A Reader's Guide to the Megabond
A megabond would be a mega way to fix a mega city problem. But it will take a lot of work for city leaders to persuade voters they should increase taxes to do it.
“The biggest single barrier to achieving greatness,” San Diego interim mayor Todd Gloria said in his State of the City speech last week, “is our city’s infrastructure.”
With that, Gloria laid out a plan for a tax hike in the form of a giant loan to repair the city’s crumbling streets, buildings, storm drains and other infrastructure. He wants to put the loan on the ballot in 2016. The idea for this kind of “megabond” – new word alert! – has been kicking around City Hall for years. But its place in a State of the City address gives the plan a spotlight it’s never had. Here’s all you need to know about the megabond.
Why Are People Talking About a Megabond?
San Diego’s infrastructure is broken and it’s getting worse. The most recent estimate pegs the city’s backlog of damaged streets, storm drains and buildings at $900 million. The number doesn’t include fixing other things like water and sewer pipes and sidewalks. When you look at everything that needs repairs, City Hall watchers are throwing out numbers in the multiple billions of dollars.
A megabond could address everything from streets and sidewalks to pipes and storm drains.
Aren’t We Already Borrowing Money to Fix This Stuff?
We are indeed, including a new $120 million bond the City Council approved last week. It just isn’t enough.
Even with the new loan money and others approved previously, the city still doesn’t spend enough every year to keep its infrastructure from deteriorating. The last estimate guessed things are getting worse at a rate of 5 percent to 10 percent over five years.
A megabond would be different. It would be big enough to not only stop the decay, but to make things better. And it would include a tax hike so there’s a pot of money to pay it back.
The current borrowing program relies on the city’s day-to-day budget and requires the city to use its properties as collateral for the loan. This is unsustainable, the city’s independent budget analyst said recently. The city’s tying up too much of its long-term finances and running out of properties to hock.
What’s Going to Be in This Bond?
It’s safe to assume there will be a lot of money for road repairs. It’s also safe to guess that some new things, such as fire stations to boost lagging emergency response times, will be in there, too.
Beyond that, it’s up for grabs. In his speech, Gloria said he planned to meet with labor and business leaders about what else might go in the bond. These groups already are attempting to use the bond to horse trade. Business leaders hate a new affordable housing fee and suggested including money to build affordable housing in the megabond, instead. The City Council approved the fee anyway, and the business leaders now are threatening not to support the bond.
Bond money could go toward a new Chargers stadium, too. But that could hijack the proposal and make it all about football. Indeed, the current stadium discussion seems to be heading away from bond dollars and toward using money from the sale of the Qualcomm Stadium and Sports Arena sites.
What Are the Hurdles?
There are many. First, it’s likely two-thirds of voters will need to approve the bond because of state law. That’s a huge margin, and a big reason Gloria wants to push the vote to 2016. A more tax-friendly, liberal population is more likely to vote then.
It’s also part of the reason why support from major business and labor groups matters so much. It will take a well-organized and funded campaign to get the bond to pass. The existence of a well-organized and funded opposition will make it much harder.
Another hurdle is the city itself. Less than three years ago, the city was struggling to spend the little repair money it did have despite the huge need. The city has made lots of reforms since then, but it has to prove it has the capacity to repair things quickly and efficiently.
Experts also say voters need to know exactly what they’re getting before they step into the ballot box. A bond has a much better shot if people know there’s a park coming to their neighborhood, for example. Expect to see a traveling road show of bond proponents asking each community what it wants. If you don’t, the bond’s in trouble.
What Do the Mayoral Candidates Say?
Alvarez’s stance is straightforward: The city needs more money than it has now to repair its infrastructure so voters should pass a bond.
Faulconer believes the city needs to spend more money on repairs, but told us he couldn’t see any circumstance where he’d back a bond that included a tax increase. He has not put forward, however, alternatives that would generate anywhere near the same amount of money.
Give it to Me Straight.
Anyone who’s examined San Diego’s infrastructure problems believes the city needs to spend more money on repairs. The same probably goes for anyone who has driven along the city’s potholed streets.
A megabond would be a mega way to fix the problem. But it will take a lot of work for city leaders to persuade voters they should fork over more tax dollars.