Friday, Nov. 21, 2008 | One of the first questions posed to San Diego Mayor Jerry Sanders earlier this month when he unveiled his package of proposed spending cuts to close the city’s historic midyear budget deficit was whether he would consider raising taxes.
The mayor answered the question carefully, saying he would only consider a tax proposal if it came from the people. “[City residents] will let us know if they want to pay higher taxes in one way or another,” he said.
Since his proposal to cut libraries and recreation centers surfaced, the people have given Sanders an earful. Dozens of speakers and thousands of e-mailers have suggested closing the $43 million gap with everything from staffing libraries with volunteers to shutting down redevelopment agencies to slashing the pay of city department heads.
Everything, that is, except raising taxes.
The city’s reputation as one of the most tax-adverse in the land remains intact despite the looming threat of public safety reductions and library and recreation center closures, as well as the possibility of future budget deficits nearing $100 million a year.
The prevailing wisdom, from political advisors to the actual politicians themselves, is that San Diego residents still don’t have enough faith that their money is being well spent at City Hall to approve any tax increase. Instead, despite the significant cuts being considered currently and the looming prospects of nine-figure deficits for years into the future, local politicians of all political stripes say there is still waste to be found and restructuring to be done within the current budget.
Steve Erie, a political science professor at University of California, San Diego, says it’s even simpler than that. San Diegans, in his estimation, are just cheap. “If you wait until [an appetite for more taxes] emanates up from the voters of San Diego, you will wait until hell freezes over,” Erie said, adding that San Diego’s elected officials have never shown leadership when it comes to finding additional revenue sources.
If recent election results are any indication, this penuriousness is not necessarily shared by the voters of other San Diego County cities. Both El Cajon and La Mesa passed sales tax increases on Nov. 4, and National City passed one in 2006.
Proposition A, the county-wide ballot initiative that called for a $52-a-year parcel tax to pay for more fire protection, failed to get two-thirds of the vote on Nov. 4. However, 63 percent of the electorate voted for the measure even though its proponents mounted a lackluster fall campaign.
Any tax increase in San Diego must be approved by two-thirds of voters. And though there is talk in Sacramento of calling for a special election in 2009 in part to address budget issues, California voters are not scheduled to go to the polls again until 2010. Both current and incoming members of City Council say they have no interest at this point in pushing for a tax proposal on any ballot.
Marti Emerald, likely the new District 7 councilwoman pending a final vote tally, said San Diego residents have not seen a good-faith effort by City Hall to cut spending and build in efficiencies. “The government has yet to prove itself,” said Emerald, who currently leads April Boling in their race for the seat by 598 votes, with 6,000 provisional and absentee votes still to be counted
“Right now one of the biggest issues is public trust — the public is feeling distrustful and disenfranchised,” she said.
Councilman Tony Young said he and his colleagues should “consider everything” when it comes to shoring up the budget. However, he added that he agrees with Sanders that any talk of tax increases “should bubble up from the people,” meaning that residents, not elected officials, would have to take leadership on the issue.
Any tax measure would be met with strong opposition from Councilman-elect Carl DeMaio. “I will not only vote against tax increases, but I would lead the citywide effort to defeat any tax increase,” said the long-time proponent of privatizing government and cutting city employee benefits.
“And I will shine a big spotlight on the city’s remaining waste in the government.”
Sanders’ chief political consultant, Tom Shepard, said at a panel last week that voters simply don’t have the trust in how City Hall spends their money to give it any more.
Even Councilwoman Donna Frye, the only high-profile San Diego politician in recent memory who proposed a tax increase during an election campaign, is dubious of raising taxes right now. Especially, she said, if a proposal did not come with a plan for a significant restructuring of how city government spends money.
“I would need a commitment to some sort of holistic solution here,” said Frye, who took heaps of criticism in her mayoral bid against Sanders in 2005 for proposing a half-cent sales tax increase. “We would have to get in and get serious pension reform — reduce some of the benefits.”
All this is being said, however, as the city approaches the first year of a five-year span of record-setting projected deficits. As soon as Sanders and City Council find a way to close the current $43 million gap, they will be staring in the face of an additional projected $44 million deficit for the 2010 fiscal year. In 2011, the deficit could go as high as $96.5 million.
Erie said such a period of unprecedented austerity could knock the city’s electorate off its no-tax pedestal. “Maybe this is the great test case of producing so much pain that it forces residents to come in and ask for more revenue,” Erie said. “I don’t know.”
Independent Budget Analyst Andrea Tevlin has long warned of a “structural deficit,” meaning that the city’s revenue structure simply does not support its annual expenses. And a 2005 study by the left-leaning Center for Policy Initiatives found that San Diego raises significantly less funds on a per-capita basis from its residents than the average of California’s 10 largest cities.
Still, residents chose in 2004 to twice reject proposals to increase a hotel room tax that would primarily be shouldered by tourists.
Sanders’ tax stance has always been complicated. In his 2005 campaign, he offered disparate versions of his tax stance, eventually settling on a firm no-new-taxes platform after being hammered by opponent Steve Francis for refusing to rule out any strategy for solving the city’s financial problems.
He had this to say in October of 2005: “I’ve never taken tax increases off the table before. I don’t know what’s going to happen five years down the road. I have said, though, all along that I didn’t believe the citizens should have to pay during this period of restoring the city’s finances with the problems we have right now.”
Today, it is not entirely out of the question that an eventual push for more taxes could come from the Mayor’s Office after his June reelection, despite Sanders’ statements to the contrary. A source familiar with internal planning, who requested anonymity, said Sanders “has always contemplated some kind of tax increase after the election.”
Gov. Arnold Schwarzenegger, another moderate Republican who has won two recent elections with the help of tough stances against taxes, has been forced to change course himself. Three weeks ago the California governor proposed a temporary 1.5 cent sales tax increase to help close the state’s mid-year budget gap, which has mushroomed to $28 billion.
Please contact David Washburn directly at david.washburn@voiceofsandiego.org with your thoughts, ideas, personal stories or tips. Or set the tone of the debate with a letter to the editor.