to experience what the budget has wrought in terms of the our surroundings with the roads and the parks and that kind of thing. And will Prop D actually improve our environment? Bob Kittle.
BOB KITTLE: That's exactly the point, Ramona. I think everybody has noticed the pot holes, certainly, if nothing else. In terms of declinging services 6789 the problem with Prop D is that it does not guarantee that the money, the extra money, the hundred and $2 million a year from the sales tax, will go toward those services, and the reality is that the city's pension crisis is such that every year the city and the taxpayers have to put more into the pension plan, and the pension plan is going to gobble up an additional one helped million almost a hundred mill I don't know over the next five years, so where will this money go? It will go to pay for the pension problem because that's something that's an expense that the city cannot get out of.
GLORIA PENNER: Tony Perry?
TONY PERRY: But had the counsel said this money must be used in thus way then boom, two thirds we need at the poles. Absolutely impossible. Remember.
GLORIA PENNER: Sure.
TONY PERRY: This is the community that voted down better fire protection after the big fires in the transient occupancy tax. It don't forget, also, the idea that this is such a back breaker. We will still even at 9.25 percent would still have a sales tax below Los Angeles, Long Beach, Oakland, San Francisco. Only equal to that of San Jose. A couple of small towns in this county have a higher sales tax. The idea that this will just absolutely put Phil's Barbecue out of business, I just don't quite be that.
GLORIA PENNER: Well, Phil's Barbecue is apparently a place that the the no on Prop D people are gonna be holding a fundraiser.
TONY PERRY: And I'll gonna be there as a journalist finding out what's going on and I'm gonna be slurping up those ribs and sauce along with everyone else. But I saw Phil on TV last night saying I just may not belong to the chamber anymore. And I thought shiver me timbers, Phil, what does the chamber do for you as you hock your ribs and cole slaw?
GLORIA PENNER: Well, he's not the only one. I went to the sign on San Diego web page when they announced the chamber's decision, and I looked at all the comments and there were a slew of comments from business owners saying they were gonna pull out their membership from the chamber.
TONY PERRY: Please, never presume the comment left after on a newspaper website represent anything but a very slender, usually very politicized and left or right wing that just is not at all I think representative of any sort of community.
GLORIA PENNER: Thank you for that journalistic comment. I appreciate it. John Warren.
JOHN WARREN: I'd like to make three points, number one, when we talk about the hundred million dollar in the plan that the mayor adopted that came from the Vince Mudd task force remember that required in that is a $73 million reduction in spending each year of that's a major factor. So that's an effort of dwindling down. A $23 million limit, $20 million limit of how much of the hundred million can be used for restoration cuts. That's important. And at the same time we're looking at making adjustments in terms of payment so that new hires will have to pay more of their benefits of those are all very positive.
GLORIA PENNER: Okay. John.
TONY PERRY: Well, in fact
GLORIA PENNER: Bob issue before you return the comment, I just want to make sure we get at least one more caller and before the break. Because they have some interesting things to say, and then we'll get back to you. Remind me if I forget.
GLORIA PENNER: Marco, hi Marco you're on with the editors.
NEW SPEAKER: Good morning Gloria, I've lived here 20 years and as much as I hate to say this, I really think this proposition needs to fail. I think the voters need to become outraged at the deficit in the city government. I think the city needs to declare bankruptcy, AKA reorganization, this opens the door to getting rid of the DROP program which is the essence of of the pension debacle and is was brang out into court all the chichaneries that caused previous administrations to underfund the pension to get bond measures passed, I mean, the same fraud that's brought this country down in the real estate business occurred in getting the bonds passed. We have a rating issue.
GLORIA PENNER: Are you Marco Gonzalez?
NEW SPEAKER: No.
GLORIA PENNER: Oh, okay. All right.
NEW SPEAKER: Just a resident.
GLORIA PENNER: Just plain Marco. Okay. Thank you for your comment Marco, we appreciate that. Of course we have had some of this pension stuff out in court and nothing happened right?
TONY PERRY: We tried for four years to either litigate or penalize the pension situation. Failure failure failure. We lost four years in tackling this problem. Court is not the place to go. Bankruptcy is just not going to happen.
GLORIA PENNER: So Bob, guess what? We're up to the break but I'm gonna keep your comment of we're gonna come fresh out of the break, and right up to Bob Kittle.
BOB KITTLE: A tease for what we're going to see.
TONY PERRY: The truth.
GLORIA PENNER: Stay tuned for Bob Kittle. This is the Editors' Roundtable I'm Gloria Penner, we'll be right back after the break.
This is the Editors' Roundtable, I'm Gloria Penner. I'm at the roundtable today discussing San Diego's Prop D, this ballot measure that's going to be on your November 2nd ballot if you are a voter in the city of San Diego. And with me today, Bob Kittle from KUSI, from San Diego voice and viewpoint, John Warren, and Tony Perry from the LA Times. We have a full bank of phone calls a lot of people wanting to get in on this discussion, but I did promise Bob Bob before we went into the and all of you who were listening that he would get the next statement. Bob?
BOB KITTLE: I'll try to be brief but just picking up on Marco's comment on voters should be outraged. I think we've seen a lot of new information just in the last week or so that gives voters more reason for outrage about the pension problem. Carl DeMaio the city councilman who is a huge thorn in the mayor's side brought out the numbers showing that, you know issue we've got one retiree from the city making a pension of just shy of 300000.
