The Morning Report
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This post has been updated.
The labor and business-backed campaign to place a hotel-tax measure on the November ballot received devastating news Wednesday: The county registrar will need to conduct a full count of signatures, a weeks-long process that could keep the measure off the ballot.
Mayor Kevin Faulconer’s team responded by urging the City Council to quickly vote to put a measure on the November ballot before the Friday deadline. The City Council is now set to vote 4 p.m. Thursday to place an identical hotel-tax measure on the November ballot.
City Clerk Liz Maland announced early Wednesday that the registrar’s random sampling of the 114,720 signatures turned in last month revealed that between 95 and 110 percent of signatures were likely to be valid. To avoid having to count and verify every single signature, the random sampling would have to project more than 110 percent of threshold were valid.
A memo from the registrar of voters, obtained by Voice of San Diego, shows the random sampling projected that the measure collected 72,713 valid signatures, more than the 71,646 needed to qualify for the ballot. If the full count reflects that projection, the measure would have what it needs to go before voters — but not until the 2020 election.
Now the registrar’s office has until Sept. 20 to conduct its count, a process that falls after this Friday’s deadline to place any measures on the November ballot.
What it means: The measure was indisputably San Diego Mayor Kevin Faulconer’s highest priority. If it is not on the November ballot, it will be an astonishing political failure and will provoke several short-term and long-term questions about the long-beleaguered effort to expand the Convention Center, funding for homeless services and general chaos consuming city leadership.
Finger-pointing will be fierce: Faulconer’s team and the leadership of the coalition of labor and business leaders that promoted the measure made several crucial decisions that now look like dangerous gambles.
Here is a list of those decisions and some of the things we’re all trying to figure out now.
The Decision to Pursue the Measure as a Citizens’ Initiative
Tax increases like this one require a vote of the people. The City Council and mayor can put up a ballot measure, or citizens who gather enough voter signatures can put one up. Last year, the California Supreme Court opened the door for an interpretation of state law that citizens’ initiatives may not fall under the California Constitution section that requires two-thirds voter approval for special taxes meant to pay for things like expansions of convention centers. If that reasoning holds up, such measures – like the convention center expansion proposal – might only need 50 percent plus one vote to pass.
The mayor, visitor industry leaders, labor leaders and others decided to test that ruling and pursue a citizens’ initiative. This required major fundraising to pay signature-gatherers.
As signature-gathering struggled, the group decided not to bail on it and let the City Council put the measure on the ballot. They instead desperately sought more funds to gather more signatures and pushed the deadline so far to where there was no time for a recount of signatures like what has just happened.
After Wednesday’s bad news, the mayor’s team decided to change course.
Now the City Council will vote on a city-led measure, a decision that ensures a two-thirds vote will be required to approve the tax increase.
The Settlement With Fifth Avenue Landing
The city also agreed to pay off a couple of guys who hold the lease to land behind the Convention Center called Fifth Avenue Landing. The city and Port agreed to give them $5.3 million as a deposit on a $33 million promise. If the measure passed, the guys would give up the land and get the full $33 million. If the measure failed, the guys would keep the $5.3 million and then pursue a hotel on the land that they’ve long wanted.
It’s unclear what happens now to that $5.3 million. It has not been officially wired over to the partners. And the city attorney has made the case that the whole deal would just fall apart if the measure failed to make the ballot. But Wednesday’s news confuses that. The measure could very easily still make the ballot – in 2020. The partners would want to begin construction of their hotel by then.
What Happens Now
The City Council had earlier rushed to schedule a Thursday meeting in hopes of voting to place the citizens’ measure on the ballot.
On Wednesday, Faulconer’s team took over and asked the City Council to vote on a city measure identical to the campaign’s initiative. Now the City Council is set to vote at 4 p.m. Thursday on whether to place that new measure on the ballot.