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Fees Are More Popular than Taxes

"The City needs to stop using the general fund to subsidize services that are funded by user fees in most other cities," said Bob Nelson, chair of the Citizens Revenue Review and Economic Competitiveness Commission.

On Wednesday, December 1, Nelson presented the Citizens Revenue Review Report to councilmembers sitting on the Budget and Finance Committee.

The Citizens Review Commission, made up of business professors from the University of San Diego and San Diego State University, developers, and CEOs of local businesses, spent the past 50 weeks strategizing on how the City can close it's $73 million structural deficit and raise general fund revenues while providing adequate levels of public service.

"San Diego collects far less general revenue per capita compared to peer cities in the state," said Nelson as he presented the commission's findings. "We believe a top priority should be to seek voter approval for trash and stormwater fees. Fees are more popular than taxes."

Currently, the city spends $49 million a year on trash collection and an additional $31 million for stormwater programs, $7 million more than the projected deficit for 2011.

In addition to new user fees for trash collection and increasing fees for stormwater treatment, commissioners also recommended the implementation of the managed competition program. According to the report, the City could save $20 million a year by contracting out city services to private companies.

But, as Nelson explained, the savings produced from trash and stormwater fees and managed competition could take years to obtain, and in order to prevent more cuts to public service — 1414 city positions have been cut since 2007 — the commission searched for quicker solutions.

That solution: raise other fees such as the cost for business licenses. Nelson said that the average cost that California cities charge business owners to set up shop in their cities is $601. In San Diego, the cost to obtain a business license is $79.

"Merely raising it to what San Jose charges ($240) would add $26 million a year to the general fund," said Nelson. "It is so radically different from other cities.... We don't believe it is providing any edge, instead we are just robbing the city revenues that other cities get."

After Nelson finished presenting the commission's findings, councilmembers had an opportunity to comment. And while some elected officials praised the report, others, such as Carl DeMaio, rejected the conclusions.

"Was this report written before nearly two-thirds of San Diegans rejected the sales tax increase?" Asked DeMaio. "There is so much inconsistency within this document. I think it's woefully out of step with political realities."

Added DeMaio: "As it relates to comparisons with Los Angeles and San Francisco, I don't want San Diego to go down the toilet with those cities."

The committee later passed a motion to send the report to city council.

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"The City needs to stop using the general fund to subsidize services that are funded by user fees in most other cities," said Bob Nelson, chair of the Citizens Revenue Review and Economic Competitiveness Commission.

On Wednesday, December 1, Nelson presented the Citizens Revenue Review Report to councilmembers sitting on the Budget and Finance Committee.

The Citizens Review Commission, made up of business professors from the University of San Diego and San Diego State University, developers, and CEOs of local businesses, spent the past 50 weeks strategizing on how the City can close it's $73 million structural deficit and raise general fund revenues while providing adequate levels of public service.

"San Diego collects far less general revenue per capita compared to peer cities in the state," said Nelson as he presented the commission's findings. "We believe a top priority should be to seek voter approval for trash and stormwater fees. Fees are more popular than taxes."

Currently, the city spends $49 million a year on trash collection and an additional $31 million for stormwater programs, $7 million more than the projected deficit for 2011.

In addition to new user fees for trash collection and increasing fees for stormwater treatment, commissioners also recommended the implementation of the managed competition program. According to the report, the City could save $20 million a year by contracting out city services to private companies.

But, as Nelson explained, the savings produced from trash and stormwater fees and managed competition could take years to obtain, and in order to prevent more cuts to public service — 1414 city positions have been cut since 2007 — the commission searched for quicker solutions.

That solution: raise other fees such as the cost for business licenses. Nelson said that the average cost that California cities charge business owners to set up shop in their cities is $601. In San Diego, the cost to obtain a business license is $79.

"Merely raising it to what San Jose charges ($240) would add $26 million a year to the general fund," said Nelson. "It is so radically different from other cities.... We don't believe it is providing any edge, instead we are just robbing the city revenues that other cities get."

After Nelson finished presenting the commission's findings, councilmembers had an opportunity to comment. And while some elected officials praised the report, others, such as Carl DeMaio, rejected the conclusions.

"Was this report written before nearly two-thirds of San Diegans rejected the sales tax increase?" Asked DeMaio. "There is so much inconsistency within this document. I think it's woefully out of step with political realities."

Added DeMaio: "As it relates to comparisons with Los Angeles and San Francisco, I don't want San Diego to go down the toilet with those cities."

The committee later passed a motion to send the report to city council.

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Comments
10

There are many laws that govern how taxes are put in place and how they are used. Not so for "fees". In most cases, they are a check for cash to cities to spend as they choose and collect as they choose, without the taint of legality required for taxes. Of course, this makes fees more popular. After all, they aren't taxes. The only people who can't tell them apart are the people who pay them.

