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Mayor Kevin Faulconer scrambled Wednesday to revive a flailing effort to raise hotel taxes to fund a Convention Center expansion, homeless initiatives and road repairs.
On Thursday, he’ll ask a City Council that had been set to go on summer recess to place a measure on the ballot identical to a citizens’ initiative that business and labor groups spent months and hundreds of thousands of dollars trying to get on the ballot themselves.
It’ll be a pivotal moment for Faulconer, who has made the hotel-tax measure his top priority. He’ll need five City Council votes to send the measure to the November ballot and preserve his legacy.
The effort didn’t go as planned.
A business and labor coalition earlier this year introduced the citizens’ initiative hoping to avoid a required two-thirds vote to increase hotel taxes. The decision came months after the City Council dashed the mayor’s plans to pursue a similar measure.
The mayor’s team was convinced the alliance between powerful business and labor groups would translate into success.
It also translated into lots of spending.
Campaign finance reports show the group has raised and burned through more than $1 million in donations from January through June, spending more than $824,000 on signature-gathering alone.
By mid-June, signature-gathering struggles became clear. The mayor and leaders of the initiative effort were faced with a choice to either stay the course and continue raising money to pay signature-gatherers or to ask the City Council to put the measure on the ballot itself. That latter option, however, comes with a major consequence: If the City Council puts the measure on the ballot, it will undoubtedly need two-thirds of voters to support it to pass.
That would be hard to achieve, and the other avenue is more attractive. A legal theory – made possible by a Supreme Court ruling last year – holds that citizens’ initiatives can raise taxes for a specific purpose with only a simple majority of voter support.
Faced with that decision, the team decided to continue with the citizens’ initiative this summer. Allies rallied, donating more money and even rallying their networks to personally pass around petitions.
At the last possible moment, the group turned in what its leaders said was more than enough signatures. It seemed they had averted the crisis and the reckoning with donors that would have come from not meeting the deadline and qualifying the measure.
Then came a Wednesday bombshell.
The county registrar’s random sampling of signatures the campaign turned in last month revealed the measure did not cross the state-mandated threshold to avoid a full count and evaluation of each signature. That would trigger a weeks-long review process that would run through much of September. The deadline to make the November ballot is this Friday.
The mayor’s team jumped into action on Wednesday, urging the City Council to act and making necessary tweaks to ballot language to make it a city measure. It means that the citizens’ initiative would likely be done, the donors’ losses booked and the requirement for voter support solidified at two-thirds.
By late afternoon, City Council President Myrtle Cole called a special City Council meeting.
City Councilman Chris Cate, who is on paternity leave after the birth of his daughter just a week ago, agreed to come to the meeting and City Councilman Mark Kersey, who is visiting Ohio, made plans to call in. The mayor’s office also had to plan around City Council President Pro Tem Barbara Bry’s Friday vacation plans. City Councilman Chris Ward is already gone.
In spite of the travel and hectic preparation, the mayor’s team believes it can secure the five votes necessary to send the measure to the ballot despite the last-minute panic.
“A lot of people are invested in making sure there’s a vote in November,” said Matt Awbrey, the mayor’s chief of civic and external affairs.
Awbrey claimed the mayor hadn’t been caught off guard by Wednesday’s news.
“We were prepared for all scenarios,” Awbrey said. “You always have to be in situations like this.”
The chaos surrounding both the signature-gathering effort and the rush to place the measure on the ballot could sting in November.
The decision to have the City Council place the measure on the ballot ensures a two-thirds vote will be required.
Crossing that threshold is challenging under the best circumstances.
Earlier this year, the Yes for a Better San Diego campaign hailed the labor and business alliance it said could help sell the measure to voters.
A March telephone poll of 600 likely voters obtained by Voice of San Diego showed about 61 percent support. The EMC Research poll showed about 65 percent support once those prospective voters were told hotel guests, not San Diegans, would be paying the increased tax.
That was before any opposition campaigns emerged. Now they’re brewing.
Former City Councilman Carl DeMaio is pledging to assemble a coalition to fight the measure if it makes the November ballot and homeless advocate Michael McConnell this week established a committee to oppose the measure.
Now opponents and even potential funders have another concern to point to as the campaign prepares to ramp up: the struggle to get the measure on the ballot.
The campaign blew hundreds of thousands of dollars before it ever made it on the ballot, and Faulconer himself urged many of the donors to write checks.
Sempra Energy this summer sunk $125,000 into the signature-gathering effort.
Mitch Mitchell, vice president of state governmental affairs and external affairs for Sempra subsidiary San Diego Gas & Electric, acknowledged he was initially rocked by the news on Wednesday.
After the City Council vote was scheduled, Mitchell said the company felt more confident about next steps but was anxiously awaiting more details from the mayor’s team.
“While we’re concerned about the news we heard today, we remain committed to the effort to address homelessness and we are hopeful that the mayor has a plan B that ultimately leads to a solution being approved in November,” said Mitchell.
Awbrey said the mayor will do everything in his power to ensure the measure makes the ballot and succeeds in November.
“I think San Diegans can to look to the quick action the mayor took to bring the measure before the City Council to be placed on the ballot as his strong resolve to take action on reducing homelessness, repairing more roads and expanding the Convention Center,” Awbrey said.
Disclosure: Mitch Mitchell is a member of Voice of San Diego’s board of directors.