How Measure E's failure affects San Diego's budget
Add Axios as your preferred source to
see more of our stories on Google.
Photo illustration: Brendan Lynch/Axios; Photo: Daniel Knighton/Getty Images
Measure E, the city of San Diego's one cent sales tax increase for general services, has been defeated.
Why it matters: City officials have been plugging a structural budget deficit with short-term fixes in hopes that an influx of revenue would prevent major changes, but that hope may have run out.
Driving the news: 50.4% of city voters have rejected the proposed tax increase, while 49.6% supported it, as of the latest batch of ballots counted Thursday evening.
By the numbers: Measure E's projected $400 million a year for the city's general fund could have gone to raising employee pay, increasing spending on public safety and infrastructure, or expanding services at parks and libraries.
- The city's independent budget analyst in February projected a $1 billion structural deficit — the shortfall between the city's committed spending levels versus its expected revenue collections — over the next five years.
- That anticipated a roughly $200 million shortfall for the next fiscal year, beginning in July.
The big picture: The city this year relied on one-time revenue fixes to pay for ongoing costs, avoiding service cuts, but maintaining a structural deficit.
- "Carrying an unbalanced budget in the hopes of new revenue made sense, but not anymore," said Michael Zucchet, head of Municipal Employees Association, a white collar labor union that bankrolled the Measure E campaign.
What he's saying: Zucchet said the measure failing with eight months left in the fiscal year lets the city freeze hiring and contracts immediately, spreading the cuts across two years to minimize pain.
- "The voters just told us that they want to remain the city with the lowest sales tax rate in the county and one of the lowest in the state," he said. "The mayor and council need to not do what mayors and councils have done for 30 years, which is think they can shoestring it together."
The other side: Shane Harris, an activist with People's Association of Justice Advocates who opposed the measure, said the region's high cost of living and the city's track record of mismanagement doomed the measure.
- "Voters looked at their pocketbooks, and at the proposal, and said 'I'm not going to get anything.'"
- The San Diego County Taxpayers Association opposed the measure, citing inefficient infrastructure spending and the fact that the tax increase did not have an expiration date.
What's next: Mayor Todd Gloria's budget proposal is due in April.