Council agrees to ballot measure linking tax to reforms

By City News Service

The City Council on Wednesday voted to put a measure on the November ballot asking San Diego voters to approve a temporary half-cent sales tax increase to be levied only if a set of financial and pension reform milestones are met first.

The City Council voted 6-2 during a special meeting to place the measure on the Nov. 2 ballot.

Councilmen Kevin Faulconer and Carl DeMaio cast the dissenting votes.

DeMaio labeled the sales tax increase a “bailout” for city politicians and labor unions.

“This does not end the cycle of cuts, the cycle of coming back and asking for more money from working families,” DeMaio said. “It will only perpetuate it.”

The sales tax increase, which would expire after five years, would generate about $103 million annually.

Before the tax could be levied, the city auditor would have to confirm that 10 financial and pension reform benchmarks have been completed.

Mayor Jerry Sanders testified that the revenue that would be generated from the sales tax increase is “critically important’ in closing a projected budget shortfall of $72 million next fiscal year.

“I do think the public deserves to have the right to decide what level of public service, especially public safety service, that they want,” Sanders told the council. “I also think they have the right to demand reform from us.”

The City Council’s decision to put the sales tax increase before San Diego voters came after several weeks of back-and-forth dealings, during which the idea was seemingly killed twice.

Last week, Councilwoman Donna Frye scuttled a previous attempt to put a sales tax increase before voters because it wasn’t linked to financial reforms.

Two weeks ago, Sanders, under pressure from fellow Republicans and business groups, abandoned his proposal to ask voters to approve a half-cent sales tax hike.

Frye resurrected the proposed sales tax increase by linking it to a package of financial and pension reforms, gaining Sanders’ support in the process.

If San Diego voters approve it, the city’s sales tax will go from 8.75 percent to 9.25 percent.

Brian Marvel, president of the San Diego Police Officers Association, told the City Council that without the additional revenue from a sales tax increase, sworn officers will be laid off.

“Failure to maintain priority funding for law enforcement and public safety will have direct and irreversible impact on every resident of our city,’' Marvel said.

Tony Krvaric, chairman of the San Diego County Republican Party, likened the sales tax increase to a “dash for cash” and vowed to use all his resources to fight the ballot measure.

“Rest assured, these are fig leaf reforms,” he said. “This is a dash for cash.”

The 10 benchmarks that would have to be completed before the sales-tax increase could be enacted are:

  • eliminating retirement offsets for elected officials and unrepresented city employees;
  • reaching agreement with labor unions over how to implement the voter-

approved managed competition program;

  • 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;
  • reducing retirement offset costs for city employees represented by a union;
  • lowering retiree health care costs;
  • soliciting bids to outsource the remaining information technology services;
  • creating a second-tier pension plan for firefighters; and
  • starting a lower-cost voluntary 401(k)-style pension plan for employees.