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Convention Center Ruling Reinforces Private Tax Scheme

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Props 13 and 218 necessitate convoluted scheme to effectively privatize public assets

The privatization of public resources took another step toward reality yesterday, although in this particular case it may not be a terrible thing. In a tentative ruling, Judge Ronald Prager determined that the unusual taxation method being used to finance the $520 million expansion of the San Diego Convention Center is perfectly legal, giving the project the green light.

The San Diego hotel interests and the City Council decided that they wanted the expansion project to happen, and they didn’t think they could get the 2/3 vote of the public in order to raise the TOT (a logic that might also be applied to the TMD, but more on that in another post). Instead, they used a provision in Prop 218 that allows local property owners to choose to tax themselves without a public vote.   [Read more…]

Judge Tentatively Rules in Favor of Convention Center Expansion Project

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San Diego Convention Center Expansion Project back on schedule to begin construction in 2014, with 2017 completion date.

In a ruling issued today, judge Ronald Prager ruled that the funding mechanism for the Convention Center Facilities District that was set up to fund the $520 million Convention Center expansion project is legal and the project can proceed as planned.

At issue was whether the hoteliers could legally vote to essentially raise taxes that they charge on hotel guests outside of the city’s existing transient occupancy tax, which currently sits at 10.5%. Two separate attempts in 2004 to raise the TOT both failed, despite the 2004 measure earning nearly 62% approval of the voters. State law at the time required that any measure proposing to raise taxes of any kind required the approval of a full two-thirds of the voters in order to become law. The second ballot measure in November 2004 earned over 58% approval of the voters.   [Read more…]

Tourism Marketing District Could Be Made Subject to Living Wage Ordinance

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Obstinance of San Diego City Council and big hotel interests stymieing TMD deal, tourism ad campaigns.

The Bob Filner era in San Diego is only in its infancy stages, but it has certainly not disappointed in the fireworks department. The sometimes brash yet affable new mayor has left no doubt that there’s a new sheriff in town, and the old wink-wink nudge-nudge ways of doing business Downtown have come to an end. Filner made his disdain for the “downtown special interests” a major focal point in his campaign, and thus far he’s held true to his word.

The most recent big controversy at City Hall—until yesterday, that is—was Filner’s refusal sign, and thus finalize, a contract drafted during the Sanders administration to provide the Tourism Marketing District $30 million per year for the next 39 years, ostensibly for the purpose of promoting San Diego as a major tourism destination in various media markets around the country. The agreement calls for levying an additional assessment on hotel guests on top of the transient occupancy tax that even San Diego City Attorney Jan Goldsmith calls legally dubious (he says it’s in a “legal gray area”).   [Read more…]

San Diego and the TMD

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It’s time for the San Diego City Council to work within the law instead of desperately searching for ways around it.

Can’t we all just get along?—Rodney King

Yesterday the San Diego City Council heard comments on the city’s Tourism and Marketing District. You might have heard about it in recent weeks, because it’s been the source of a lot of controversy down at City Hall.

The TMD became a major news item last week when Mayor Bob Filner crashed a news conference called by City Attorney Jan Goldsmith. Let’s just say that the two men don’t agree on a whole lot, and the exchange was one of the more entertaining political back and forth’s in San Diego history.   [Read more…]

Congress’ Sequester Carries Dire Consequences for San Diego Innovation Economy

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Cuts to government funding for basic research–already at dangerously low levels–could have devastating long term economic effects nationally, locally

Basic research—the very foundation of the research cluster—depends heavily on federal dollars. Without it, research activity will slow to a crawl and could eventually wither away.

According to information distributed by Congressman Peters’ office, the sequestration (or amputation) threatens to cut $2.5 billion from the National Institute of Health’s budget (8.2%). To put that in local terms: In fiscal year 2012, San Diego research groups benefitted from 1,760 grants totaling more than $130 million from the National Science Foundation and $850 million from the NIH.

Nationally, cuts to research funding could mean that 2,300 fewer grants will be funded, costing 33,000 jobs. Locally, 4,500 research jobs could be lost, and according to Mark Cafferty, the president and CEO of the San Diego Regional Economic Development Corporation, “the loss of a higher wage, high tech job in this region means the loss of another job.” That’s 9,000 jobs in just the research cluster alone.   [Read more…]

Peters Focuses Consequences of Sequester on San Diego

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Sequestration deal agreed to in 2011 could have devastating effects on the San Diego economy.

Representative Scott Peters is back home in San Diego. A rather irritated Scott Peters. “I love being here in San Diego, and by the way it’s 20 some degrees in Washington, D.C. This is a nice place to be. But I really ought to be at work as we get two weeks away from the sequester,” he said, expressing his frustration that the Republican leadership in the House had declared a recess for this week.

As of March 1st, the sequestration deal that was struck at the end of 2011 between President Obama and the Republicans will kick in—a deal that was never intended to be actually implemented.

Back in December, 2011, the federal government was coming up against the debt ceiling. It’s usually a routine matter to raise it in order to allow the government to borrow money in order to meet its financial obligations. It’s important to note that we’re not talking about borrowing for new spending, but to repay debts already incurred.   [Read more…]

PERB Smacks Down Prop B: Pension Reform Initiative Ruling Explained

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To the surprise of……well, no one, really, Prop B was deemed illegal according to state law by an administrative law judge in a ruling released Tuesday evening, essentially invalidating Prop B.

The City, of course, intends to appeal the ruling.

