Back in March, I wrote a column for the Union-Tribune about San Diego’s “twin tax troubles” that criticized both the city’s controversial trash fee increase as well as the decision by the City Council to pursue a “vacant house” tax. Fortunately, in a welcome display of sanity, both issues have been resolved favorably for taxpayers.
The proposed vacant house tax was particularly odious. It proposed an initial annual tax of $8,000 on more than 5,000 homes unoccupied for more than half a year — plus a $4,000 surcharge for corporate-owned dwellings. In subsequent years, the tax would increase to $10,000, with the surcharge going up to $5,000.
Although there remain many ballots yet to be counted, early returns from Tuesday’s election showed the tax being trounced. Voters were persuaded that it was unlikely to achieve its stated objective of increasing housing availability and that it was on shaky legal grounds. (A similar tax in San Francisco was invalidated by a Superior Court as both unconstitutional and pre-empted by state law.)
More importantly, although proponents claimed that the revenue from the vacant home tax would be used to address the city’s housing shortage, the fine print revealed that it was a general fund tax that could be used for any purpose. Given the lack of trust by voters over city spending of public funds, the rejection of the tax was hardly surprising.
That lack of trust on the part of San Diego taxpayers was exacerbated by the residential trash fee fiasco. In a two-step act of deception and dissembling, city leaders in 2022 first proposed a change in the 100-year prohibition against trash fees on single-family homes. (As in many cities, trash collection was historically financed by the city’s general fund.) Measure B estimated that the fee would range from $23 to $29 per month but, even at that modest amount, Measure B barely passed with less than 50.5% of the vote.
Measure B was not itself an approval of a trash fee, merely an authorization for the city to propose a rate structure for trash collection. But rather than proposing trash rates along the lines of what the city previously represented to voters, the city initiated a rate increase process that would have meant trash fees nearly twice that amount.
City ratepayers were outraged. Had the city submitted the rate increase proposal to the voters, it would have failed and, because of that, opponents of the fee hike, led by former Mayor Kevin Faulconer, began collecting signatures to repeal it via the local initiative power.
What made the threat of repeal credible was the fact that, as a proposed rate reduction, the initiative could qualify for the ballot with significantly fewer signatures than other local initiatives. Proposition 218, sponsored by the Howard Jarvis Taxpayers Association and adopted by voters in 1996, provides that the people have the right to use the initiative power for the purpose of “reducing or repealing any local tax, assessment, fee or charge.” This applies to “all local governments.” Further, “neither the Legislature nor any local government charter shall impose a signature requirement higher than that applicable to statewide statutory initiatives.” That requirement is just 5% of the total votes cast for governor, in that local jurisdiction, in the last general election.
Considering the near-certain success of qualifying the rate reduction initiative, along with a lawsuit challenging the fees, the city of San Diego read the writing on the wall and settled its litigation in exchange for the withdrawal of the initiative. It wasn’t a perfect deal, but taxpayers will save about $80 million over the next several years.
The San Diego Union-Tribune editorial page, which reports regularly on city leadership malfeasance, opined that, “Trash settlement shows San Diegans can fight City Hall.”
For voters, the two taxpayer victories in a large, center-left city, should provide some hope. Not only in San Diego but statewide, taxpayers are pushing back against government interests which seek only to grab more money from our pockets. The desire for accountability for their tax dollars is not a Republican or Democratic ideal but something all taxpayers have a right to expect.
Coupal is president of the Howard Jarvis Taxpayers Association.