It is intellectually stimulating to be on the voiceofsandiego.org again: at the center of the policy cross-hairs. The focus of my posts will be on reconstructing the public spirit in the City of San Diego. This includes a discussion of revenues, expenditures and priorities in the rebuilding of our public sphere.
Jon Dunchack raises some important questions leading with “What do San Diegans really pay?” He comments on the exchange between Pat Shea and Joe Flynn that we are in a blind on how much we really pay. This question is quite significant especially since a Union-Trbune watchdog report, as well as the recent Kroll report confirmed that San Diego’s love for services and hatred of higher taxes have contributed to the financial crisis.
As a starting point, my report, the “Bottom Line” presented some evidence that the city of San Diego has the lowest general revenues in proportion to its tax base. One indicator of this is the per capita revenue, which is among the lowest amongst the 10 largest cities in California:
Per capita revenue, however, does not capture the tax base which includes income. The city of San Diego has a median household income ($55,637) which is slightly higher than the California statewide median income ($53,629). (Source ACS Census 2005) In other words, we are about the average, not at the bottom, in terms of income. However, our city’s general revenue as a percentage of income is the lowest among the major cities in California.
Here is the computation for this analysis that includes income:
Overall Tax Rate = Total Taxes/ Total Income = Taxes per Household / Mean Household Income
What is important is not the indicator of tax base (median income or mean income) but the relative distribution. The problem with using median household income (50th percentile) as a central tendency for a tax base is that it creates the notion that the bottom ten percentile contribute as much as the top ninetieth percentile. Regardless of the indicator used, San Diego lands up at the bottom of the list of cities in terms of per capita (or per household, or per business) discretionary revenue.
If the city were to raise its general revenues to the average rate in proportion to household-income for Californians in the 10 largest cities, it would generate additional annual revenue of $358.6 million.
Commenting on the Bottom Line, the Independent Budget Analyst (IBA) said in a report:
The IBA supports creating a public awareness campaign, as recommended by the report, with the goal of further educating the public and the business community on the role of local government. … The IBA encourages an open dialogue in the near future between the City and the public regarding the desired level of services and means to pay for them.