Politics Report: All the Eyes on Sales Taxes

Labor union leaders and climate change activists were glowing this week when they got the news that their initiative to raise the sales tax by half a cent got enough signatures to go on the November ballot.

It would be a countywide sales tax increase to fund the regional transportation plan SANDAG is currently redoing. It’s mostly the same team that swung and missed on a similar effort two years ago. And while they were elated, the measure will provoke some harsh rhetoric in opposition and it certainly doesn’t help the still unannounced effort underway at San Diego City Hall to put a full 1-cent sales tax increase on the same ballot.

Background: The base sales tax rate in San Diego County is 7.75 percent, which includes 0.5 percentage points that funds transportation projects at SANDAG, known as TransNet. But several cities have increased sales taxes themselves above that. Del Mar has an 8.75 percent rate as does Solana Beach, Imperial Beach, National City and Chula Vista.

SANDAG’s 40-year plan for transportation projects in the region assumes the county will pass not just one additional half-cent increase but two or even three. The uncertainty comes from the other major assumption SANDAG made about where it would get its money to fund all the transit and highway projects it envisioned: the road user charge. The driving fee was not legal and was highly controversial and now the board has officially moved to remove it from the plan.

But that means the reliance on sales tax measures would only grow absent some undiscussed source of revenue.

The promises: Get ready to hear a lot about building the (expensive) trolley connection to the airport, funding the tunnel to keep the rail connection between San Diego and Los Angeles viable along the bluffs in Del Mar and road repair. Lots of road repair. They know that will resonate with the public and they plan to really emphasize how 7 percent of the revenue will be dedicated to grants to cities to fund things like repair of roads.

The opposition will be in full force but it’s not clear how organized it will get or how much money it may raise to stop it.

Gretchen Newsom, the lead spokesperson of the campaign and political director for this region for the International Brotherhood of Electrical Workers (IBEW) said even though its unclear exactly what will be in the next regional transportation plan it will have things the initiative plans to fund.

“People want a connection to the airport, they want to keep the LOS-SAN rail corridor viable, they want to fix the roads and all those major infrastructure projects will move forward with this initiative,” she said.

Half the money would go to transit improvements like the connection to the airport and 27 percent would go to highlight projects with 12 percent of the funding going to operations of existing transit – like making buses and trolleys serve their areas more frequently.

“The campaign to pass the initiative will undoubtedly focus on ‘relieving traffic congestion’ when in fact most of the funds will be spent on projects used by just a fraction of commuters,” wrote Coronado Mayor Richard Bailey on X.

But … Will It Mess with the Mayor?

My first question was how the measure would impact the push from San Diego City Councilmember Raul Campillo and Mayor Todd Gloria to raise the city’s tax from 7.75 percent to 8.75 percent. They had been planning to put the measure on the November ballot as well as a general tax increase without explicit promises of where the money would go. That would make it something voters could pass with a simple majority vote.

One common claim people around politics make is that if you have multiple tax increases on the ballot, then they will hurt each other. Typically in moments like this, there is some behind-the-scenes dealmaking about whose measure gets to go forward or not.

The city is facing a budget deficit projected to grow worse and worse every year even though the economy hasn’t slipped into recession as many people worried it would.

Michael Zucchet, the general manager of the largest union of city employees, the Muncipal Employees Association told me that he doesn’t buy the old wisdom that two tax measures hurt each other.

“The notion that multiple revenue measures on the same ballot hurt each other is an overrated/not-supported-with-data theory, in my opinion. And the dynamics that might play out could cut either way for the city measure,” he said.

Newsom said she kept the mayor’s team and anyone who cared updated about their progress and nobody should be surprised the initiative to increase sales taxes across the county passed.

“We have the support of the mayor himself – he’s told me directly to my face that we have his support. We’re all in it together to fix infrastructure in this community and provide freedom of choice of how they get around the region,” she said.

It may not be up to the mayor: I can’t tell for sure but it seems like the votes are there on the City Council to put the measure on the ballot, especially if Henry Foster replaces Monica Montgomery Steppe. He told me recently he was a strong supporter of the tax increase.

If the mayor decided not to support the measure, he may have to find the votes on Council to kill it.

But I don’t know either way how it will turn out. Stay tuned.

Kent Lee (Probably) Supports It

The Union-Tribune’s David Garrick wrote this week about how the newest member of the City Council, Kent Lee, has now gotten two of its top jobs. He’s the chair of the Land Use and Housing Committee and the chair of the Budget Committee.

Here are the committee assignments that were delayed after the four Councilmembers opposed to re-electing Council President Sean Elo-Rivera blasted the way he had handed out those jobs before.

With the budget looking dire, running the budget committee is not exactly a fun job. But Lee hired Katherine Johnston, who did policy and budgets for former Mayor Kevin Faulconer for years and other top aides, like Makana Rowan, who served former Council president Jen Campbell, precisely so he could take roles like this someday.

“The city’s entering a pretty challenging period from a budgetary perspective. I have had folks comment they were surprised I was even interested in the job,” he said.

So how about the city’s budget. Would a tax increase help?

“We’ve been fortunate to have so much Covid relief funding but it masked the structural budget challenges we have. We’re seeing the reality hit. We’ve got to make some tough decisions,” he said.

And yeah, maybe a tax increase. Though he said he didn’t want to get ahead of the proposal and hasn’t seen it.

“The city does not put enough money toward street repair. Street condition is just kind of the most obvious example people can see — a result of lack of consistent capital investment. The same theme hits on every major issue the city has. We have not kept up with staffing and that put us behind for some time. There are countless examples of how the city has struggled with resources,” he said.

Notes

World Design Capital 2024 trouble: Sometimes news is not surprising but still shocking. This week, Sandra Dibble broke the news that the board of the nonprofit World Design Capital San Diego Tijuana 2024 fired its CEO Carlos de la Mora. I have never been able to understand what the World Design Capital distinction actually meant, what it would be for 2024 so I was relieved to read this quote from one of its advisory board members: “It’s a great event, but people might initially have an issue understanding what it’s about,” said Jose M. Larroque.

Indoor flooding: I was supposed to play in the annual halftime media game at the Sockers match Sunday at Pechanga Arena. I was on the same team as my former pal on the Politics Report, Andrew Keatts. But then the arena flooded from a water main break and so the game is postponed. Poor Sports Arena.

If you have any feedback or ideas for the Politics Report, send it to scott.lewis@voiceofsandiego.org.