Rebuild San Diego: Snake Oil or Cure for Local Infrastructure?

By Doug Porter

This week local politicos will be making the rounds, led by Mayor Kevin Faulconer and City Councilman Mark Kersey, promising to repair San Diego’s infrastructure. Potholes big enough to be named, geysers from broken water mains regular enough to be a tourist attractions and crumbling sidewalks unsafe at any walking speed are facts of life in America’s Finest City.

Smiling faces from city hall will be front and center in the media, pitching Councilmember Kersey’s “Rebuild San Diego” ballot measure promising three decades worth of improvement with no tax increases. If it sounds too good to be true, that’s because it probably is.

Despite the billion with B numbers you’ll be hearing, this “dedicated funding stream” is not enough money and rife with the potential to degrade other city services.

What It Is

The “Rebuild San Diego” ballot measure came about after informal talks between representatives of local power brokers fell apart. The mayor made statements supportive of creating efficiencies with current resources rather than new taxes to implement a fix.

Discussions between business groups and organized labor –which included paying for polling– dissolved when it became clear that the conversations were going nowhere over questions about prevailing wages. So it became Kersey’s job to find a plan that would make do.

As it stands now, Councilman Kersey’s plan would commit future growth in three of the City’s existing revenue streams – sales tax, the general fund and pension reform savings – to neighborhood projects. Accepting its projections at face value, $5 billion would be made available for infrastructure projects over 30 years.

Mayor Faulconer endorsed the proposal earlier this month at his second “State of the City” address. The current wave of publicity comes as the City Council is scheduled to vote at 2 p.m. Tuesday to direct the City Attorney’s office to draft the language for the “Rebuild San Diego” measure so it can be ready to be placed on the June 7, 2016, ballot.

Basic Math

Like so many proposals coming out of government (at all levels) these days, the Rebuild Plan uses long-term projections to generate impressive monetary talking points. FIVE BILLION DOLLARS…over 30 years… Wow. Who could turn that down?

Except…there’s the teeny little problem of the city needing $1.4 billion (and counting) for infrastructure repairs over the NEXT FIVE YEARS. A KPBS story quotes Kersey saying the plan only raises “a few hundred million dollars” in five to 10 years.

There’s also the issue of sales tax revenue growth–projected to net the city $3 billion to $4 billion over 30 years if the economy continues on its current trajectory.

Is this thinking coming from the same mentality that held savings and loan investments after deregulation were a safe bet, or the internet bubble would never burst or real estate would continue to appreciate indefinitely? Thirty years without a major recession? Really?

The Union-Tribune report on Independent Budget Analyst Andrea Tevlin’s analysis said she called the plan prudent, with a couple of asterisks:

Tevlin’s most significant recommended tweak is allowing the revenue requirements to be suspended for a year if two-thirds of the City Council declares a financial emergency, most likely amid a significant recession.

“We believe a provision requiring a two-thirds supermajority vote to suspend the measure represents a good safeguard that allows some financial flexibility for unanticipated budgetary emergencies, while retaining the underlying infrastructure funding commitment,” Tevlin says in her report.

She also suggests that controversy over what constitutes infrastructure spending should be solved by having the measure declare it includes maintenance and planning of projects in addition to actual construction cost.

This “financial emergency” proviso is huge. This proposal amounts to budgeting at the ballot box, a concept with –at best– a checkered history.

The legislature is still “paying back” money to education “borrowed” so as would appear to be meeting the provisions of Proposition 47 from previous budgets.

The supermajority vote idea sounds great until you realize that an obstinate minority can tie up the process for reasons having nothing to do with the “emergency” at hand. Ask President Barrack Obama about how that’s worked for him.

The biggest issue buried in all the assumptions of Kersey’s proposal is the potential for neglect of other parts of the city budget; libraries, police, fire, lifeguards, etc. Unless you’re looking to drown government in a bathtub, it’s reasonable to expect the costs for these entities to grow as San Diego’s population increases by more than half a million people over the next 30 years.

If we all agree that infrastructure work is a priority, and we all get to vote in city council races, why do we need to enact a law telling the council what to do?

The answer is to that question, is a “Look, Faulconer’s doing something” re-election campaign and a back door sop to advocates of shrinking government.

I’m betting most of the city council won’t dare risk the adverse publicity of saying no to this lame idea. Let’s hope they throw in some language protecting other parts of the city in the future.

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This is an excerpt from Doug Porter’s column at our associated San Diego Free Press.