Dec. 5, 2010

Added DeMaio: "As it relates to comparisons with Los Angeles and San Francisco, I don't want San Diego to go down the toilet with those cities."

========================================

BOOM!

Dec. 6, 2010

There are many laws that govern how taxes are put in place and how they are used. Not so for "fees".

Actually "fees" are now subject to the same passage majorities as taxes per our last election, forgot the propisition that made that a reality.

Dec. 6, 2010

It could have been Prop. 26. In any case, here's a link to Article XIIC of the hopefully amended California Constitution...

http://ballotpedia.org/wiki/index.php/Article_XIII_C,_California_Constitution

There may be other applicable language, but I feel lazy enough not to look further...

Dec. 6, 2010

Yes-it was Prop 26.

We needed it big time. So glad ir=t passed.

Dec. 6, 2010

RE: "Carl DeMaio, rejected the conclusions."

At least one Councilmember "gets it," this 50 week old Citizens Revenue Review Report was nothing more than a poor attempt to shift fiscal discussion away from the Pension Debacle and when that was brought up at these meetings we were told that that was not one of the options to be discussed!

This "Report" is just another step toward the sell off of San Diego's Quality of Life to help provide some temporary money until $ANDERS and friends leave office and start taking their own Pensions, like Donna Fry just did!

Our Leaders are playing Musical Chairs with the City Budget and nobody want to be left without a BIG FAT Pension when the music stops...

I hope Carl calls out the other Members and asks them to publicly state how much of a cut in Salary and future Pension they are each will to accept; that will indicate to me if they are still part of the problem or if they want to lead SD to fiscal reform without selling US OUT!

Dec. 6, 2010

At least one Councilmember "gets it," this 50 week old Citizens Revenue Review Report was nothing more than a poor attempt to shift fiscal discussion away from the Pension Debacle

You know it-this is what the public unions have been asking for for years now.....

Dec. 6, 2010

DeMaio is a mixed bag: His talk is always about being against "fees" and "taxes," but "assessments" are never mentioned. And guess what? DeMaio loves assessments. As nostalgic says, "The only people who can't tell them apart are the people who pay them."

DeMaio's recent plan http://cleanupcityhall.com/uploaded/FinancialReport.pdf documents his support for assessments, and with the code language, "local control" meaning total privatization.

From page 49 of DeMaio's plan: "Long-Term Changes IN PROGRESS – ADDITIONAL REFORMS IN DEVELOPMENT In addition to the issues discussed above, Councilmember DeMaio plans to explore: • Expanded Maintenance Assessment Districts to Provide Enhanced Service with Local Control

On top of that, if you watch the July 20, 2010, Council video for Item 332, renewal of the CPCI-controlled MADs, DeMaio blusters on about this same "local control" idea. What does local control mean? Oh, sounds good...assess people on their property bill and let them have total local control, meaning cut out any City oversight (for what it's worth!) and give local control to ...who?

I'll show you "who" is: The minutes from the Little Italy Association Board of Directors Meeting, January 9, 2007, state:

"On August 17, 2006, a letter was sent to Mayor Jerry Sanders requesting help for the Little Italy Maintenance Assessment District. The letter reiterated to the Mayor that the Little Italy MAD funds are not City funds, rather assessment funds raised through property owner taxes. Also, that the City is Assessing the Association 4% of the total annual assessments (collected or not), totaling approximately $26,000 for Administration of the district but not providing a fast turn-around for reimbursements or effective service. The letter requests that the Mayor consider a policy shift for all San Diego Maintenance Districts that would consist of the following: 1. Transfer the property assessments, in bulk as collected, to the contracted non-profit organizations at least twice per year 2. Allow the district management corporation to use these anticipated property assessments as collateral for lines of credit by local lending institutions. This would be accomplished through a letter from the City of the lending institutions that would allow these anticipated assessments to be used as collateral for any lines of credit or term loans, extended to the management corporations."

This is what LiMandri and DeMaio belive in: taxes that aren't called "taxes," and giving private local powerbroker groups the right to collect and use property assessment taxes as they wish, with no government interference!

With DeMaio, watch out what you ask for. You might get it.

Dec. 6, 2010

This seems to have more than a little to do with KESSLER v. CITY OF SAN DIEGO. Hopefully the hearing on December 10 will clarify the setting of a trial date.

Dec. 6, 2010

I agree, if Scott is lucky Christmas will come early this year!

This case will also have a huge effect on future MAD's which will be THE funding source in our cash strapped City, where neighborhoods are forced to fend for them selves because the City is "stuck" paying "GIFT" pensions that should be reduced by BK Court!

Dec. 7, 2010

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