The Morning Report
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Some San Diego businessmen brought a gift to City Councilwoman Donna Frye’s office late in the afternoon Tuesday.
It was a handwritten note from Tom Wornham, chairman of the San Diego Regional Chamber of Commerce, thanking her for her vote Monday night to oppose a sales tax increase and applauding the plan she developed Tuesday afternoon that would pair a tax increase with some cost-cutting reforms.
Wornham brought some friends with him. Cox Communications Vice President Bill Geppert, lobbyist Ben Haddad and Vince Mudd, the owner of an office interior firm. Geppert and Haddad are the top two members of Mayor Jerry Sanders’ Civic Leadership Team, a private organization of community and business heavy-hitters gathered to help push the mayor’s agenda. Mudd chaired an offshoot of that group that outlined the sorry state of the city’s finances last winter.
“We thought her ideas and reforms had some promise,” Geppert said later. “We just wanted to encourage her.”
Frye has been the lynchpin to debate in the last two days, killing a sales tax ballot measure Monday night and reviving it Tuesday morning by combining it with a set of nine cost-cutting proposals. Under Frye’s proposal a half-cent sales tax increase — estimated to raise $100 million annually — would sunset in two years unless her reform targets were met. Otherwise, the tax increase would expire in five years.
Complications to Frye’s plan are numerous. Assuming City Attorney Jan Goldsmith’s office can craft a ballot proposal that meets state law requiring propositions to have a single argument, most of the reforms in the proposal are nebulous, require negotiations with the city’s labor unions or both.
Further, City Council now has to call a special meeting if it wants to meet an Aug. 6 deadline to put items on the November ballot. Council President Ben Hueso was open to a special meeting and one is likely to be scheduled for the end of this week or early next.
Frye conceded her plan had weaknesses, but that it was the best she could put together quickly.
“It’s completely imperfect,” Frye said. “But it’s a start.”
Frye will have to convince the council’s five Democrats to back her package if it will see voters in November. The council’s two Republicans, Kevin Faulconer and Carl DeMaio, both said Tuesday they would oppose Frye’s plan. Frye sided with Faulconer and DeMaio on Monday night to oppose a straight sales tax ballot measure to the consternation of her fellow Democrats. It takes six council members to put a sales tax increase on the ballot.
DeMaio and a spokesman for Faulconer said Frye’s plan still amounted to a tax increase and there were no guarantees the reform targets she included would be met.
“This is a two-year blank check sales tax increase,” DeMaio said. “It’s probably worse than the sales tax proposal that was put before council earlier this week in that it masquerades under the guise of reform.”
Frye does appear to have locked down support from Councilwoman Marti Emerald, who said new revenues were critical and voters would want to see reforms when they passed a tax increase.
“I hope when the public sees this they’ll recognize that we’re serious about reforms, but that we need breathing room,” Emerald said. “The city absolutely needs an infusion of cash to be able to provide for basic services.”
But after getting the sales tax on the ballot, more than half of city voters will have to approve it. Already that’s causing complications. The San Diego Unified School Board appeared to clear its own tax measure off the ballot on Monday to give the city’s proposal a better chance at survival. But the school board has since reconsidered and is moving forward with its tax proposal.
Also, city voters will be asked to approve a new $294 million Civic Center in November. Emerald said the council might reconsider that decision because the two measures wouldn’t fit well on the ballot together.
“I think we need the sales tax revenue and the reforms more right now than we need a new Civic Center,” she said.
Meantime, silence continues from the Mayor’s Office, as they did not respond to requests for comment on Frye’s proposal and have offered little publicly on the sales tax debate. Geppert said his note and visit to Frye’s office shouldn’t be considered mayoral endorsement of her plan, nor the endorsement of the business community.
“It was a thoughtful and encouraging step forward,” he said.
— LIAM DILLON