Want the news summarized?
Subscribe to The Morning Report.
Tuesday, July 19, 2005 | Mayoral candidate Richard Rider first got involved in politics in 1977, working on the campaign that helped pass Proposition 13 a year later. The historic ballot measure capped state property tax increases and served as the landmark initiative in the tax revolt that defined a prevailing mentality toward smaller government ever since.
“It’s always good to win your first one,” said Rider, a retired stockbroker who now runs Economy Telcom, a multi-state telecommunications broker.
And while Rider can claim victories in Proposition 13 and a major tax-stripping lawsuit bearing his name, he’s not shy about his defeats.
He’s taken unsuccessful stabs at public office six times before: state senate, governor, county supervisor, county treasurer and twice for Congress. Rider v. County of San Diego – his successful attack on a 1989 half-cent sales tax increase that he claims has saved the county’s taxpayers $3.3 billion – is his prized contribution to a cause he’s fought for and lost in court or at the ballot box several other times.
Rider, 59, is looking forward to his next defeat, although he hopes it’s in his bid for re-election rather than this year’s 11-candidate contest to replace the resigned Mayor Dick Murphy, who stepped down Friday.
“They’ll hock their houses to get rid of me,” he said, referring to the 11,000 public employees he claims should be held more accountable for the city’s fiscal mess, which includes a pension fund deficit of at least $1.37 billion.
That’s fine by him.
“The longer you stay in government, the more you become part of the problem.”
The Libertarian party activist isn’t afraid of bucking the establishment and has even done so when creating the San Diego Tax Fighters, an alternative to the San Diego County Taxpayers Association he once referred to as the “Downtown San Diego Businessman’s Subsidy Association” because of stances on city spending he’s viewed as lenient.
“We’ve had our go-arounds, but we still work together from time to time,” he said. “We try not to make a big deal out of our checkered past.”
But the former Navy supply officer isn’t interested in making or keeping friends in the city bureaucracy, and often makes light of it in debates.
“I’ll be very unpopular.”
Voice: When you think of the job of mayor, what do you think is the most critical thing the new mayor needs to accomplish, and within what timeframe?
Rider: It’s not just the pension deficit that’s the problem, and it’s not just the illegality of the pension that’s the problem. We’re paying public employees 20, 30, 35 percent more than in the private sector, and we’re tacking on pensions two to five times higher in the private sector, if people in the private sector even have a pension. And, of course, the health care is an open-ended, unknown expense, which is growing rapidly. If you don’t bring those expenses under control, all the other things that you do, or you want to do, are really largely irrelevant. Obviously, if we don’t solve [the pension fund problem], we’re looking at two unpleasant alternatives. One is to continue to cut back services and the other is to raise taxes, and I don’t favor either one of those. I think you have to go after the core problem, which is one I think everybody gives lip service to, but I suggest I’m the only one that has the concrete solution.
Given the situation with the city of San Diego, please talk about what’s the most comparable thing or comparable success you’ve had?
I’d suggest that the most important factor, when you look at a candidate is, will they do what they say and have the backbone to do what’s necessary? You talk a lot about leadership and bringing people together, leading by example – all very important things, – but if you don’t have the backbone to look somebody in the eye and say “you’re fired,” which is something I don’t think [the other candidates] can do. Donna Frye’s made it clear. In the piece she ran in the Voice of San Diego, she doesn’t think the pay is too high. She doesn’t think the pensions are too high. She’s not going to cut it. New York Myke, who talks very tough, he’s having a little trouble thinking about the idea of actually having to fire someone. Actually having to say you either adjust or someone else is going to do your job. I don’t see anyone else in this race who’s going to be that hard-nosed about it. And that’s the only real option.
Tell us what you’ve done in your past that’s the most comparable to being the mayor of San Diego.
Well, nothing compares with being the mayor of San Diego, but I’ve taken some very unpopular positions. One of the things about running for mayor is that you better be going to put up with a remarkable negative experience, including death threats. I’ve taken on unpopular positions and was in unpopular positions with the Chargers for instance, because there are a lot of Charger fans.
I’ve taken on a number of different issues, and I’ve won some, and lost a lot. But I’m willing to do that. The way I look at it, I don’t have the long-term vision perhaps that the others do. I’m not convinced I’m the guy who should set the tone for San Diego for the next 20 or 30 years. I’m a fixer. You need somebody to come in for three years and solve this problem. Truth is, if they do the job right, they won’t get hired again. They won’t win re-election. That doesn’t really bother me. I have no future in politics. I’m not running for higher office. And that’s fine.
