It’s Time to Take Care of Ourselves--By Voting to Lift the Gann Spending Lid

America’s cities find themselves in the ‘80s being called on to respond to an increasing variety and intensity of needs.

Police work is more demanding and more dangerous than ever. Housing needs are growing. Two-wage-earner families need youth recreation programs. Environmental health concerns tax the abilities and resources that have been available in the past.

At the same time, the ability of cities in California to spend all the revenues they collect--even without any changes in tax rates--is increasingly restricted as a result of the fact that Proposition 4 from the 1979 statewide election is beginning to have a significant impact. The so-called Gann limit provides an inflexible, arbitrary formula for government spending that takes local population growth and inflation into consideration.

The formula establishes revenue received in Fiscal Year 1979 as the base and allows that amount--or limit--to grow according to population growth and a restrictive inflation factor. The formula makes no provision for revenues generated by tourism, since such revenues are not related to an increase in population. Thus, the City of San Diego is limited in its ability to spend increased hotel and sales tax, even though tourism is placing an increasing burden on the city’s services and infrastructure.

Nor does the formula take into account the costs of purchasing the services and materials required to operate and maintain a large city in California. The Gann limit is based on the national inflation rate rather than the higher California inflation rate. Goods and services cost more in California. This fact alone makes it difficult for the city to maintain the current level of service it provides with the revenues it receives. When the Gann limit is applied, the difficulty is compounded. The population increase-national inflation rate formula serves to restrict the increase in the Gann limit to roughly half the expected growth rate of city revenues.

As a result, we are falling behind.

Fortunately--and wisely--the voters left themselves an escape route when they enacted the Gann limit. They said they would reserve the opportunity to decide if and when to relax the limit on a city-by-city and county-by-county basis for short time periods if the case for a temporary waiver of the limit could be made.

So far, eight cities and three counties have taken the case for a Gann limit waiver to their voters. Ten of the 11 made their case and were rewarded with voter affirmation.

San Diego City voters will have the same opportunity this November.

We in San Diego city government believe that we are “making the case” daily for effective performance, fairness, efficiency, fiscal responsibility and accountability.

The ballot measure that will be up in November does not call for any tax increases. It would simply permit the city to utilize those revenues that will be received under existing tax levels from both state and local sources--the sales tax, property tax, hotel room tax, business tax, motor vehicle license fees and the cigarette tax.

Without that authorization from the voters, we will have to cut back on programs and services that people use daily, and we will see our public buildings and public works slip into worse repair. Eventually, we all pay dearly for neglecting or deferring needed maintenance. You know this from your home or workplace.

The waiver requested would be for four years and would allow the city to spend the revenue from existing sources that it expects to collect over that period. This amount is projected to be $160 million between Fiscal Years 1988 and 1991. Our General Fund budget, which supports city operations such as police and fire services, refuse collection and disposal, parks, libraries and street maintenance, is $350 million for Fiscal Year 1988. We expect that our revenue receipts will require a $10 million reduction in this budget if the waiver does not pass.

If the voters do not approve the waiver, those revenues over the Gann limit must be returned to the taxpayers within two years. To date, no equitable method has been designed for achieving this. A decrease in property tax rates provides no benefit to renters, but it may be the only method that is not prohibitively costly or complex.

When you read about “infrastructure” in news stories about our large cities beginning to show cracks and signs of wear and aging, that is what it is about.

San Diego is maturing as a city, just as individuals do as they get a little older.

We have to take better care of ourselves. That’s what this ballot issue is about.