Politics Report: Taxes Turmoil

Sacramento legislators are getting nervous about one of the big tax policy measures they put on the ballot for November and their effort to change it could kill the city of San Diego’s nascent effort to ask voters to approve a stormwater tax.

It was a hell of a week in state how-easy-should-it-be-to-raise-taxes policy.

I had a roundup in March of all the big tax policy changes heading to the November ballot.

Here’s the quick recap and update: One of them, the Taxpayer Protection Act, was going to make it really hard to pass taxes. If voters approved it, not only would it have made two-thirds the required threshold for voters to approve any local tax increase, even the Legislature couldn’t pass a tax without voter approval. Most importantly it would have rolled back taxes passed in the last two years and it would have prohibited fees and taxes on vehicle miles traveled — a boon for developers who want to build in unincorporated areas of the county.

It was a grab-bag of conservative priorities for fiscal policy. And it’s dead. The California Supreme Court ruled it didn’t take the proper steps to change the California Constitution.

The big news, though, for San Diego: ACA 1 is on the ballot. It can’t be taken off the ballot. However, supermajorities of the state Senate and Assembly could change it — more on that in a minute. ACA 1 would allow local governments to raise property taxes OR sales taxes OR parcel taxes with a vote of approval by the people of 55 percent or higher. This would only be for “construction, reconstruction, rehabilitation, or replacement of public infrastructure, affordable housing, including down payment assistance, or permanent supportive housing, or the acquisition or lease of real property for those purposes…”

This would be a major change. If this were in place, the Chargers would still be here. SANDAG would have passed a couple sales tax increases. The sea lions and La Jollans would have made peace.

However: Though some dispute whether it’s been polled effectively, the polling on ACA 1 hasn’t been great. There’s some private polling and then this week, a new one from the Public Policy Institute of California had it underwater.

Enter a new contender, ACA 10: Ah yes, another layer of complexity. ACA 10 would change the measure. Only bonds could pass with 55 percent of the vote. So a local government could, like school districts can now, get a bond approved for any local infrastructure project, including affordable housing, and then raise property taxes (and only property taxes) to pay it off. You can read more here.

So no more parcel taxes or sales taxes. If a local sports team wants a stadium, it still would need two-thirds of the vote if it wanted to pay for it with a hotel tax or sales tax.

Important: ACA 10 has one week (one!) to pass both the Assembly and the Senate with two-thirds support in each chamber. There’s a ton of drama already in Sacramento right now with criminal justice reforms and reforms to reforms and the new budget.

The gist: Essentially they want to try to get the word tax out of the measure. Bonds sound nicer even though they raise property taxes.

Assemblyman Chris Ward is one of the supporters. His team sent this statement:

“ACA 10 is an improved version of a critical question to give to voters this fall to weigh in on. For too long, measures that have received a majority of the vote –– but short of a two-thirds vote –– have failed due to the higher threshold they have to meet. This would align how we fund essential community infrastructure and affordable housing just like we already do for school facility measures. I hope voters agree and vote ‘Yes’ in November.”

Ward is going against the wishes of the leaders of his city.

Local impact: San Diego City Council President Sean Elo-Rivera wants his colleagues to put on the ballot a stormwater tax. It would likely put something like a 7-cent levy on every square foot of impermeable land someone owns in the city. The money would fund flood control infrastructure and all the pumps channels and wetlands needed to make sure the water runs off San Diego and into the ocean as cleanly as possible.

Most supporters of this were pretty openly counting on ACA 1 passing at the same time and immediately impacting this measure, meaning it could pass with approval from just 55 percent of voters.

As you’ll see below, Mayor Todd Gloria has not been super enthusiastic about the stormwater tax but when pressed, he says he supports Elo-Rivera’s effort. I asked his office about this change to ACA 1 in the works in Sacramento.

“While understanding concessions sometimes need to be made, the mayor would have preferred the measure remained in its original form, which would have helped our local stormwater measure,” wrote Rachel Laing, his director of communications.

As for Elo-Rivera, he says his team has not engaged local legislators on the issue.