I’ve run a large operation for the Navy and had about 150 employees working for me. I have had private contractors and military working in the same operation. And I got to see how people act under different consensus. One of the things that really stunned me was how they could change the incentive system. For instance, you have to lay off employees because of cutbacks, and they then went to work for the private contractor and were more productive because the incentive system is different. I think that I could bring that experience to the table, but it’s really secondary to be willing to put up with a room full of howling people, and pickets outside; you’re going to make 11,000 people very, very mad at you. And I don’t think most people in this race, when push comes to shove, are ready to take that on.
Could you give an example of a specific situation in your past that you think is similar to something you might encounter as mayor and how you handled it?
I took on the Charger deal … and we went down to City Council and suggested that this measure shouldn’t be put on the ballot. It was an argument about the pros and cons of the city guarantee.
I’ve been to speaking engagements where I’ve been hissed and booed and yelled at. I’ve been at others where I’ve been applauded and cheered. I don’t care. Everybody likes to be liked, but that’s way down my list of priorities and, again, it comes back to ‘are you willing to stay the course?’ Too often we’ve seen people who’ll say one thing and do another. Mayor Murphy’s a good example. Remember how he was very suspect about the downtown ballpark and he didn’t think the downtown library sounded like a good idea? Once he gets into office, he changed. A lot of times it’s called the Edifice Complex. He had this uncontrollable urge to build things with other people’s money and forgot about minding the store. He changed entirely from what people thought they were electing. And that happens from time to time. It’s not going to happen to me. But people might not like me, but they know what I’m going to do beforehand, and it’s not going to change when I get into office.
Often we hear politicians talk about the first 100 days. What’s your first 100 days going to look like and how long before you think you can have an impact?
Now that’s a good question because all the candidates, when we go out to these forums, we all sound like we’re going be dictators. We’re going to do this, and we’re going to do that. The mayor doesn’t even legislate. The city council legislates.
As I see it, you first go to the city council and you lay out what’s got to be done, encourage them to take the right step, but don’t wait for them. Tell them: lead, follow or get out of the way. Hopefully, they’ll change their path, but I don’t think so. Almost every city councilman, Democrat or Republican, is bought and paid for by the labor unions. So, given that that doesn’t change, and I can’t imagine it will, you do what Arnold Schwarzenegger should have done and didn’t. And he made a huge error. He tried to continue to negotiate with the legislature, and he lost that honeymoon period. That first 100 days. He should have gone to the voters with the initiatives necessary to change things and in June 2006 we have another chance.
We have time to get measures on the ballot that will mandate competitive bidding that will change some of the fundamental problems that we have and Carl DeMaio is looking at one right now which will be on the ballot in 2006. It’s a major pension reform initiative. You’ve got to move quickly. Three years is a very short time frame.
After 100 days, your popularity should start to drop. So I think you have to move very quickly to essentially circumvent the city council and instead go to the people with measures and see whether or not they will support us. And I think they will. I think there’s a broad, widespread, ideologically neutral dissatisfaction of the way the city has worked.
At the end of your term as mayor, and you’ve said it’s probably a one-term job if you’re elected, what’s your vision of the city, and how will we know if you’ve been successful?
A very unhappy set of city employees, who’ve had to either take pay cuts or are no longer employed, a savings of about $250 million a year, which will allow us to pay pension obligations so they’re greatly reduced. There’s no easy way out of this. It all comes down to fiscal recovery. It’s not a cure-all.
We are in a meltdown right now. And bankruptcy doesn’t solve it. Bankruptcy will not solve our problem because as far as I can see, I can’t imagine a bankruptcy judge ruling about the pensions. If you went into bankruptcy court and had 18 properties with no liens against them, and the judge says ‘how come you can’t pay your debts?’ and you say, ‘well, I don’t want to,’ that may not go well with the judge. So it’s unlikely that the bankruptcy judges will overturn this. State courts may very well overturn some of the illegal pension issues, but I don’t think a bankruptcy judge will. The goal is at three years to right the ship – if you use a cliché – to stem the losses that we have now and basically bring our city costs under control. If we don’t do that I think we’re in for some very, very bad times. Whoever takes charge at the end of three years, they may muck it up or they may follow the example. I hope it’s the latter.
How will we know if you’ve been successful?
Whether or not the budget is balanced. Whether or not we have raised taxes. I have failed if we’ve raised taxes. The goal is not to go into appeasement and right now we’re looking at various modes of appeasement.
For many years we’ve used “America’s Finest City” as our paradigm. Do you think this story is out of date and if so, what is our new story?
