Aug. 11 2010 10:29 AM

We're against the sales-tax increase—for now

Carl DeMaio

It seems as though some strident opponents of increasing the sales tax in San Diego are under the impression that CityBeat is in favor of it. This might be a good time to clarify our position.

In November San Diego voters will be asked to approve Prop. D, which would impose a new half-cent sales tax to close a budget deficit starting next July that’s estimated at $72 million and to restore some civic services that have been cut in previous budget rounds. The sales tax is tied to measures aimed at reforming aspects of the city’s employee-pension system and outsourcing some services to the private sector.

We are not in favor of Prop. D. Not yet, anyway. We might support Prop. D if its high-profile opponents—the San Diego County Taxpayers Association, the local Republican Party, City Councilmembers Kevin Faulconer and Carl DeMaio and the conservative Lincoln Club—can’t come up with a specific plan to close the budget deficit without raising the sales tax.

We have said several times now that the city should have begun pulling the levers years ago on two revenue sources that would net about $65 million per year: imposing a trash fee for single-family homes (putting them on par with apartments, condos and businesses) and raising the storm drain fee that all property owners pay (recovering the full cost of clean-water mandates). If the city were to raise its real-estate transfer tax to the California average, another $41.4 million would be added to the general fund. And there you have a possible total of $106 million, eclipsing the $103 million that the sales-tax hike would generate. But raising the trash and storm-drain fees would take two years to implement. The city should still initiate that process, but it likely wouldn’t provide budget relief until 2013. That leaves us back to square one for next year.

When asked recently by City Councilmember Marti Emerald to give some idea of the impact of $72 million in cuts to the city budget, city Chief Operating Officer Jay Goldstone invoked 700 in police-officer layoffs and closure of half of San Diego’s fire stations. No doubt, public-safety concerns will be used by Prop. D supporters, leading opponents to decry the deployment of scare tactics.

No, we don’t think the city would choose to lay off hundreds of cops— the city’s cop-citizen ratio is already among the lowest compared with other large U.S. cities—or shut down fire stations. But it will have to find $72 million (or more) somewhere, and in the past year, during which the city had to find more than $200 million, it took more than $100 million from onetime-only sources. The city has streamlined much of its bureaucracy and cut employee compensation by 6 percent. City leaders have been through numerous rounds of budget balancing in the past few years—if there’s tens of millions of dollars worth of bureaucratic fat left to be liposuctioned out of City Hall, no one seems to be able to locate it. We don’t want any more services cut.

That brings us to DeMaio and Faulconer and their supporters, who argue that there’s no need to raise taxes because there are still a lot of reforms to the city’s employee pension system that need to be done. It’s DeMaio who appears to be driving this bus—Faulconer seems to be hitching a ride. Faulconer and his spokesperson have been cagey when asked to provide specifics about how much money can be saved in next year’s budget through each desired pension reform. Tom Aaron, DeMaio's deputy chief of staff, on the other hand, provided CityBeat with a brief analysis of each reform.

The problem is, as Thomas noted, each reform would have to be “scored” by an actuary in order to determine how much money would be saved in the next budget year. We certainly support No. 2 on DeMaio’s list: “Obtain full fiscal analysis.”

Look, we’re easy targets for the opponents of Prop. D. Even we liberals don’t want to pay more in sales tax than we have to—even if it’s just 20 cents on a $40 purchase. But time is of the essence. We need to know exactly how much each reform will save taxpayers each year, and we need to know that each reform stands an excellent chance of being enacted, legally and/or legislatively. And we need to know this before November.

Show us the money, and our opposition to Prop. D just might stick.

What do you think? Write to

Aug. 11 2010