At KNSJ Mayoral Forum, candidates unwilling to discuss raising city revenues.
By Andy Cohen
Last night I had the opportunity to represent the San Diego Free Press as a panelist in the KNSJ mayoral debate, hosted by the California Western School of Law. We were privileged to have three of the four major candidates for mayor participate, with Nathan Fletcher the only missing candidate.
This event had been in the works for months, with the upstart progressive radio station looking to put itself on San Diego’s political map, once again giving those on the more liberal side of the political spectrum a reason to listen to talk radio in San Diego, something we haven’t had since Clear Channel switched KLSD to an all sports format. Apparently they didn’t like the competition to their right wing property, KOGO.
In the debates leading up to this one, in my opinion not nearly enough has been discussed regarding the philosophy behind economic growth and development by the candidates thus far. And the candidates have not been asked to address how they would fund all of the different services that city government is supposed to provide, and all of the so called “goodies” that San Diegans have come to expect from their local government.
Last week an acquaintance of mine tweeted out something I’m sure we’ve all heard before, but in light of this special mayoral election, has become somewhat more prescient:
problem with San diegans is we all want this idealistic place but are not willing to pay for it. Lower taxes than most major cities
— Greg Block (@blockgreg) November 6, 2013
Along with it he posted a link to a UT-San Diego story published in 2010 in the wake of the defeat of Prop D, the proposed .5% sales tax increase for San Diego. Their research found that San Diego lags far behind the other major cities in California in terms of revenue generated. For example, in annual business taxes, San Francisco collects an average of $5,253 per year per business. Los Angeles collects $1,283. Oakland $774. San Jose $225.
Here in San Diego, our city government was found to collect a mere $79 per year per business. Other cities collect a whole host of fees that San Diego does not. San Francisco, Anaheim, and Los Angeles all charge higher Transient Occupancy Taxes than San Diego does (two separate ballot initiatives to raise the TOT in 2004 failed, despite winning an overwhelming majority of the vote. A two-thirds majority was required for it to pass), although the TMD thinks it has found a way to somewhat circumvent that little inconvenience, for better or worse.
In annual per capita revenue, San Diego lags well behind other major California cities.
In sales taxes—a city’s primary source of revenue other than property taxes—San Diego falls well short of other cities, something Prop D was seeking to rectify. The state sales tax in California is 7.5%. Cities have the option of adding additional sales taxes that it can keep on top of that. According to the State Board of Equalization, San Jose adds an additional .75%; Los Angeles 1.5%; Long Beach 1.5%; Sacramento 1%; San Francisco 1.25%. Even in Fresno—not exactly a liberal bastion in Central California—they add an additional .7225% to the state sales tax rate.
Close to home in more conservative San Diego County, National City adds 1.5%, La Mesa 1.25%, and Vista, home of arch conservative Congressman Darrell Issa, they collect an additional 1% in sales taxes. In the City of San Diego, we collect .5%. Prop D would have raised it to 1%.
Think of it in these terms: Actual sales tax revenues for the City of San Diego in Fiscal Year 2012 was $220.3 million. Had Prop D passed, that number would have been doubled. That would pay for a lot of things that San Diego needs and wants. So the question posed to the candidates was whether they would consider raising some of these taxes and fees as mayor?
According to Mike Aguirre, the city government cannot be trusted to direct its resources to where they’re needed. He says no, he would not support raising taxes and fees because we cannot control where the money goes. “If you raise taxes, it’s not going to go to (police, fire, other city services). The taxes are going to go to where the people who are in control of the government want them to go. They are controlling the election…do you think those people who are paying the million dollars to send you all those mailers because they want to make sure there’s more libraries and rec centers open?” He then went on to rant about pensions—something Mr. Aguirre has on a feedback loop, yet he has never once told us what he would do about San Diego’s pension problem. Presumably he would prefer to revert to underfunding the system again, but we don’t really know.
So that’s a “no” from Mike Aguirre, because we cannot trust the people “in control of the government,” despite the fact that as a “strong mayor,” he would presumably have some significant measure of control over our government. Angry Mike made his triumphant return to the stage.
David Alvarez agrees that there are some fees that are appropriate, and that it’s the government’s responsibility to ensure that the money is going toward its appropriate purpose. But no specific answer to the question of modestly raising the business or sales tax.
“I was a strong opponent of Prop D,” said Kevin Faulconer. “It’s not about sending more money to City Hall, it’s about City Hall doing a better job with the money that it already has.”
That’s all well and good, and Mr. Faulconer is correct that the city should ensure that it is managing its resources properly and efficiently. However, one of his major campaign points is to solve the San Diego Police Department’s massive officer retention problem. Due to scarce resources, the SDPD is struggling to retain the officers it has, and it cannot afford to train and hire replacements for the officers it has lost. Faulconer wants to reverse that problem, but never quite tells us where he will get the funding from.
San Diegans love for their government to provide all kinds of things for them, such as free parking at the beach, free residential trash pick-up, and adequate police and fire department protection and response times. But San Diegans have also been very reluctant to provide adequate funding for those services we demand. Even something as innocuous as fire pits at San Diego’s beaches have been threatened—something near and dear to Faulconer’s District 2 contituents—until private donors stepped forward to prevent them from being removed, and thus saving a local cultural icon. The fire pits have since been put back into the city’s budget, but for how long?
A couple of points here: Keeping taxes low sounds great and reasonable in the abstract. But governments still need to find funding for the basic services they are mandated to provide. Without taxes, governments often turn to fees as a funding source: Trash collection fees; sewage treatment fees; building and construction permit fees; parking fees. Individuals and businesses end up getting nickel and dimed to death with fees, all in the name of keeping taxes low. That’s not necessarily fair, or right. By spreading out the “pain” more evenly through modest sales and business tax increases, we would be able to reduce or even eliminate some of those fees (but certainly not all) without doing any real harm to the average person’s pocket book.
With the potential additional hundreds of millions of dollars in revenue, San Diego could continue to provide free residential trash pick-up, leave the beach fire pits in place, continue providing free parking at city beaches and parks, and be able to find the money to rebuild the police department, build much needed new fire stations, and reduce fire department response times in areas where they are woefully inadequate. The city could hire additional lifeguards and provide them with the equipment they need to keep our beaches safe—our beaches are, after all, a crucial source of tourism revenue. We might even be able to fund some of the infrastructure improvements this city so desperately needs.
Are consumers really going to stop shopping at Target if the city sales tax were increased, by, say, a quarter of a percent, costing them an extra 2.5 cents for every $10 spent? Are businesses going to go bankrupt if their local business taxes were raised to, say, $279 per year instead of the current pittance? What is received in return would seem to be well worth the small increase.
Our city government should be able to manage its money effectively. But that doesn’t mean that we shouldn’t provide the city the resources it needs to offer the services we demand.
Finally, Memo to Mike Aguirre: Please stop talking about pensions. Particularly if you continue to fail to offer a solution to the problem. Any solution. San Diego has an obligation to pay down the mess created by City Councils and mayors past. There’s simply no way around that inconvenient fact
Correction: Mathematics is apparently not my strongest suit. A quarter cent tax increase would amount to $.025 per every $10 spent, not $.25 as previously noted. An even stronger argument in favor of raising the sales tax.