Proposition A: Is It Key to the County's Survival?

Times Staff Writer

If Proposition A causes San Diego County voters to experience deja vu in November, it will not be because their minds are playing tricks on them. Opponents, though, might argue that the measure's backers are trying to play a nasty trick on voters.

Only several months after voters narrowly defeated an identical proposal in last June's primary, San Diego County officials have launched a second attempt to temporarily increase county government's annual spending limit.

Convinced that the measure's defeat last spring stemmed more from voters' misunderstanding of its intent than opposition, proponents, armed with the same arguments but with a new aggressive strategy, hope to reverse the outcome this time by persuading voters that Proposition A is a painless way of alleviating the county's fiscal woes. It would not, they emphasize, increase taxes, but rather would help the county to obtain its "fair share" of local tax dollars and state revenue.

Backlash Predicted

But opponents, infuriated by the county supervisors' decision to place the measure back on the ballot after voters had rejected it, predict a backlash at the polls against what they characterize as an attempt to circumvent the public's will. From their viewpoint, the ballot measure represents simply another attempt to chip away at voter-approved government spending controls that, despite being billed as a temporary step, could lead to long-range spiraling budget increases.

"This unparalleled arrogance in ignoring voters' decision is a politician's version of, 'Let them eat cake,' " said Dick Rider, vice chairman of the San Diego County Libertarian Party. "They're obviously going to keep hammering away until voters cave in. If it loses this time, they'll probably try again."

"It's an imperial attitude that says to voters, 'Unless you agree with the rulers, you're wrong,' " added lawyer Jack Sanders, president of United Taxpayers of San Diego.

Insisting that county leaders "aren't trying to ram this down anyone's throat," Board of Supervisors Chairman George Bailey argues that, given the closeness of the vote in June, the board had no choice but to try again to win approval for the temporary spending limit waiver. When it appeared on the primary ballot as Proposition B, the proposal was defeated by a 51.1%-48.9% margin, 214,938 votes to 205,891.

"With it that close and with this meaning so much to so many people and services, we'd be negligent in our duties if we didn't put this back on the ballot," Bailey said.

Proposition A, if approved by a majority of voters Nov. 8, would raise the county's so-called Gann spending limit to enable the county to spend all funds generated by taxes and state grants. Last 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 $2.2 million this year and preclude the county from taking advantage of nearly $25 million annually in state funds for courts, county administrators say.

Would Lose Money

In essence, the Gann limit's existing cap on expenditures would require the county, now operating under a $1.3-billion budget, to spend less money than would be available through tax revenue and other sources. If the limit is not waived, the county would be required to return any excess local tax dollars to San Diegans within two years, either in the form of a direct rebate or via reduced tax or fee rates. County officials emphasize that, at current tax levels, that rebate would equal only a dollar or two per person.

Combined with related financial problems, the Gann limit could produce an expenditure gap of about $20 million this year and a $179-million shortfall over the next four years, according to county projections.

With the county facing the prospect of being unable to spend millions of property tax dollars and other revenue, Supervisor Susan Golding describes the proposition as "the only way we can even keep our head above water" without having to annually repeat the severe budget cuts made this summer in services ranging from mental health and seniors' programs to crime-prevention and child-abuse projects.

"Without this, we're frozen to mediocrity forever," Bailey said, pointing out that San Diego already spends about $485,000 a day less than the average of other California counties--a disparity that local officials attribute to Sacramento's inequitable allocation of local tax dollars. While property tax dollars are collected locally by counties, the proceeds are forwarded to Sacramento for statewide disbursement. And, as Bailey wryly notes, "Our tax dollars go north just fine, but then they seem to have trouble finding their way south back to San Diego."

Fearful that Proposition A could be misinterpreted by voters, county officials have gone to great lengths to emphasize that it would not increase taxes, but rather would simply allow the county to spend funds generated by existing taxes and available through other sources. A one-page flyer being distributed by proponents twice stresses: "Proposition A would not increase your taxes one dime!"

"We're not asking for more money--we only want to be able to spend what's available now," Golding says. "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."

That critical point was lost or obscured, Proposition A's supporters believe, in last spring's campaign--or, more properly, non-campaign. Preoccupied with another June proposition calling for a half-cent sales tax increase projected to raise $1.6 billion for jails and courts--a measure that narrowly passed, 50.5%-49.5%--county leaders focused their efforts on that proposal while giving only cursory attention to the proposed Gann waiver.

With the opposition also not having enough money to mount an organized campaign, primary voters were largely left to sort out the somewhat esoteric fiscal issue for themselves, creating a vacuum that supporters feel was fatal to the measure's chances.