The crux of the case is this: Proponents of Prop B insist that it was a “citizens initiative,” since it was put on the ballot after a petition drive that gathered over 115,000 signatures to get the measure on the ballot. Therefore it reflects the will of the people and should not be overturned. Opponents of Prop B noted that according to state law workers rights cannot be put to a vote via ballot initiative……in a nutshell.   [Read more…]

The Predictable Demise of the Plaza de Panama Plan

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The San Diego City Council arrogantly and knowingly ignored its own laws in supporting the planned Balboa Park renovation.

Last week Judge Timothy Taylor ruled that the proposed Balboa Park redevelopment plan put forward by the Irwin Jacobs sponsored Plaza de Panama Committee violated city law and could not move forward. The controversial plan to remove parking and vehicular traffic altogether from the Central Mesa of Balboa Park, build the Centennial Bridge that would circumvent the museums around to the south as an offshoot of the historic Cabrillo Bridge, and build a three story paid parking structure to the south of the Organ Pavilion, would have cost a projected $45 million, with $25 million being donated by Dr. Jacobs himself.

The plan was highly suspect from the very beginning, and tensions on both sides ran rather high. Shortly after the City Council voted to approve the plan, I wrote a piece explaining how the plan could very well be found illegal, laying out the several ways that the plan was legally flawed.

Turns out that Judge Taylor agreed, at least in part, reaching “the reluctant conclusion” that in approving the Plaza de Panama plan, the City did in fact violate city law. In order to approve the project, city law clearly states that the City Council must find that there is “no beneficial use” for the property; that without the Jacobs plan, Balboa Park would be useless to the public, the entity for whom the park exists.   [Read more…]

In Defying Anti-Tax Orthodoxy, California Voters and Schools Are Rewarded With Projected Budget Turnaround

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After years of devastating funding cuts, California schools begin to get much needed relief.

California’s newfound budget security was made possible because last November, in what must have come as a complete shock to Republicans, California voters approved a plan—Prop 30—to raise taxes slightly on the wealthiest Californians in addition to temporarily raising the state sales tax, effectively spreading the pain to all Californians. This was a slap in the face to Republican orthodoxy, since the only acceptable thing to do with taxes is to cut them, if not eliminate them altogether.

When Gov. Brown released his budget proposal last month, the state’s legislative analyst concluded that California would still run a deficit of $1.9 billion for FY 2013 instead of the $25 billion of just a couple of years ago, but that if things continued on the same trajectory the state could be running significant budget surpluses in the following five years.   [Read more…]

With a New Captain, San Diego Democrats Forge Ahead Into New Era

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Francine Busby takes the helm of the San Diego Democratic Party after eight years of solid growth under Jess Durfee.

The San Diego Democratic Party enters a new era following the 2012 elections, and for the first time in nearly nine years the party will have a new leader. Jess Durfee announced in December that he would be stepping down as the Party’s Chairman, opening the door for a new authority to step forward.

That new leadership emerged in the form of a familiar name to San Diego area Democrats: Francine Busby, the former challenger for the 50th District Congressional seat held at the time by Brian Bilbray.

“I felt it was time to bring new ideas into the Party and to continue to evolve as the electorate evolves,” said Durfee. Busby, he said “is the best possible successor to take over for me.”

Ten Years ago there was no Party infrastructure, and Republicans held a 90 thousand voter advantage in registered voters and four out of five Congressional seats. Today Democrats have a 20 thousand voter advantage and hold three out of five Congressional seats. It’s been a long, hard slog, and Busby’s goal now is to continue that growth through new ideas.   [Read more…]

California Budget Outlook Brightens Considerably, Despite Laments of Phil Mickelson

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Professional golfer cites California tax policy as cause for dire outlook for his personal finances despite tens of millions in earnings.

A Monday story in the UT-San Diego told an interesting tale of the hardships faced by professional athletes living in California. These poor guys just don’t make enough money to survive, it seems, because the state and federal governments are taxing them to death!

I kid, of course, but apparently the passage of Prop 30 in last November’s election is enough to make some of California’s wealthier residents consider looking for someplace else to call home. Phil Mickelson, one of the world’s top professional golfers and a San Diego native—and local hero the stature of Tony Gwynn and the late Junior Seau—lamented in a press gaggle at a tournament in Palm Springs over the weekend that he was going to have to make some “drastic changes” in his lifestyle because of the way his rate of taxation is going up. He even decided to drop his bid to become part of the ownership group that recently purchased the San Diego Padres.

But revenues in the State of California had to be increased, and the voters spoke loud and clear when they decided to not only raise the marginal tax rates on the wealthiest state residents, but to raise the state sales tax, effectively spreading the pain to EVERYONE in the state, among other measures.   [Read more…]

Filner Throws Cold Water Over San Diego Budget Surplus Expectations

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Mayor Sanders’ $12 million budget surplus projection did not account for looming realities.

Last year Jerry Sanders stood in front of the cameras and gave us a bit of great news: After years of crippling budget deficits, the City of San Diego would be running a $12 million budget surplus in 2014. Our problems are solved! All Hail Jerry Sanders, the savior of San Diego!

Filner, on Tuesday night, took the wind right out of those sails. He said those projected budget surpluses could actually be as much as a $40 million budget deficit, despite all of the austerity measures enacted during the Sanders administration.

Yeah, sure, we’ve heard all this before from Filner. But this was different. This was no longer a campaign talking point or rhetoric. He’s now the mayor, and this was the State of the City Address. This was for real.

Although he never mentioned Sanders by name, he accused his predecessor of some shady accounting tricks in order to protect his mayoral legacy; of fudging the numbers so that he could say he left behind the first budget surplus in recent memory. Filner accused Sanders of deliberately misleading San Diego taxpayers.   [Read more…]

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