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Frye proposes way to salvage sales tax measure

BY JOE BRITTON

City News Service

Councilwoman Donna Frye called Tuesday for a special meeting of the City Council to craft a November ballot measure that would link new revenues to fiscal reforms, one day after she thwarted an effort to ask voters to approve a temporary half-cent sales tax.

“What I am proposing is that we have a public discussion, a public hearing, related to (a) reform and revenue ballot measure, that would be one ballot measure that includes both a revenue discussion, specifically a sales tax, as well as reform measures,” Frye told her colleagues at the start of Tuesday’s City Council meeting.

Frye said the two-day special meeting should be held on Thursday and Friday, or Monday and Tuesday, depending on the legal requirement for noticing.

The City Council has until Aug. 6 to place a measure on the Nov. 2 ballot.

Officials with Council President Ben Hueso’s office said the meeting will likely occur Monday, but that nothing has been confirmed.

On Tuesday afternoon, Frye sent a memo to Hueso that outlines her proposal.

She proposed asking San Diego voters to approve a five-year, half-cent sales tax increase linked to various financial reforms that must be met by November 2012, or it would automatically be repealed.

The reform measures Frye proposed include eliminating terminal leave for all employees; no longer picking up a portion of employee pension contributions; bidding out remaining information technology services; implementing the voter-approved managed competition outsourcing program; establishing a new pension system for rookie firefighters; creating a 401(k)-style pension plan for new city employees and reducing retiree health care

obligations.

“Composing a package of financial reforms and new revenue is crucial to the health of our city,” Frye wrote. “We cannot achieve financial stability through only producing new revenue or only through reforms, they must be done in concert with each other.’'

The proposal came the morning after Frye declined to support a proposal to put a half-cent sales tax increase before San Diego voters in November unless it was attached to a comprehensive plan to solve the city’s ongoing budget problems.

The City Council needs six votes to put a measure on the ballot.

Frye’s dissenting vote, along with those of Councilmen Kevin Faulconer and Carl DeMaio, scuttled the effort by Hueso to put a sales tax increase before San Diego voters.

Frye’s dissenting vote, along with those of Councilmen Kevin Faulconer

and Carl DeMaio, scuttled the effort by Hueso to put a sales tax increase

before San Diego voters.

DeMaio issued a statement late today reaffirming his opposition.

“I am opposed to this latest sales tax proposal because it is essentially a blank check for city politicians to use for two years,’' DeMaio said. “There are absolutely no provisions in this proposal for holding city leaders accountable for actually implementing any fiscal reforms.”

A half-cent sales tax increase would have generated $103 million annually.

Supporters, including the police and fire unions, argued the money is needed to prevent the further deterioration of city services, particularly public safety. Opponents maintained that the city should continue to pursue fiscal and pension reforms rather than raise taxes.

San Diego faces a budget deficit next fiscal year of $72 million to $80 million.

This fiscal year, the city was forced to slash $179 million from its budget, resulting in “brownouts” of fire engines, cuts to the police department, the elimination of hundreds of positions and reduced library hours.

City officials have cautioned that with no new sources of revenue, further cuts are inevitable.

Had the City Council agreed to put the proposal on the ballot, and San Diego voters approved it, the city’s sales tax would have gone from 8.75 percent to 9.25 percent.