San Diego’s Shadow Government Steps Into the Spotlight

Former Mayor Jerry Sanders steps back into the spotlight to undermine San Diego’s elected government

By Andy Cohen / San Diego Free Press

We often hear, particularly when a government entity is seeking to raise revenues for an important project (or, on occasion, a not-so-important project) that the associated revenues amount to a “jobs tax,” or a “job killing tax.” It’s a favorite meme of those of a particular political persuasion or economic status. Ordinance ‘A’ is a JOBS KILLER! We must not allow it to pass! Requiring health care is a JOBS KILLER! Any ordinance requiring a living wage is a JOBS KILLER! The minimum wage is a JOBS KILLER! Increasing the sales tax by one-half of one percent is a JOBS KILLER!

It’s an effective scare tactic used by those on the political right to prevent governments from being able to raise enough revenues to provide services that residents demand. That’s especially true here in San Diego, where we have a history of demanding services without providing a means to pay for them. We’re notorious for that.

As far as the Lincoln Club, or the San Diego Taxpayers Association, or the San Diego Chamber of Commerce, or, to a lesser extent, the San Diego Regional Economic Development Corporation is concerned, any revenues raised by the city for the provision of services—or just day-to-day operations—is a JOBS KILLING tax. Any regulations placed on any local businesses are JOBS KILLERS and are a hindrance to our economy. Anything that benefits workers is a JOBS KILLER.

During the mayoral special election, Kevin Faulconer often laments that the city council’s vote to essentially restore the housing impact fee to its original form—a 1.5 percent fee on commercial developments, with room for several exceptions, is going to tank our economy and drive businesses out of town. But Faulconer and his backers have never provided a scintilla of proof of their assertions. Only scary rhetoric and threats.

Faulconer wanted everyone to know that the JOBS KILLING TAX amounted to a 500% increase in the burden on local businesses. And now we have a new missive from former mayor and now Chamber of Commerce president Jerry Sanders, urging people to sign a petition to force the City Council to rescind its vote or face a ballot initiative in June.

Where have we heard this before? Just last week, actually, when the same forces tried to impose their will on the City Council to rescind their vote on the Barrio Logan Community Plan. The Council (six out of nine members) voted last week to send it to the ballot, believing that they’re on the right side of history, backing residents over powerful, wealthy special interests. Now the former mayor is pulling the same tactic, believing that he and his powerful friends at the Chamber can scare the City Council into backing down.

The entire issue of the linkage/housing impact fee came about because City Councils past refused to follow or just simply ignored city law. In 1990, San Diego created the linkage fee in order to deal with a crisis level shortage of affordable housing (something we’re still facing today). In 1996, in part due to poor economic conditions (allegedly), the Council halved those fees, with the condition that the decision would be revisited on a yearly basis and adjusted to meet current needs. A 2009 study by the City Auditor found that San Diego’s “Housing Trust Fund related commercial linkage fees are outdated, substantially lower than comparable cities, and not adjusted as required by the municipal code resulting in an estimated underfunding of $2.79 million for fiscal years 2006 through 2008” alone. (italics added)

The linkage fee is meant to offset the cost of housing low income families. It is a fee on developers whose projects tend to create a disproportionate number of low wage jobs. Employers refuse to pay enough for their workers to earn a livable wage, who in turn can’t afford the cost of housing in one of the most expensive locales in the country, creating a drag on the San Diego economy.

The Sanders missive reads as follows:

I’m writing on behalf of the Jobs Coalition to share some important news and to ask for your help as we work against the clock to try to protect jobs and San Diego’s middle class.

Our campaign to collect signatures to overturn the City Council’s decision to raise taxes on businesses by approximately 375 to 750 percent will start the day after Christmas. We have less than a month – until January 23 – to collect 34,000 valid signatures. Once we do, the Council will have to rescind its ill-conceived decision or put the issue before voters in June 2014.

———

This jobs tax could easily push us back into an economic recession. It will certainly cause some businesses to scale back or eliminate expansion plans, which will reduce job growth. Other companies will take their business – and local jobs – elsewhere and many more simply won’t consider moving to San Diego. At a time when our economy remains fragile, we cannot afford to put jobs at risk.