"When you use words like Gann and taxes and appropriations in the same sentence, people get a little wary," said Bruce Boland, county deputy chief administrative officer. "It was perceived as a tax increase, when in fact nothing is farther from the truth. But it's one of those issues that leads to a lot of confusion."

In support of that theory, Proposition A backers note that nearly 20,000 fewer votes were cast on the Gann waiver than on the sales tax proposition that immediately preceded it on the primary ballot. That 5% dropoff, they believe, is proof of a political axiom that holds that voters are likely to skip over or vote against measures that are confusing or unfamiliar.

Determined not to repeat the same mistake, county officials this time have organized a coalition of political, business and civic groups--among them, the Chamber of Commerce, United Way, the League of Women Voters and the Area Agency on Aging--to press for the measure's passage. In addition to campaigning before dozens of community and social organizations, the Committee for a Fair Share-Yes on A group also hopes to raise about $150,000 to send out mailers to voters.

From the perspective of county officials and other supporters, Proposition A 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?

Two Simple Points

"We have two real simple points to get across: Prop. A means no new taxes, but more money for San Diego," said Leonard Zanville, a member of the Yes on A group. "Once people understand that, they see how much sense this makes."

The Gann limit has unfairly penalized San Diego in two major ways, Proposition A supporters claim. First, it is based upon 1979 spending patterns, a time when county leaders argue that they were displaying considerably greater fiscal restraint than local officials elsewhere in the state. In addition, while annual adjustments based on population growth and inflation are permitted, that formula does not adequately compensate rapidly growing counties such as San Diego where cost-of-living increases typically outpace statewide and national averages.

"We started off with a much lower base than other counties and because of the way that the limit is computed, the gap widens every year," Boland explained.

Under Proposition A, 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 A is consistent with both the spirit and the letter 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.

Bleaker Picture

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.

"Once politicians have their hand in your pocket, they don't like to take it out," said United Taxpayers' leader Sanders. "I can hear all their gloomy talk now. In four years, they'll try to act like they'd have to shut down the government if this (waiver) isn't continued."

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.

"If we do nothing now, the only guarantee is that, in four years, things will be much worse," said David Janssen, the county's assistant chief administrative officer.

But opponents warn that Proposition A would seriously weaken the Gann limit's effectiveness in controlling government spending. By authorizing a higher spending ceiling, they say, the proposition also reduces 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 that will be mailed to registered voters. "Thus these politicians need our 'backbone' in the form of the Gann limitation."

Opponents also describe Proposition A as a continuation of a trend in which, in Rider's words, "the county does less and less but wants to spend more and more." As evidence, he cites the special half-cent sales tax to fund jails and courts that was approved in June, as well as another half-cent sales tax passed by voters in 1987 to finance road and mass transit improvements.

"Even with reduced responsibilities and getting more money to do fewer things, the county still says it can't live within its budget," Rider said. "I'm sorry, but it's difficult to feel very sympathetic when they ask for more."

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

The 'Gann Gap'

Unless the spending limit is raised, for example, the county could lose the $25 million a year 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 $25 million in its own general revenues now being spent on courts for other discretionary programs that otherwise could face cutbacks. By 1992, those court funds, combined with other local and state revenue available to San Diego, could produce an annual "Gann gap" of about $55 million, according to Stan Riggin, manager of the county auditor's revenue and budget division.

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.

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.

"We're already being shortchanged millions and millions of dollars by Sacramento, but if we win these lawsuits, we couldn't even spend the money because of Gann," Bailey said. "That shows the ridiculous position we're in."

Although they agree on little else, the two sides in the Proposition A debate concur on one thing--namely, that the issue is, to use Boland's apt description, "not exactly a grabber . . . with a lot of sex appeal."

Indeed, even with supporters' more visible campaign this fall, the measure is likely to be overshadowed by higher profile candidate races and other propositions, notably those dealing with the politically volatile growth issue.

"We know that we're in a terribly tough campaign . . . because there are so darn many items on the ballot that the public is starting to throw up its hands in frustration in saying, 'I can't figure it out,' " sighed lawyer James Mulvaney, chairman of the Yes on A steering committee. "We've got a lot of competition in trying to get out our message."

Opponents, though, regard supporters' expressions of concern over voter confusion or frustration because of the crowded ballot to be disingenuous and self-serving. And, despite again having no campaign treasury and being forced to rely solely on news stories and their ballot arguments to reach voters, opponents profess confidence that voters will, as Sanders put it, "know everything they need to about this" when they vote on Nov. 8.

"This 'You'll get something for nothing' argument (proponents) are using is a powerful one, because it hides that what this comes down to is government wanting to spend more of our money," Sanders said. "But people understood that last time and I hope they will this time. We've got people's common sense working in our favor. . . And if we do beat them again, maybe the county will be too ashamed to try a third time. But I wouldn't bet on it."

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