The Morning Report
Get the news and information you need to take on the day.
As you may have noticed, I’ve been away.
I was invited to speak at the Online News Association annual conference in San Francisco by both J-Lab (out of American University) and the ONA team. So my wife and I turned it into a vacation: Driving up the coast, eating well in San Luis Obispo, camping in Big Sur and generally getting to know each other again after a busy year.
I’m back now, trying to catch up.
As I read through the mountains of e-mails and stories I missed, I have been gathering a few notes I thought I’d pass along.
So let’s get right into it:
- First up: I caught up enough to appear on Editor’s Roundtable on Friday. We talked about the city’s financial crisis, the absurdly confusing situation regarding medical marijuana and the state’s overcrowded prisons.
- On the city’s massive budget deficit, let’s review a few facts.
Yes, this is a bad one. It’s going to be extremely difficult for the City Council and mayor to cut $179 million to $200 million or more. I do not envy them.
But there are some things to keep in mind here and some other things to watch:
I. Do not let anyone tell you this is a huge unexpected surprise and that the city is an innocent victim of a brutal worldwide economy.
The city has a structural deficit. This means it is not set up to collect as much money as it is set up to spend.
In early 2008, Independent Budget Analyst Andrea Tevlin identified this and articulated it as the source of major budget deficits that we’d seen from 2004 until then. Remember, this was a period of relative prosperity for San Diego and the nation.
If we experienced these kinds of deficits during good times, it should not be a shock to anyone that we’d have a massive, eye-popping shortfall when the economy slowed down even just a little bit.
In fact, this is the problem. The only way we got through those years — booming economy and all — was with one-time revenue sources. These are the kinds of one-time solutions that could have been used to bridge the gap between the implementation of long-term structural changes and the actual benefit of those long-term structural changes.
But only a few at City Hall have wanted to face the reality Tevlin did. And they are not the ones who are now saying we’ve been surprised and victimized by this economic calamity.
II. Looking forward, what should we watch for? It’s very encouraging to see the new City Council react right now. A budget need not be implemented until June of next year. It’s still October. Yet you see Kevin Faulconer, Tony Young and Todd Gloria gathering public opinion now and talking about their own priorities. You see Donna Frye and Carl DeMaio trying to position the city to do all it can to reduce the burden of retirement benefits the city offered but never, apparently, planned on funding.
But how will they break? Will Gloria and Frye again support a tough stance with the city’s employees and further request compensation concessions? Will Faulconer, DeMaio and the mayor, for once, indicate what they need to happen to enable them to discuss supporting tax increases? “No” is not going to get us anywhere.
The City Council, this year, is basically in charge of negotiations with the city’s unions. The city attorney made this the case last year when, to the chagrin of the mayor and others, he declared that the City Council basically had the right to come to an agreement with unions rather than simply accept or reject the deal they made with the mayor.
- On medical marijuana: Look, it’s obvious that marijuana does have medical benefits. But the law that allows its use for sick patients is terribly vague and confusing and it is being used by those who don’t think pot should be illegal at all. Now, whether they’re sick or not, thousands of people who just want marijuana are using this law. And an entire economy is growing up with these providers accommodating them.
This is not healthy. The laws are absurdly confusing and I sympathize with local officials who are charged with somehow enforcing them.
Supporters of legalization should redirect their fury from those local officials and toward the decision makers at the state and federal level who can make marijuana legal once and for all. The fact is, if pot were treated like alcohol and tobacco, it would be much easier to both regulate and, drumroll, tax. Right now we have the untenable situation where something is legal but nobody knows how to zone dispensaries, determine whether someone is “profiting” from the drug or properly collect fees and taxes on it.
For now, the city and its mayor need to take a decisive step toward providing zoning, commercial and permitting regulations that make it clear where and how medical marijuana facilities can coexist with neighborhoods. Someone needs to provide clarity until the law can be changed so that users of marijuana no longer need to pretend as though they are either criminals or patients.
- Finally, I came across this Q&A with Mayor Jerry Sanders in the Union-Tribune the other day.
In it Sanders says this:
What you say about the critique from Councilman Carl DeMaio and others that your continued interest in things like the Convention Center expansion and a new city hall is very inappropriate in a time when money is so scarce?
Well, we could stop everything we’re doing, but that doesn’t make sense or serve the public. Mr. DeMaio understands perfectly as well, as do the other council members, that we’re not using general fund money for those things. On the main library, for example, we have $150 million of the $185 million we need, none of it general fund money. People are not going to have to make a decision between cops, other libraries in the system, firefighters or anything else for that library. That comes from sources that can only be used for that. So do they want us to give that back? Give back $50 million to donors? And $80 million in redevelopment money that can only be used downtown? And the $20 million library grant? And the $20 million that is from the school district so that they can have two floors in the building for a high school? So we just decide we don’t want to do it, and we give the state back $20 million and we give the school district back $20 million and they don’t get a high school there? That makes no sense at all. We should take an opportunity to get that done, especially at a time when we need to create jobs and especially at a time when the costs of construction are taking a nose dive.
Very interesting to watch him embrace more and more the argument that the new main library is needed to create jobs during its construction and to provide for a school. The Union-Tribune editorial page has similarly ventured into this territory. Interesting to watch these conservatives embrace that argument to justify public spending.
But Sanders’ answer raises another question:
The mayor says there that library supporters have raised $50 million from local philanthropists for construction. Howzat? The library boosters will only disclose the sources of up $3 million. Then they said they’ve gotten pledges of up to $33 million. Now the mayor is claiming they have raised $50 million?
In July, Jay Hill, the executive director of the library foundation raising money for the project, declared on the radio that the foundation had raised $37 million.
When I asked him from whom the pledges had come, Hill said it was a secret:
Well, you know, we have donors that are — want to be private but they’ve come forward with pledge agreements and, you know, we’ve shared that information with elected officials and, you know, also offered to share it with the state.
The argument that there is $50 million of private funds ready to support the library is a good one only if it’s true. And that’s hard to verify when the number keeps changing and they, well, refuse to verify it.
Anyway, I’m sure we’ll figure all of these things out soon. Here’s to a good start.