Bevy of Tax, Fee Hikes in Offering for San Diegans

San Diegans face the prospect of sizable tax and fee increases as the San Diego City Council today considers $119.7 million in new revenue-generating proposals that City Manager John Lockwood says are needed for fiscal year 1991.

Imposition of property tax increases totaling $156 a year for a $150,000 home, a new 5% utility users’ tax on businesses, and a new $90 annual trash collection fee for homeowners are some of the ways that Lockwood is proposing to cover just part of a large budget deficit and the council’s demand for several new expensive projects and programs.

Lockwood described the city’s budget plight as the worst in 56 years, since the 1933-34 fiscal year, and significantly more difficult than the budget cutting necessitated by the passage of Proposition 13 in 1978. Because of population growth, it will take an additional $66 million in fiscal 1991 just to keep city services operating at present levels, he said.

Without new revenue sources, budgets will “get progressively worse, unfortunately,” said Pat Frazier, the city’s director of financial management. “The base upon which our revenues are built is not sufficient to keep up with our growth.”

But some council members said they are not ready to start loading the June ballot with tax increases at such an early date in the city’s budget process, especially without reviewing possible budget cuts.

“I’m not willing to put those things on until such time as we’ve taken a look at the budget,” Councilman Ron Roberts said.

Councilwoman Judy McCarty said that she is willing to ask voters to repeal a 1919 city ordinance mandating free trash collection because the move will promote trash recycling, but “other than that, I don’t know what I’m going to do tomorrow.”

Lockwood also wants the council to ask the public to waive the Gann spending limit to allow as much $700 million more in spending during fiscal years 1991 through 1994. The city’s current Gann waiver runs out July 1, 1991.

Some of the revenue proposals require only the council’s approval, while others need either majority or two-thirds support of the public on the June ballot for enactment, according to a report from Lockwood to the council.

But Mayor Maureen O’Connor wants to place all of the proposals on the ballot, regardless of whether the council has the authority to enact them itself, said her spokesman, Paul Downey.

“Anything where taxes are going to go up, she wants to give (voters) a menu kind of a format where people are able to pick and choose what they’re willing to pay for,” Downey said.

Even if Lockwood’s total package is approved, about $99 million in identified city needs will be unfunded next year, and one controversial new program will be far short of the funding approved by the council.

That program is the Housing Trust Fund for the poor, which the council conceptually approved in December at $54 million annually. Lockwood is suggesting that the program, designed to generate housing and housing subsidies for low-income city residents, be financed at $13 million next year via imposition of new development fees.

Lockwood also is looking for a state grant to provide the $4 million needed to build a new city jail for people arrested on misdemeanors.

The report includes several other potentially sizable tax and fee increases not currently being recommended, some because they require further study. Among them are fees for parking at city beaches, a utility users’ tax for residential customers, an increase in the city hotel tax and a new assessment district to pay for citywide lighting and landscaping needs.

Lockwood’s proposal includes:

- A special tax to beef up the city’s police force to two officers per thousand residents. The measure would raise property taxes by $54 per every $100,000 of assessed valuation in fiscal 1991, $100 in 1992, $152 in 1993, and $155 in 1993.

The $23.7 million proposal for 1991, which includes $6.2 million that would go to the county to pay for probation officers and other costs, requires approval of two-thirds of the electorate.

* A $44 per $100,000 of assessed valuation tax increase to generate $20 million annually for the city employees’ pension fund. The tax could be enacted by council vote.

* A $6 per $100,000 valuation property tax increase to generate $25 million needed to expand the Police and Fire Departments’ communication system. Two-thirds of the voters would have to approve the general obligation borrowing.

* Repeal of the People’s Ordinance of 1919, which mandates free trash pickup for anyone who brings their trash to the curb, and imposition of a $7.50 per month trash pickup fee that would generate $25 million annually. Single-family homeowners, who make up about half of the city’s 435,000 dwelling units, receive the free trash pickup, but residents of most apartment and condominium complexes, where trash is thrown in dumpsters, already are paying a fee.

* $13 million in new commercial development fees for the Housing Trust Fund.

* A new $5 million gross receipts tax on business that could be enacted with council approval.

* A new 5% tax on commercial and industrial users of electric, gas, telephone, cable TV, water and sewer utilities. The council could enact the measure.