By Carl DeMaio
San Diego City Councilmember, District 5
In these tough economic times, many San Diegans are feeling the pinch of the recession. I hear every day from working families that are struggling just to make ends meet. These families are looking for ways to cut expenses, prioritizing their budgets and working harder than ever before to survive.
Unfortunately, our city government has added to their burden by raising fees, cutting services, and recently proposing significant tax hikes. That’s just wrong—and does not have to be the case if our city government implemented some common-sense fiscal reforms.
The City Council and city bureaucrats are poring over a bevy of proposals to raise taxes and fees—and some of these proposals may soon be acted upon.
Two ideas seem to be getting the most attention. One idea is to raise the most regressive tax in government—the city sales tax—by .5 percent or $103 million annually. This will hit working families the most. Another proposal is to eliminate city trash service altogether and force residents to pay another $34-50 million more each year.
City residents have already seen their water and sewer bills skyrocket over the past four years —up more than 35 percent. While city leaders claim the increases stem from the cost of water, the real driver over the past decade has been unsustainable labor cost increases primarily due to salary increases and big pension and benefits packages that far exceed the private sector average.
San Diegans should strongly oppose any move to raise city revenues on the backs of working families. Not a dime of the money raised will go to improving neighborhood services. Like a good share of the water rate increases, these monies will all flow down the giant hole in the city’s budget—the pension fund.
The pension and retiree health care packages awarded to city employees over the years are simply unsustainable. City employees can retire as early as age 50, can “double dip” by receiving their full salary and a full pension allowance during the last five years of their city service, and receive free taxpayer-funded healthcare for life. These are a few of a number of perks that you will be hard-pressed to find anywhere but in our city government.
San Diegans do not receive these lavish benefit packages, but are now being asked to pay more during an historic economic downturn to pay the bill for them.
And the costs are staggering. The pension and retiree health care funds are more than $3.4 billion in debt—and the true annual cost of retirement benefits last year was more than $370 million, or roughly two-thirds of city payroll.
We can and must reform these pension benefits. Doing so will save millions each year and eliminate the need for tax and fee hikes.
City leaders should also begin to focus on how to implement meaningful cost savings and management efficiencies to stabilize San Diego’s budget. For example, in 2006 with the overwhelming approval of Prop. C, voters asked that city services be subjected to regular competitive bidding.
Now almost four years later, not one city service has been reviewed using Prop. C’s reforms. Why? The city’s powerful labor unions have used their influence on the City Council to block any competitive bids on city services. Sadly, while city leaders weigh which taxes or fees to hike, millions in cost savings are literally sitting on the table waiting to be realized from competitive bidding.
As all of this budget turmoil plays out, city leaders are giving the green light to costly projects such as a new $400 million City Hall. As branch library hours are cut throughout the city, our city leaders are breaking ground on a brand new 300,000-square-foot downtown library—and admit we do not have the funds yet to pay for it.
Some in the community may instinctively favor tax and fee hikes. However, if they knew that not a dime of that money would go to improve our neighborhood services, would they be so eager to entrust City Hall with even more of their money? And without reform, how long do they think it would be before city leaders are back again, asking for even more money?
I was elected in 2008 on a platform to fix the city’s finances and refocus city government on our core neighborhood services. Through pension reform, managed competition and other efficiency reforms, we can not only balance the city’s budget, but more importantly, we can get our city government working again for our neighborhoods.
Before approving tax and fee increases we should demand no less than full reform of city government.
Please e-mail your comments or ideas to me at email@example.com.