“We obviously would prefer the most favorable conditions possible for a ballot measure. Beyond this specific stormwater issue, I think there would be a lot of benefits for a 55-percent threshold for special taxes for infrastructure. That kind of a majority should be enough to make needed investments in infrastructure,” he said

Elo-Rivera said he would work with the coalition that formed around the issue including the groups, Coastkeeper, Climate Action Campaign, Alliance SD and Groundwork to decide whether to go forward if the ballot measure does change.

A Conversation with the Mayor

This week, for the podcast, I sat down with San Diego Mayor Todd Gloria. We had 45 minutes and I somehow burned 30 of them on homelessness alone but it has been and will be the top priority of this region for a while.

I encourage you to listen to the whole show here. I included some of the questions readers submitted as well.

But here are a couple good exchanges.

I asked the mayor to discuss his proposal for a mega-shelter north of Little Italy at Kettner and Vine streets and gave him the chance to respond to specific complaints about his idea. Here’s his take on the cost.

Me: “… you’re talking about $2,000 to $3,000 per person per month. That seems, even with our rates, and rental rates, not that far from putting them in actual apartments. What are we doing here? Why is it so expensive? And is that the, the best way to spend money to help people who are struggling on the streets?”

Mayor Gloria: “I don’t think it’s an accurate representation to suggest that the people that we’re talking about can successfully go into an isolated studio, one-bedroom apartment and be successful when they talk about the cost of the rental. That’s okay. But then you have to layer in the food services, the social services. All the things that come with it. So when you’re doing an apples-to-apples comparison, this is not what they’re doing. What you’re talking about are people who are often dealing with significant mental illness, severe addiction, and being in those environments may not make them be successful.”

(Note: This is as direct and forceful of a rejection of the housing-first approach to homelessness as I’ve ever heard the mayor articulate.)

Taxes: I also asked him about various taxes voters will have to consider on the November ballot. He adamantly supports a 1-cent sales tax for the city of San Diego that would reverse the budget deficit cycle and, he says, allow the city to invest in infrastructure. But he’s pretty unenthusiastic about a potential stormwater tax.

Council President Sean Elo-Rivera is pushing a property tax that would add several cents for every square foot of impermeable land someone owns within the city of San Diego. How it would be phased in or what exceptions it may have are major discussions still to have. The mayor doesn’t really want to lead on it.

I also asked him about the half-cent tax to support transit and roads countywide. The money would fund SANDAG’s plans.

I asked him about stormwater first. He was supportive but non-committal, if that makes sense.

Mayor Gloria: “Scott, I always have a bias towards action. And much like I said, we’ve been kicking the can down the pothole road for a very long time with regard to infrastructure. The same is true for stormwater. We just have to make progress. And this is the year to make progress. This is the time to take tackle this issue.

Me: So there’s another ballot measure already on the ballot to raise the sales tax for SANDAG and for transit and, and road improvement that are in that initiative. Is that one you support as well?

“I supported the previous version that didn’t make the, the ballot. I worry about whether or not that can be successful. I want to be clear. There are a lot of SANDAG haters out there. We need SANDAG to be successful. Our regional economy, the growth of jobs in our community requires a transportation system that works. And that is SANDAG’s responsibility. That’s their jurisdiction. They go and compete for state and federal funds to bring back to San Diego. With the Bipartisan Infrastructure Law, this is more important than ever. So we need them to be successful.

“That said, there’s been a lot of turmoil over there. I think about half the board doesn’t support the measure. I think that all is going to be a challenge for that campaign. My focus is on the Penny for Progress (1-cent sales tax increase for the city) initiative that I’m partnering with Council Member Raul Campillo to get across the finish line. That’s where my focus and attention will be this November.”

Me: So, you’re for that, you’re on the fence about the stormwater, but slightly supportive and you’re on the fence about the SANDAG one, but, but slightly negative.

Mayor Gloria: “I think that’s, I mean those are fine things to say. I think we will know a lot more in the next month or so.”

Me: But there’s a chance you could oppose both the SANDAG and the stormwater?

Mayor Gloria: “We will cross the bridge when they’re all on the ballot.

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