I think “America’s Finest City” refers primarily to our weather. I don’t think we’ve ever been a city without scandal if you look back. All the way back to the Yellow Cab scandals and even beyond. We’re not the Mr. Clean city that the politicians would like to have us believe. We need to improve the rest of city government to closer match the fine weather that we have. Right now we have a stark contrast with the dark nature of our city government and the wonderful city of San Diego.
Imagine the headlines two years from now. What would you like them to say?
I know what I’d like them to say, but I’ll tell you what I expect them to say, ‘Thank God he’s gone.’ Because there will be a lot of talk, and there’ll be a disruption. I hope not, but there is no easy, painless, group hug-type method of solving this problem. And I’d like people to say he did the job that had to be done, but I’m glad he’s gone.
So you’re saying the headlines will say we’re glad he’s gone, but if you would have done your job, won’t the people have loved you and won’t they want you back?
Wanting someone back and winning the election are two different things. The 11,000 city workers will hock their houses to get rid of me. They would use smear, innuendos, scandals, if that’s what they can come up with, real or imaginary, and so I won’t be able to fundraise to that level. I will not be able to fight that, and so I think I’ll have a pretty negative impression when I leave office. Let’s hope I have sense enough not to run again, but I’m not going to promise that because I’ve seen too many people, once they get in office, decide they’re going to run again to finish the job, and I might be just as foolish. But realistically I don’t think that’s going to come through into a second term, no matter how good a job I do.
We view you as the privatization guy. That seems to be the big difference between your plan and everybody else. How does this solve the entirety of our problems?
It doesn’t. We’ve still got a pension obligation to the existing employees, but if they’re no longer working, that pension obligation comes to an end as far as further funding. If an employee who is age 45, no longer works for the city, they’d still have their pension up until that point, which they can still start drawing at age 55. There is no cure-all for this. Yes, we should try to get the courts to say that the pensions are illegal, but again, that’s a crapshoot. I’ve been to court way too many times to know that you might have a strong case, and what they rule is something different.
Privatization is a win-win. Either the city workers make the major concessions. We’re talking major – not just pay freezes – and they’re the only ones that can make them. We can’t make them. They have to make them. They make the major pay and pension concessions to keep their jobs, or we get it done less expensively by the outside. Either one is fine. Privatization’s a bit of a misnomer.
Competitive bidding is the right term. I cite the example of Indianapolis. When the mayor came in with widespread competitive bidding and a far less financially desperate situation than we have now, the city employees of course were given the option to bid on it. And what happened is, as with the county of San Diego, you end up contracting out [some things and not others.]
It’s important that you do a proper contract. You can design contracts either way. You can design so that only private sector wins. You can design it so only government wins. You have to design a truly neutral, well-written contract. I’d steal people from Indianapolis to have them come out here, pay them whatever it’s worth that’s necessary to get this properly done. So I’m not trying to get 80,000 people out of jobs. It’s up to them whether they want to work. They have to decide, we simply cannot afford to continue to pay what we’re paying now and if they’re not willing to make that concession, we have to go to plan B.
Outsourcing. Here’s your competitive bid. What do you want to do? You want the contract or not? And I have trouble picturing the unions making the necessary concessions. There are things the government can do to be more efficient. That’s one of the things we found in Indianapolis. Normal government incentive is counterproductive. Spend everything to have the budgets and get it next year. If you have more employees, you as a supervisor get paid more. There’s a variety of anti-efficiency measures built into any government. Bureaucracies worldwide work the same and they’re just naturally designed not to deliver services at the most efficient cost.
You’re going to have to deal with civil service laws when dealing with your employees, and how you’re laying them off. You’re also going to likely have to get a charter memo to do outsourcing, which could take a while. Meanwhile, we’ve got a pension deficit that’s growing by the day. So what do you in the meantime to stem that?
You don’t pay it off until you get the problem taken care of. You don’t allow land sales. We’re not getting full value for our properties. No one issues pension obligation bonds. We don’t raise taxes. We don’t raise fees. We can put this off for another year. I don’t want to, but we can put it off for one more year to solve the problem. If we go into appeasement mode, I’m afraid the pressure to solve the problem goes away. People feel that somehow they’ve solved it and actually we have not. So I push very hard for the idea that we don’t go into appeasement. We push hard to solve the problem.
