Backers of a proposed San Diego sales tax increase will delay their effort to 2028 to allow time for a more deliberate campaign and to avoid a current wave of anti-City Hall sentiment.
The local construction union proposing the ballot measure said Thursday it has also decided to seek a full-cent hike versus a half-cent one, and to gather signatures and qualify the measure this year for a 2028 vote.
The union — Local 89 of the Laborers’ International Union of North America — has secured funding pledges from other unions for paid signature gathering, which they estimate will cost about $1.6 million.
Local 89 says the measure could have a better shot at passing than a failed 2024 city sales tax measure because it would restrict uses of the additional revenue mostly to infrastructure projects.
Polling conducted by the union suggested a measure focused only on infrastructure would perform better than the 2024 measure, which would have allowed city officials to spend the money on almost anything.
The latest version of the proposal calls for at least 64% of the money generated to be spent only on infrastructure projects focused on water, sewer, flood prevention, street repairs and Balboa Park buildings.
The rest of the money would go mostly to infrastructure — but also to some operations and maintenance costs — for police, firefighters, lifeguards, libraries, parks and vehicle maintenance.
Kelvin Barrios, Local 89’s policy director, said it makes sense to allow some spending on operations and maintenance in those departments because adding new facilities would raise the city’s maintenance costs and need for personnel.
Barrios said he’s been working closely for many weeks with city officials in various departments and the Balboa Park Cultural Partnership to make sure the measure will provide the right kind of funding in the right places.
A small sliver of the money — 2% — would cover oversight and administration of the ballot measure and the revenue it generates, including a citizens oversight committee and comprehensive audits.
Local 89 is choosing a full-cent sales tax hike over a half-cent hike after conducting polls for both.
A full-cent surcharge would be expected to generate a little over $400 million per year.
The measure would allow the city to sell bonds in order to immediately generate billions for infrastructure projects. The money would be paid back over decades from the additional revenue generated by the tax hike.
The city could only sell bonds for infrastructure work in three specific areas: water, sewer and flood prevention, which city officials call stormwater. The city charter prohibits selling bonds for other types of projects, Barrios said.
The latest version of the measure includes a precise formula to govern how the money would be spent.
Flood prevention would lead the way with 31%, or $124 million per year at current sales tax revenue levels. Water and sewer would get a combined 18%, or $72 million per year. Street repair would get 10%, or $40 million per year.
Buildings in Balboa Park would get 6%, or $24 million. But some of that money — about one-sixth — could be spent on grants for programs at the park’s nonprofit institutions.
In the departments where the new money could be spent on infrastructure or operations, the shares would be 10% for police, 9% for fire, 5% for parks, 5% for libraries, 3% for vehicle maintenance and 1% for lifeguards.
Barrios said the money for vehicle maintenance could help pay to replace the city’s Chollas Operation Yard, which can’t be rebuilt or expanded because of environmental hurdles.
He said it’s important to have funding specifically for lifeguard projects because so many city lifeguard towers are crumbling but don’t get prioritized for repairs.
Another key element of the proposed measure is forcing city officials to use the new money to raise spending on infrastructure, instead of just keeping spending levels the same.
It’s been a common city practice to use new funding to replace or supplant existing funding so that the existing funding can be reallocated to another priority.
To prevent this, the proposed measure includes “maintenance of effort” requirements stipulating the city can’t spend less on some specific areas of infrastructure than it did in the ongoing fiscal year, which ends June 30.
Those requirements would apply to all areas except sewer, water and flood prevention.
Barrios said the requirements aren’t needed for sewer and water because they are funded by ratepayers instead of the city’s general fund, eliminating the incentive for city officials to move money around.
For flood prevention, Barrios said the requirements aren’t needed because the city currently spends so little on flood prevention — about $52 million per year, mostly on reactive emergency repairs.
The city already has a more than $5 billion backlog of stormwater infrastructure needs over the next five years. A recent city report said the situation “poses a risk of flooding and catastrophic failure.”
Barrios stressed that the proposed measure is not a finished product and that more tinkering is likely before Local 89 begins signature-gathering, which will likely start in either April or August.
Barrios said supporters could wait until August because signature-gathering efforts for the June and November ballots will be over at that point, making contracts cheaper.
When the City Council is presented with the measure, members will have the option of placing it on the March 2028 or November 2028 ballot. Barrios said he’s unsure of Local 89’s preference.
He said 2028 could be better than 2026, noting that polling by the union showed sharp anti-City Hall sentiment that could subside by 2028.
Typically, a sales-tax ballot measure that restricts how revenue can be spent would require a daunting approval threshold of two-thirds of voters instead of a simple majority — but that’s only if the measure is placed on the ballot by city officials.
Local 89 plans to keep the approval threshold a simple majority by making its effort a citizens measure. That will require the union to gather valid signatures from about 82,000 registered voters within the city limits.
The Local 89 measure is unrelated to a possible November 2026 ballot measure that would increase the countywide sales tax by a half-cent.
It’s also unrelated to a possible November ballot measure being pursued by a group of Balboa Park supporters that would raise property taxes to pay for $1 billion in infrastructure upgrades in the park.
Regarding the city charter and selling bonds, a city hotel tax increase known as Measure C calls for the city to sell bonds to fund upgrades to its waterfront convention center.
Barrios said that violates the city charter, which restricts bonds to water, sewer and flood prevention projects. But the use of bonds was not part of recently resolved litigation against Measure C, so no court has ruled on that issue.