The Many Problems With Kersey's Infrastructure Plan

Government

The Many Problems With Kersey’s Big Streets Plan

It’s not enough money in the short term to resolve funding gaps. And history shows that in the long term, approaches like this one haven’t worked here.

In January, San Diego City Councilman Mark Kersey pledged to put up a ballot measure that would finally deal with the city’s large infrastructure funding dilemma.

But instead of raising new money through a tax, or identifying things he would cut to free up money, Kersey settled on a multi-decade plan to simply force the city to prioritize decaying streets, facilities and other concrete needs.

It won’t, however, produce enough money to pay for all the stuff that needs fixing right away. History shows that in the long term, approaches like this one haven’t worked here. And Kersey’s plan reveals we’re still a long way from actually resolving the infrastructure problem.

Before I get into all that, here’s a breakdown of what the proposal will do.

Kersey’s Plan: The Basics

Most years, the money the city collects from taxes grows. Kersey wants to tie the hands of future politicians to ensure that a portion of that growth is always set aside for infrastructure in three ways:

• A large percentage of natural growth in sales tax revenues over the next three decades

• Money saved from paying off pension debt over the next three decades

• Half of all natural tax revenue growth over the next 10 years

Importantly, this doesn’t involve any new money. It only identifies sources of money the city has already anticipated, and formally directs it toward infrastructure.

Kersey wants city voters to approve the plan in June.

This Won’t Fix the Problem

The latest city numbers indicate there’s a $1.7 billion gap between the roads, buildings, storm drains and other infrastructure the city wants to fix and the money it has to make repairs over the next five years.

I asked Kersey how much money his plan will produce over the next five years.

“The next five to 10 years, we’re talking about a few hundred million dollars,” Kersey said.

So his plan produces less than a quarter of what’s needed.

Kersey’s answer also points to an even bigger problem with his approach. The city’s independent budget analyst has made very clear in past reports that the city can’t rely only on naturally growing tax revenues to fix its infrastructure problem. The funding gap is simply too large.

Kersey also said Wednesday that he plans to continue the city’s plans to borrow money without a tax increase to pay for infrastructure repairs. The IBA also has called out that system as being unsustainable because it locks up too much of the city’s property and day-to-day budget revenues in future years.

So while Kersey’s numbers sound big, they still don’t provide enough money to do anything meaningful in the short term. In the long term, the plan presents another problem.

There’s Lots of Historical Precedent for This and It’s All Bad

San Diego has a long history of politicians trying to set aside future money for something they like only to have it fail.

In the 1990s, then-Mayor Susan Golding tried to do it with public safety. It didn’t work. In the 2000s, then-Mayor Dick Murphy tried to do it with libraries. That didn’t work, either.

Political scientist Vlad Kogan, who has written extensively about San Diego politics, once told me that Golding and Murphy’s plans were failures because they ignored that the cost of other services grew over time, too.

For instance, city leaders — including Kersey — recently agreed to raises for police officers over coming years. The assumption the politicians are making is that revenues will also grow — the city will collect more money from sales, hotel and property taxes to pay for these raises.

“I think it’s a shell game,” Kogan said.

Kersey said his idea is different because a voter mandate will force city leaders to keep the infrastructure funding promise.

But that has a failed historical precedent as well. Three years ago, then-Councilman Carl DeMaio, Kersey’s predecessor, pitched a ballot measure that would have lockboxed future revenue growth and dedicated it to infrastructure. The money sources were slightly different, but the concept was exactly the same.

DeMaio’s idea landed with a thud. It got one committee hearing and was barely spoken of again.

And Kersey’s plan is more radical than DeMaio’s. DeMaio’s only tied up new money for five years. Kersey wants to do it for three decades.

Ten years from now, whoever is on the City Council is projected to have a nice little windfall because the city will have finally paid off some old pension debt. By then, Kersey will be gone and so will every other city politician now in office. Beyond that, we have no idea what the city’s needs might be in 2025. We might be driving hover cars and riding the hyperloop, who knows?

But Kersey wants to tie that future Council’s hands right now.

“The whole point of this is to make sure that future generations of city leaders are forced to prioritize infrastructure funding,” Kersey said.

This Means We’re Still Far Away From Solving the Problem

There are two ways to fix the city’s infrastructure problem. The first is to raise taxes, which is problematic because it adds to people’s burden.

The other is to redesign city government to free up the money you need to actually repair and build everything you want. That could mean selling off things like golf courses and dedicating that cash to infrastructure. Or the city could stop paying for things and make citizens pick up the costs directly. Or the city could radically cut costs in other services. This, of course, would probably require not spending $15 million a year on a new football stadium.

The point is that the math has to work – the money you need matches the money you have.

By not supporting a tax hike, Kersey’s isn’t taking the first approach. And he’s taking the easy part of the second. He wants to set the city’s spending priorities for the next 30 years without having to make the hard decisions on what the city won’t be able to buy because of his mandate.

More immediately, Kersey’s plan also likely signals the death knell of the megabond – a long floated tax increase to pay for infrastructure. For years, the November 2016 ballot was seen as the best option for such a measure because turnout is expected to be high, especially among people who might support a tax hike.

But because Kersey’s plan is a ballot measure as well, city leaders would be silly to float a second infrastructure plan next year. If the city does want to get new money, it will have to rely on a proposed ballot measure from SANDAG for a sales tax hike to provide infrastructure improvements countywide.

Council President Sherri Lightner endorsed Kersey’s plan at his press conference Wednesday. The city’s infrastructure committee, which Kersey heads, will hear the measure next week. Lightner and Kersey said they expected the full Council to vote no later than February to put the plan on the June ballot.

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