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Measure C Asks San Diego Voters To Approve New Hotel Tax

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Measure C asks voters to approve a hotel tax hike to pay for a convention center expansion, homelessness and road repairs.

Speaker 1: 00:00 San Diego's tourism industry is hoping to convince city voters to approve a tax hike to raise money for a major convention center expansion. KPBS reporter Eric Anderson reports measure C also promises money to fight homelessness and paved local roads.

Speaker 2: 00:19 The yes on measure C kickoff event happened across the street from the San Diego convention center last December.

Speaker 2: 00:27 Tourism officials, politicians, and union workers hailed the potential economic windfall of a new hotel tourist tax that could raise billions. The money would go for convention center expansion, homeless programs and street repairs. I've been involved in a lot of campaigns and ballot measures. I have never seen more diverse and stronger coalition that cuts across all portions of San Diego because we need this funding source. Kevin Faulkner is the mayor of San Diego and a big backer of the initiative. We need a permanent source of funding for homeless services. We need to expand our convention center and the dollars. This will mean for road improvement. These are the issues that San Diego is care about. Faulkner has long pushed for a convention center expansion, but several attempts to make it happen in recent years have failed. Just getting this measure on the ballot stumbled two years ago when the first petition drive didn't collect enough valid signatures.

Speaker 2: 01:20 Faulkner says, the city deserves this redo. It's the first time that it's actually going to be on the ballot and I think that's why you're seeing so much enthusiasm. Measure C asks voters to boost the city's hotel room tax between one and a quarter to three and a quarter percent depending on how close the hotel is to the convention center, which is a tax that visitors poll when they come to stay in San Diego and they stay in one of our hotels. Carol Kim sits on the convention center board and works for the building and construction trades council. She says the tax hike would raise more than $6 billion over the next four decades and the tax hike doesn't expire.

Speaker 3: 01:58 We're telling voters upfront, we're saying we're not just going to raise this tax and let anybody do what they want with it. We're going to raise this tax and spend it specifically on three things to be specific buckets, the convention center, expansion, homelessness, streets and roads,

Speaker 2: 02:12 but that plan doesn't sit well with everyone. Community advocate, Donna Frye says people have to remember they're voting on a new tax and they're getting only limited input on where the money will go.

Speaker 3: 02:24 If you had $1 billion in new tax revenue, do you think the best use of that would be to expand a convention center or do you think that it should be used for other purposes?

Speaker 2: 02:39 Fry says people should not be misled. The bulk of the money raised by the hotel tax, 59% will pay for the convention center expansion and then the operation of the facility. Fry says that's a huge tax subsidy.

Speaker 3: 02:52 What they've done is they've tried to combine it. The hotel guys have tried to combine it with homelessness roads and make it sound like it's really for homeless people and for roads when there is no guarantee, there is absolutely nothing in the measure that says any housing mobile built for the homeless.

Speaker 2: 03:11 The measure doesn't outline how any of the money raised for homelessness will be spent. Instead it relies on the city council to decide whether it will fund services or housing or some combination of the two. San Diego tax fighters founder Richard rider says San Diego already has too many taxes on the books and he's not a fan of bundling issues together. Lovey attacks, what the voters decide on that tax based on what it is being used for. If we're going to have a separate tax for the homeless, okay, put a separate tax for the homeless on the ballot. Don't try to fool people into thinking this will pay for everything. Writer says the tax will create billions in new revenue for the city, but he worries city officials are playing a shell game by creating dedicated revenue streams for the convention center. Homelessness and road repair. The city frees up general fund money. We spend a tremendous and ever increasing amount of our money on pensions. So when we spend more money on on the homeless here, it frees up money for what government's number one priority is, which is paying for the pensions. And retiree healthcare because measure C is a dedicated tax increase. The ballot measure needs a two thirds majority vote to pass. If approved, the initiative would raise the hotel tax rate and allow the city to borrow money for the convention center expansion.

Speaker 1: 04:33 KPBS environment reporter Eric Anderson is joining me. Eric, welcome. Thank you Eric. Mayor Kevin Faulkner has pushed for a convention center expansion for years. Talk about some of the stumbling blocks that this proposal has previously faced. How did we get here?

