Half-cent sales tax incease likely to be on ballot

City News Service
The City Council agreed in principle Friday to ask San Diego voters to approve a temporary half-cent sales tax increase that would be levied only if nearly a dozen financial reform milestones are met.

The City Council voted 6-2 to direct City Attorney Jan Goldsmith to draft the ballot language and conduct a legal analysis.

Councilman Carl DeMaio and Kevin Faulconer cast the opposing votes.

A special meeting was scheduled for Monday morning, when the City Council will formalize the measure for the Nov. 2 ballot.

The ballot measure will ask San Diegans to approve a five-year, half-cent sales tax increase linked to various financial reforms that must be met before it can take effect.

If it is approved by voters, the sales tax increase would generate about $103 million annually.

The determination of whether the benchmarks have been met would be made by a panel of three retired Superior Court judges or the city auditor.

The proposal was advanced by council members Donna Frye and Todd Gloria. Frye killed an attempt earlier this week to put a sales-tax increase before voters because it wasn’t linked to financial reforms.

“We believe that this measure before us is the most comprehensive and the best way to make sure the city gets back on financial health,” Frye said.

Shortly before Friday’s meeting began, Mayor Jerry Sanders issued a memo stating that he would not veto the ballot measure if it is approved with the accompanying financial reforms.

“The provisions proposed in the Reform Before Revenue Ballot Measure proposal constitute major concessions that, in my opinion, for the first time justify placement of such a measure on the ballot,” Sanders’ memo states.

DeMaio likened the measure to a “dash for cash.”

“There are zero requirements for actual reform in this measure,” he said.

DeMaio said the City Council has no credibility with San Diego taxpayers, who won’t support a tax increase. DeMaio said he will commit his own personal funds to fighting the ballot measure.

“You have run the clock and now you have run out of money and you are asking them to bail you out,” he said.

The 11 benchmarks that would have to be completed before the sales-tax increase could be enacted are:

- ending a benefit that picks up a portion of pension contributions for elected officials and unrepresented employees;

- reaching agreement with labor unions over how to conduct the voter-approved managed competition program, which allows private companies to compete for work now performed by city employees;

- completing a cost neutrality study of the Deferred Retirement Option Program, or DROP, benefit;

- soliciting bids for the outsourcing of the Miramar Landfill;

- eliminating terminal leave for all city employees;

- beginning the implementation of managed competition;

- reducing city pension pick up costs for employees;

- lowering retiree health care costs;

- bidding out the remaining information technology services;

- creating a second-tier pension plan for firefighters; and

- starting a voluntary 401(k)-style pension plan for employees.

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