GLORIA PENNER: Wow!
BOB KITTLE: Another 20 or 25 who are making between 200300000. Scores and scores making more than a hundred thousand and in fact these people make pensions that exceed their highest year salaries by a significant amount. We had the example and you could say it's just an anecdote, but Michael Zuchett, a counsel member who was forced out of office when he was convicted of public corruption. Those charges were later set aside by a judge, but he started collecting his pension at age 35. Now he likely could and I wish him a long life, if he lives to, let's say 85, he'll collect that pension for 50 years, now does it make any sense for someone to start collecting a pension at age 35? I don't think so.
GLORIA PENNER: So how does that affect Proposition D?
BOB KITTLE: Well, it's the outrage factor. It's a remainder to voters that the real problem in this city, the real structural deficit is the crushing cost of this outrageous pension system for retirees.
GLORIA PENNER: But isn't that part of the requirements that that task force headed by Vince Mudd is insisting upon?
BOB KITTLE: No he didn't address pensions. There are other aspects of Proposition D that would address pensions for firefighters, for example for new hires. The Vince Mudd plan as John outlined it required some other kinds of fiscal discipline. But the problem with Vince Mudd's plan, if counsel fathered it, it would be great, John, those are good things. The problem is, it was simply a resolution adopted by the counsel. They haven't come anywhere close to finding $73 million in cuts and they won't. Or all the other things that are in that resolution, a new counsel can ignore it, and will ignore it, Jerry Sanders and Donna fry won't be around when those things are supposed to come through. So it was a nice gesture. But I view it as frankly a fig leaf to give the chamber a reason to go ahead and make the mayor happy and endorse his tax increase.
GLORIA PENNER: You paint a pretty picture. Bob Kittle, thank you. Before we go to that, we are going to pick up some of these callers. Let's start with John in city heights. John, sorry to keep you waiting. Go ahead please.
NEW SPEAKER: Good morning. It's not surprising that the chamber voted in favor of Proposition D after chief lance down came on the city TV yesterday and blackmailed and threatened the tourist industry that if they didn't vote for Prop D, he was going to eliminate tourist protection in the gas lamp. You know, the problem with Prop D, and the problem with the counsel's approach is they always are cutting the normal residents saying oh, we're gonna shut down park we're in the gonna have protection in your neighborhood when they haven't cut their own staff, which is more than a hundred people, they provide there's a huge revenue source, TOT, more than a hundred million dollars, which they're providing to the zoo, institutions, under TOT, you talk about the highest salary, the highest salary of the city of San Diego is more than $500,000, the city pays out of TOT to the director of the opera. You know, as long as this city has $10 million a year to give to the zoo to keep a herd of elephants I don't think we should be voting for Prop D.
GLORIA PENNER: Okay, thank you very much, John. Let's let's get some final comments to John or anything else that's been said. First of all I'd like to point out along with John that both the city's police and fire chiefs released the proposed cuts for their departments for the next fiscal year. Was the timing meant to still support for Prop D? What do you think?
JOHN WARREN: Oh, I'm sure it was. You see the firemen, then you got a fire where a house burned because of a garage and they were late. Exceeding national averages all of that was pulled together to, you know, to frighten people into making that so yes, but I think we missed something, that the City Council did agree to increase the payments into its own pension and to make cuts in terms of staff, and it's done so with very little discussion about it, but they are making major concessions in this processes and I think that they should be commended for it.
GLORIA PENNER: Final comment from you, Tony.
TONY PERRY: The pension situation is an agony, it's affecting cities and counties across the country of everybody got real generous, now like a drunk we've woken up and we have a terrible headache. That said, the city of San Diego has been living in a fool's paradise for years. We underfund the city terribly, we fewer cops than we need, fewer firefighters than we need. Don't have near the taxes nearly every other city has, garbage, let's talk about that, let's talk about a utility tax, we've run this city like a libertarian theme park, and the bill is finally coming due, and the fire chief and the police chief are saying if may happen. You want to role the dice? Role them. But keep your eyes open that this city may finally have to take these cuttings that have been sort of looming all over these years.
GLORIA PENNER: I was sure Richard Ryder would immediately call in when you said that we've run this city like a libertarian theme park. So Bob Kittle, you go ahead and wrap this all up.
BOB KITTLE: Some may think a libertarian theme park is a good idea. But just quickly, on the reform that John cited, the city council voted this week pay more for its own pension. Here quickly are the numbers: Each City Council's pension costs $30,000 a year. The tax payers have been putting in about $27,500, the council member had been putting in 2,500. City Council agrees to increase its payment to about $6,000 a year, leaving the taxpayers to pick up the other $24,000, that's what masquerades for reform on the pension plan. And it is an outrage.
GLORIA PENNER: Okay. Thank you very much, gentlemen, and thank you callers. And there were several callers we didn't get to. Please go to KBPS.org on your computer, slash, the Editors' Roundtable, and go ahead and register your comment there, and I'm sure there will be lots more after yours are registered and Tony we don't choose what comments we put on our website. We put them all up unless they're defaming. Okay. So now we move on.