That’s why I mentioned the June 2006 election; we’re going to have to have a change [to allow more outsourcing.] Although it’s not clear, I’m no attorney but I’m getting conflicted stuff on how much we can privatize. The city does contract some things out, but they’re not aggressive. The county does much better. I’ll give you an example. One of the things I’d like to privatize is what Riverside County did. Riverside County, a few years back, had some financial troubles, so they took their libraries, which are still open, and they went out and they said, “does anybody want to run our libraries?” And [the contractor] said we can either save you 30 percent and provide the same services or you can pay us the same amount now and we’ll increase the services here and here. As it turned out, Riverside chose Plan B. That’s the sort of envelope I’d like to push. I think there are areas that we can privatize. And we’re not talking about theory. We’re not talking about some new crazy idea. It’s done now. Almost everything I’m talking about.
Now as we’ve seen recently with Duke Cunningham in the past couple weeks, government contracting can be rife with scandal.
Tell us why you think somebody in the private sector – who would be much more likely to be a campaign contributor, or have as much influence as a union head – is going to be more ethical.
You really touched another good point. Contracting by government can be done just like it does everything else. It can be done very, very poorly, and it can be done correctly. One of the great things about contracting out, which I don’t think is fully understood, is when you get a bad company, you can get rid of them. Try to fire a city employee, let alone a whole department. You mentioned civil service rules, after a few years, for all intents and purposes, barring criminal activity, they’re going to be there for the duration. The majority of contracting is written contracts with proper performance requirements. You can dump a company that’s not meeting performance requirements. Is there room for corruption and payoffs and so forth? All of that exists. But if you look at what we have now, that’s exactly what’s happening on a far greater scale.
The 11,000 city employees, through their unions, have bought and paid for every single person down there legally by getting endorsements, campaign support and basically elected everybody since 1998 that agrees with them. We have no representative down there, not one, who represents an anti-union, anti-union’s the wrong term, a pro- taxpayer position. We don’t have a single person down there. And that corruption is 100 percent.
You often cite Mayor Goldsmith of Indianapolis. He’s got a lot of fans, people like yourself, but his detractors will note that when he left office there was a pension deficit and allegations of wrongdoing. For example, he had gotten increased campaign contributions from people who ran his golf courses and stuff like this. So we want to know why it’s different just because it’s going private.
Again, it won’t be perfect. That’s what can happen. Of course, people who contribute to me want a shot at the contracts. Is that going to change my viewpoint? No. Are they going to have a better shot at the contract? No. They’re going to have to bid for it. But they like the idea of being able to bid. From our standpoint as taxpayers, that’s beneficial. Will somebody get paid off? Will the government run less than at a pristine level? Probably so.
But right now, we’re in a terrible situation in terms of our government being entirely paid for and getting incredible paybacks, huge paybacks, based on the fact that [the unions] bought the City Council and the mayor. Every city that’s gone to privatization, whatever imperfections have occurred, has had a benefit from it.
One of the problems is when you try to budget the cost of the city doing the service, they inadequately calculate the cost of the fringe benefits. When you do good contracting, you figure that in. One of the things that happened to Goldsmith was that he was a little too generous. When city employees won the contracts, one of the imperfections that occurred is they weren’t adequately calculating the magnitude of the pension and the health care benefit. Nobody does.
At what point, either timeframe or issue-wise or some sort of measurement, do we know whether or not your plan has succeeded, and we can rule bankruptcy out?
If I’m not successful by June 2006 in getting measures passed, or the City Council decides to change their tune, at that point it’s very difficult to see any [other option]. I really don’t want to go into bankruptcy. I think it’s being way overplayed as a solution.
You’ve repeatedly said throughout the debates that you’re the fix-it guy. So we want to know how you fix a problem and save a city without vision, without using privatization?
My vision is just more short-term. My vision is a sound fiscal city providing the services that people want so the city gets fixed, the light bulbs get changed. I mean, how many government workers does it take to change a light bulb? We need to get back to the ability to take over infrastructure, public safety – the rudimentary things. I’m not interested in building an opera house, that’s so far down the road, and not something I would even do with government money. The downtown library makes no sense to me. Sports subsidies are off the table. There’s no way we should be giving the Chargers anything in their new deal. If they want to cut a real deal where we are properly compensated, fully compensated, we can discuss it, but that’s not what they’re after. So you take those visions off the table and you come back to do what a city’s supposed to do. Deliver the service, services without tax increases and with no charter deterioration.
The bottom line when I run is not whether my answers are right, but whether or not I’m a credible candidate. That’s the number one issue.
The Howard Jarvis Taxpayers Association has endorsed me. And for better or for worse, I’m the guy who strongly represents the taxpayers. It’s what I do.