This jobs-killer also is a zombie tax because it will continue to automatically increase year after year without any review or approval by elected officials. (not true)

A narrow 5-4 City Council majority approved this massive tax increase to pay for subsidized housing. Unfortunately, while the hit to businesses and jobs is severe, the impact on San Diego’s subsidized housing is minimal. In fact, the most optimistic projections show this tax increase could generate 100 units a year, but there are more than 45,000 families waiting for subsidized housing. It’s time to find real solutions.

Members of our coalition put forth more than 20 alternative funding recommendations and policy reforms, none of which were seriously considered or forwarded to the City Council for action.

So I urge you today to join the Jobs Coalition – representing more than 50 regional businesses and organizations, including the San Diego Chamber, EDC, BIA, NAIOP and BOMA – to overturn this jobs-killing tax.

In the coming days we will launch a web site, www.stopthejobstax.org, which will contain everything you need to know about this important effort, including links to our social media feeds which will keep you updated on signature drives, news coverage and more.

The Stop the Jobs-Killing Tax campaign is busy fighting this tax to ensure that San Diego remains competitive and economically viable, but we need your help.

Jerry Sanders?
President & CEO
San Diego Regional Chamber of Commerce

We’ve heard all of this before. In 2005 it was the living wage ordinance that was going to crater our economy and force businesses to close their doors or move out of town. It didn’t happen. Again in 2008, when San Diego’s weak living wage ordinance was expanded, we heard the same thing. Those businesses are still here, and doing quite well. In 2010 when the same Jerry Sanders proposed a .05% sales tax increase for San Diego, opponents warned that it was a death knell for the San Diego economy (it seems to be having no ill effect on the City of El Cajon, who passed an identical sales tax increase to the one San Diegans rejected).

In Barrio Logan, Chamber allies are warning that not only will the entire maritime industry pack up and leave San Diego, but the Navy will follow right behind. 46,000 San Diego jobs are in jeopardy!!! Except that’s not anywhere even remotely close to accurate. And every time a proposal is brought up to increase the minimum wage, the same cast of characters warn us how devastating it will be to our economy.

What’s devastating to our economy is that far too many people don’t earn enough to make ends meet, even while working two and three jobs. What’s devastating is that too few have enough income to buy even the basic necessities. What’s devastating is the wealthy business interests demanding a bigger and bigger slice of the pie—and getting it—promising that it will “trickle down” into the pockets of the little people, except that it never does.

Meanwhile, what is proven economic fact is that when you put money in the coffers of those who need it most, they in turn spend it, putting it back into the economy at large, benefitting EVERYONE, creating rapid growth. Put the money in rich people’s pockets, and they sock it away, hoarding it so that it has no effect on the overall economy.

The fast food industry—the bellwether of low wage jobs in this country—costs California $717 million per year due to the fact that these workers depend on public subsidies just to survive. A 2004 report found that Wal Mart alone costs California $86 million per year to subsidize its workers.

Jerry Sanders and the Chamber of Commerce are now demanding that San Diegans perpetuate those policies locally.

The problem is not the linkage fee, which Sanders deceptively cites as a “375 to 750 percent” increase. The 1.5 percent is simply a restoral to the fee’s origins.

The problem is Sanders and his ilk determining that they, and not the City Council, control our city government. The problem is that Sanders and his Chamber of Commerce are the ones holding our economy hostage by vehemently opposing policies that have been proven in the past to do the most good for the most people; that tend to have enormous, positive effects on economic growth.

There is not a shred of evidence that Sanders’ claims are true. In fact, they are demonstrably false.

Here are a couple of thoughts: If the business community wants to reduce the necessity on the part of the city to levy fees against them, they should pay their workers a livable wage. Provide enough in salary and wages so that the state and city doesn’t have to pick up the slack. And if there are regulations that are truly overly burdensome, work with the City Council and community groups to scale them back. And don’t come back, after agreeing on 90%, as they did with the Barrio Logan Community Plan, and cry because they didn’t get 100% of what they wanted (i.e. total deregulation). We’ve seen what happens when business interests are left completely to their own devices when the energy companies in California were completely deregulated, and it wasn’t pretty.

Instead of always fighting for the rich guys, it’s about time our elected—and non-elected—officials started fighting for the little guy, as our City Council has done recently. We might just be surprised at the results.