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Statement: “No general fund,” Steve Cushman, the mayor’s Convention Center point man, said Nov. 29.

Determination: Huckster Propaganda

Analysis: A constant theme of debate in San Diego focuses on using the city’s day-to-day budget to fund big building projects. Can the city afford new buildings when its own cash crunch has degraded core services like police and libraries?

When pushing projects like a new downtown library or an expanded Convention Center, boosters like to stress that their proposals won’t touch the general fund. It’s an important credential to show the projects won’t negatively impact city services.

It’s almost always a heated battle. Every dollar spent from the general fund is a dollar taken from core services. When a citizen’s task force first examined a new Chargers stadium, for example, it pushed for no cost to the general fund.

Convention Center boosters originally hoped to avoid the general fund, saying their $520 million expansion of the waterfront facility wouldn’t tap the city’s day-to-day budget. They hoped to get funding from new tourist money, the port and downtown redevelopment.

But that plan didn’t materialize. Convention Center boosters, led by Mayor Jerry Sanders, said they needed $90 million from the city over three decades and then hiked their request to $105 million one month later.

If anyone knew about the funding shift, it would’ve been Steve Cushman. Sanders tapped the local power broker and former port commissioner to create the expansion’s financing plan.

Approaching a crucial City Council vote on the Convention Center expansion, Sanders organized a public-access TV special with Cushman to talk about the project and other city affairs. At one point, the moderator, KGTV anchor Hal Clement, asked Cushman to explain the project’s financing plan.

Cushman responded: “The good news is the visitors are going to pay for it. The folks who are going to use it are going to pay for it, not the citizens of San Diego.”

Cushman then said the hotels would contribute through a visitor tax, the port had tentatively agreed to pay $60 million, and the issue would go before the City Council for approval. Clement specifically asked Cushman whether the financing package would include general fund money — the operating budget that pays for the city’s core services.

Cushman replied, “No general fund.”

That’s not true. Boosters want $105 million.

In an interview Friday, Cushman defended his response on the TV special. He said “everybody’s definitions are different” of the general fund. And he argued the expansion would bring in new money for the city — more than enough to absorb the project’s estimated costs.

A city consultant says the expansion will generate roughly $13 million in additional tax revenue each year. Though the project would cost the general fund $3.5 million annually, Cushman argues the budget would still see a net increase of $9.5 million.

But that doesn’t mean the financing package doesn’t include general fund money. At the very least, the proposal would siphon $105 million in revenue that would otherwise flow into the same pot of money that pays for police, firefighters, parks and libraries.

If the projected revenues don’t materialize, city financial officials warn, San Diego would also be left on the hook to still pay for the project. The Convention Center expansion would cut into the general fund.

Our definition for Huckster Propaganda says the statement is inaccurate and it’s reasonable to expect the person making it knew that and made the claim anyway to gain an advantage. We found it fits Cushman’s statement.

Contrary to his claim, the Convention Center financing plan calls for $105 million from the city’s general fund. It’s reasonable to expect Cushman knew that because he created the plan.

And Cushman achieved better footing in public debate by making the inaccurate claim. By downplaying the project’s cost to taxpayers, Cushman dodged criticism of providing subsidies to private business as the city faces its own financial challenges. It’s the same criticism boosters originally hoped to avoid.

If you disagree with our determination or analysis, please express your thoughts in the comments section of this blog post. Explain your reasoning.

Keegan Kyle is a news reporter for voiceofsandiego.org. He writes about public safety and handles the Fact Check Blog. What should he write about next?

Please contact him directly at keegan.kyle@voiceofsandiego.org or 619.550.5668. You can also find him on Twitter (@keegankyle) and Facebook.

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