Prop. B: Bonanza or Invitation to Spend?

From the perspective of San Diego County officials, Proposition B poses a simple economic and political question with only one logical answer: Should tens of millions of locally generated tax dollars be spent here, or should San Diego allow those funds to be diverted elsewhere?

“The question is so basic that it practically answers itself,” Supervisor Susan Golding said. “It costs taxpayers nothing more and lets us spend some of the money to which we’re entitled. If we don’t spend that money, some other counties will.”

Some people, however, provide a different answer than the one county officials view as self-evident. Indeed, to opponents of Proposition B, the ballot measure represents simply another attempt to chip away at voter-approved government spending controls, and, despite its being billed as a temporary step, they say it could lead to long-range spiraling budget increases.

‘Time to Start Worrying’

“Whenever a government official says something isn’t going to cost you anything, that’s the time to start worrying,” said lawyer Jack Sanders, president of United Taxpayers of San Diego. “When government spending goes up, in any form, it costs all of us.”

Proposition B, if approved by a majority of voters in the June 7 primary election, would raise the county’s so-called Gann spending limit to enable the county to spend all funds generated by taxes and state grants. In November, voters in the city of San Diego approved a similar proposition by a razor-thin 50.2% majority.

Without the waiver, the Gann limit, a statewide measure approved in 1979 that restricts government spending under a formula based on population growth and the inflation rate, could reduce county revenues by at least $8 million annually and preclude the county from taking advantage of about $35 million in state revenue for courts, county administrators say.

In essence, the Gann limit’s existing cap on expenditures would require the county, now operating under a $1.1-billion budget, to spend less money than would be available through tax revenue and other sources. Combined with related financial problems, the limit could produce an expenditure gap of $46.4 million next year and a $161.8-million shortfall over the next five years, according to county projections.

With the county facing the prospect of being unable to spend millions of tax dollars and other revenues, Supervisor John MacDonald describes Proposition B as the only “way that we can survive in the short term” without severe budget cuts in services ranging from mental health and seniors’ programs to crime-prevention projects and staffing in county parks.

No Increase in Taxes

Fearful that the measure could be misinterpreted by voters, county officials have gone to great lengths to emphasize that the ballot proposition would not increase taxes, but rather would simply allow the county to spend funds created by existing taxes and available through other sources.

“We’re not asking for more money--we only want to be able to spend what’s available now,” Golding said.

Under Proposition B, the existing Gann ceiling would be adjusted for the next four years to allow the county to spend “an amount equal to the . . . proceeds of existing local taxes and available state subventions.” The proposition specifies that those funds would be spent “in support of essential public services, which include but are not limited to public safety, health care, children and family services, senior care, parks and recreation and public facilities.”

The waiver’s narrow scope and four-year limit, supporters contend, present voters with a no-lose proposition: At no added cost to themselves, millions of dollars more would be available for vital public services now strained by budget constraints.

Because voters’ approval would be needed to extend the waiver beyond 1992, supporters argue, Proposition B is consistent with both the letter and the spirit of the original Gann measure, which allowed for temporary voter-passed adjustments.

Opponents, however, question whether the waiver will prove to be temporary, arguing that the county inevitably will become dependent on the additional revenue, making post-1992 budget cuts considerably more difficult to achieve.

Extension Predicted

Having grown accustomed to the added spending flexibility, they predict, county officials will be disinclined to scale back when the waiver expires and instead will seek to extend it by presenting voters with an even bleaker picture of the alternative.

“The reality is, once government spending goes up, it’s awfully difficult to bring it back down,” said United Taxpayers’ leader Sanders. “If we get four years down the road and times are tough, it would be harder to live within a smaller budget. That’s why it’s better to not start spending more in the first place.”

In an era of tight budgets, county officials acknowledge, they cannot rule out the possibility that another Gann waiver might be necessary in 1992. But they hope that that possibility will not undermine support for this year’s proposal.

“When you’re looking at reducing mental health services by 20%, closing parks, reducing children’s services and making some of the other cutbacks we’d have to make without (Proposition) B, we can’t refuse to take action just because of something that may or may not happen in four years,” said David Janssen, the county’s assistant chief administrative officer. “Because, if we do nothing now, the only guarantee is that, in four years, things will be much worse.”

But opponents warn that Proposition B would seriously weaken the Gann limit’s effectiveness in controlling government spending. By authorizing a higher spending ceiling, they say, the proposition also alleviates pressure on county officials to search for greater budget efficiencies.

“Apparently our county supervisors haven’t the backbone to tell the special-interest groups that there is some limit as to how much the taxpayers will pay,” opponents argue in the sample ballot booklet mailed to registered voters. “Thus these politicians need our ‘backbone’ in the form of the Gann limitation.”

‘Can’t Restrain Itself’

Similarly, former San Diego City Councilman Fred Schnaubelt, one of the few local officeholders who supported the original Gann measure nine years ago, argues that voters would be financially penalizing themselves by raising the spending limit.

“Government can’t restrain itself, so the voters have to,” Schnaubelt said. “There’s no question in my mind that government would spend 100% of what people earn if given the chance. Government has an insatiable appetite for more, so you’ve got to hold the line. This proposition is a move in the wrong direction.”

Supporters, however, regard such arguments as a rhetorical smoke screen designed to obscure the fact that Proposition B would not raise taxes, but would simply “untie the county’s financial hands” in the allocation of existing tax revenues.

Unless the spending limit is raised, for example, the county would lose the $35 million in state funding for courts, because those funds would put the county over the current budget ceiling. The state funds, in turn, would enable the county to use the $35 million in its own general revenues now being spent on courts for other discretionary programs that otherwise could face cutbacks.

The absence of a higher spending cap also would curtail the county’s expenditure of any funds it might eventually receive as a result of lawsuits it has filed against the state concerning alleged inequities in the distribution of property taxes and other revenues.

2nd-Lowest in State

San Diego’s per-capita allocation of general revenues was the second-lowest of the state’s 58 counties during the 1985-1986 fiscal year, leading to a $132-million shortfall, and county officials also contend that San Diego received $72 million less in property tax revenues than the statewide average that year.

Described by Golding as “one of those good-government issues that usually don’t arouse much excitement,” Proposition B has attracted relatively little public attention, partly because it has been overshadowed by Proposition A, a proposed half-cent sales tax increase that would raise about $1.6 billion for new jails and courtrooms.

“I doubt that the average person is even aware there’s a campaign,” Golding conceded.

But, although voters may have only a cursory awareness of the race, both sides agree that its outcome will touch them in a much more direct and tangible way.