Speaker 4: 04:49 Um, it's been a long and torturous road, uh, for the effort to upgrade the convention center to expand the convention center. Um, the last, uh, kind of a stumbling block was the failure to get a measure like this on the ballot a couple of years ago. Um, the petition effort failed to get enough valid signatures to do that. Previous efforts, uh, to work, uh, uh, outside of the ballot, uh, outside of the ballot box to find ways have fallen short. Um, there have been land sales, uh, there have been deals where it's cost the city money, uh, to, to acquire the land for the expansion. And then it turned out that they didn't get what they needed to make it happen. So, so many, many different failed attempts to get this convention center expanded, have fallen short. And this is the latest version.

Speaker 1: 05:36 So why do supporters of major see, say a convention center expansion is necessary in the first place?

Speaker 4: 05:42 Yeah, this is a big thing, a big point of emphasis for a San Diego tourism industry. The hoteliers are also interested in increasing this and what they say is that big conventions that the facility is not big enough to handle big conventions. They point to which spills out outside of the convention center. They have many venues, uh, nearby now and they like to be able to consolidate, uh, that convention under one roof in one space. Uh, and that's where they say at lax and they say that by not expanding you don't have the capacity to keep these shows and the economic boost they bring to the region in the area.

Speaker 1: 06:21 And as you say, this is a tax hike for visitors who are staying in hotels within the city of San Diego. How much of an increase are we talking about?

Speaker 4: 06:28 Uh, well, I want to make a point of clarity there. It's not necessarily a tax hike for visitors because locals also stay, uh, in local hotels. Um, if a family wants to go to paradise point, for example, uh, for a long weekend, uh, as part of their summer, uh, they will be paying that tax as well. What it taxes is every time there's a stay in a hotel room, San Diego charges somewhere around 10 and a half percent. Uh, tourist, uh, occupancy tax is what it's called. It's a hotel tax. Uh, this would increase the tax rate three and a quarter percent for facilities that are near the convention center and then a declining tax. The further you get away to one and a quarter percent for those that are [inaudible]

Speaker 1: 07:07 pretty far away. As Carol Kim mentioned in your story, measure C has the potential to raise $6 billion over 40 years. I do supporters have a sense of how the funds would be allocated. For example, how much money would be dedicated to the convention center expansion compared to a homeless services?

Speaker 4: 07:24 Yeah, that's actually very well defined. Uh, the convention center expansion project will get 59% of that pie moving forward right into the future as long as the taxes on the book and it doesn't expire, uh, homeless services will get 41% of that pie for five years. And then after that five year period, a 10% of that 41, a quarter of that 41% would be dedicated to roads, uh, road improvements, uh, around the city of San Diego. And those numbers where that money goes, uh, seem to be, uh, finite.

Speaker 1: 07:58 So would any of the money then be used to specifically pay for housing for the homeless?

Speaker 4: 08:04 So the homeless money that's generated by this, uh, tax hike, if it is approved, uh, will, the city council will determine how that money is going to be spent, whether it's going to be spent on, uh, services for the homeless, whether it's going to be spent on programs designed to get people off the street, whether it's, uh, going to be spent on building actual housing for the homeless. That's something that, uh, is in the city council's purview to decide how that money is spent, but they have a definite amount of money that they're working with.

Speaker 1: 08:34 And what about homeless advocates? What are they saying? Do they believe this could make a dent in the homeless crisis at all?

Speaker 4: 08:40 Well, I haven't looked into this terribly deeply, but I do know that people who advocate for the homeless and, and wanting to try to work with them say it's great to have this dedicated funding stream there. They applaud the fact that that money will be available. Uh, but I think there have been some questions raised about exactly how that money's going to be spent and whether or not it will be spent in a way that, uh, everyone sees that it's making a difference.

Speaker 1: 09:05 And what about measureL , which says that all ballot measures should be voted on in November. Why is measure C then before voters in this March primary? Well, the conventional wisdom about having a tax

Speaker 4: 09:18 measure ballot initiative in November is that in an off year, non November election, you have fewer voters at the polls. And the voters that do come tend to be more conservative. So you have a better chance of getting that passed. Measure L says that on the whole initiative should be held in November, but it also allows for initiatives to be held, uh, in off, you know, off primary years as well. So having this in March doesn't violate the letter of the law when it comes to measure Alba perhaps. Uh, it doesn't quite match up with the spirit of the law.

Speaker 1: 09:56 I've been speaking with KPBS environment reporter Eric Anderson. Eric, thanks so much for joining us. My pleasure.

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Maureen Cavanaugh and Jade Hindmon host KPBS Midday Edition, a daily radio news magazine keeping San Diego in the know on everything from politics to the arts.