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Pensions, tourism money and streets were major issues in 2012. We see what’s in store for them in 2013.
Pensions, tourism money and streets. Big things happened with big issues in San Diego government this year aside from Bob Filner’s election as the 35th mayor.
We’ll run down why these mattered and their future in 2013.
Pensions Are Dead, Long Live Pensions
You could be forgiven for thinking the city doesn’t give its workers guaranteed pensions anymore. But you would be wrong.
In June, San Diegans overwhelmingly passed Proposition B, an initiative centered on giving new city hires except cops 401(k)s instead of pensions.
The key word there: new.
State law gives nearly ironclad protections to pension benefits for already retired and existing workers. The pension obligation that has dominated city politics for the better part of a decade must be paid. The switch to 401(k)s for new hires isn’t projected to save any money in the long term, and closing the pension system could accelerate almost $90 million in payments over the next five years.
Prop. B, however, did include one provision that aims to directly tame the pension price tag. The initiative called for a freeze in city employee pensionable pay until mid-2018. If that happens, pension costs go down because of a simple principle: Pay someone less when they’re working and you pay them less when they’re retired. This could save almost $1 billion over 30 years.
Filner needs to negotiate this pay freeze with city labor groups, something that should be at the top of his agenda through the spring. The city’s largest labor group, the white-collar Municipal Employees Association, is open to the pensionable salary freeze if it’s packaged with bonuses or other pay increases allowed under the initiative.
The white-collar union has filed suit over Prop. B and multiple other pension-related lawsuits remain outstanding. The pay freeze could part of a larger deal to resolve everything, said Mike Zucchet, the union’s head.
“Maybe we could all come together and end this madness,” Zucchet said.
San Diego’s hotel industry has long looked for ways to secure city money for promoting tourism.
In 2012, the city passed and extended hotel-room taxes projected to raise more than $2 billion over the next four decades. Half that money will go toward expanding the Convention Center; the rest is for marketing efforts to lure tourists to the city.
These extra taxes will cost tourists up to 5 percent more on their hotel bills above the 10.5 percent they pay now. Once implemented, tourists will pay as much as $15.50 in city hotel-room taxes for every $100 they spend.
Backers of the taxes contend investing in an expanded Convention Center and promoting tourism will bring millions of dollars into city coffers each year.
Both taxes likely will still be issues in 2013. The hotel industry, not the general public, voted to approve the taxes, which might not be allowed under California law.
The Convention Center tax hike will go before a judge in February. City Attorney Jan Goldsmith has put the chances of that tax surviving legal muster at no “more than 50-50.” That tax won’t go into effect unless a court gives the go-ahead.
The marketing tax already exists and will continue next year. But civic activist Mel Shapiro, one of the challengers of the Convention Center tax, said his attorney is drafting a lawsuit against the marketing tax, too. A 2010 state Constitution change made these kinds of taxes harder to implement without a public vote.
The City Began Taking Its Bad Streets Seriously
Our major investigation in 2011 detailed the lengthy decay of San Diego’s roads and the numerous broken infrastructure promises from former Mayor Jerry Sanders.
Momentum continued soon after among key policy makers to do something. In 2012, they started.
Sanders and the City Council passed reforms designed to speed up the repair process. They created a website to more easily identify projects and met with community groups to start boosting transparency. They developed more solid numbers on the backlog and approved a financing plan for the next five years.
The work to be done remains immense. The city doesn’t spend enough money to keep roads and other infrastructure from getting worse. Much of the money it does plan to spend is borrowed. And the city still has to prove it’s smoothed its bureaucratic inefficiencies to fix things at the speed they’re decaying and then improve conditions.
Still, it seems to be infrastructure’s moment. New Council President Todd Gloria created a new council committee dedicated to the problem. He also endorsed in concept a major borrowing plan aimed at resurfacing roads and building new community facilities among other issues.
The city doesn’t necessarily have to take out a big loan to finance its repairs — losing mayoral candidate Carl DeMaio wanted to sequester new tax revenues — but fixing this problem will require money from somewhere. We’ll know a lot more about it by the end of 2013.
Liam Dillon is a news reporter for Voice of San Diego. He covers San Diego City Hall, the 2012 mayor’s race and big building projects. What should he write about next?
Please contact him directly at firstname.lastname@example.org or 619.550.5663.
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