The Morning Report
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The theme I tried to run throughout my story on the new tobacco law today is that the city has had ample opportunity to implement the sting operations against underage tobacco usage before Monday’s vote.
In fact, the city has brought in at least tens of millions of dollars since the Big Tobacco settlement of 1998, in which it complained it couldn’t cope financially with the costs of the health problems caused by cigarettes.
But instead, that money is tied up in a pension bond. Businesses such as grocers, liquor stores and gas stations will pick up the tab of the sting program, each paying about $163 annually.
It’s the second time this year that the city of San Diego will ask groups for money outside of a traditional tax increase to help it cope with its billion-dollar pension deficit.
When the city approved the water and sewer rate hikes in January, a portion of the increases included money that would be used to pay for employee pensions and retiree health care. Here’s what we reported in January:
The higher water bills are expected to generate about $194.2 million by 2011, and $18 million of that sum would be directed to retiree healthcare while $9.6 million would go toward the pension deficit, an analysis of city data showed. Of the $204.6 million raised over the four-year stretch for the wastewater system, $24.6 million would be set aside for retiree healthcare and $7.6 million would be sent to the pension fund.
Had the city not needed the money for the retirement costs, the increases that are being seen by water and sewer ratepayers today would have been lower.
- Also, comptroller Greg Levin called to clarify the estimate he provided me for the amount of money the city receives in tobacco settlement revenue. While this year’s cut of the tobacco revenue is still unknown (we used Levin’s “top of the head” approximation of $11 million), the city received about $9.7 million in tobacco funds last year.
Nonetheless, that figure is still several times more than the cost of the $220,000 sting operation program that businesses are now paying for.