October 31, 2004 - From the October, 2004 issue

November Election In San Diego Brings Critical Issues Of Solvency And Trust To A Head

With the November 2 election rapidly approaching, and with the current deluge of political advertisements and endorsements, it can be hard to determine how specific measures will affect specific areas in the region. This month, MIR is plased to feature an interview with Steven Erie, professor ot Urban Studies at UCSD. In this interview, Erie discusses how a series of proposed measures, and several political races, will affect San Diego County -- and the region -- as a whole.


Steve Erie

Steve, most people in the country think the November 2nd election is all about choosing a President, but those in San Diego know that it is also a critically important local election for Mayor and City Attorney. Why has the San Diego city election, which not too long ago looked to be uneventful, turned into a contentious, competitive and important election for San Diegans?

We're experiencing a fiscal meltdown in once-conservative San Diego. For over ten years, there has been chronic underfunding of the city pension system, coupled with major increases in pension benefits. Something had to give. San Diego, now dubbed "Enron by the Sea," is over $1 billion in arrears. I had thought that after last year's disastrous Cedar fire, disaster preparedness would be the major issue in the mayor's race. But the burning issue has turned out to be the pension crisis, which also features a federal investigation of whether local officials deliberately misled bond investors about the city's financial condition.

In the race, incumbent Mayor Dick Murphy is battling County Supervisor Ron Roberts, who appears to be leading. Fire unpreparedness brought Roberts into the fray; the pension issue has given his campaign real traction. And there is a last-minute wild card entry. Councilwoman Donna Frye, an environmental activist and pension critic, has thrown her hat into the ring as a write-in candidate. In a city now leaning Democratic, Democrat Frye has a fighting chance against her two Republican opponents.

Well, just for those who appreciate this contest, I gather the winner of this election need only have a plurality of the votes cast.

This is a runoff election, where only a plurality is needed, which has a brand new political dynamic. Donna Frye entered with the blessing of organized labor. And Angelenos know the value of labor endorsements and voter mobilization. Successful write-in campaigns are not unheard of in San Diego; 20 years ago local Congressman Ron Packard won as a write-in. Frye is immensely popular, even with Republicans, because of her strong environmental stance, fiscal prudence, opposition to huge public subsidies for new sports stadiums, and demand for open, accountable government.

Steve, what are the defining challenges that any local leader in San Diego must confront when elected?

Well, San Diegans are deeply committed to quality of life and amenities. Our parks program is second to none, for example. But in general, we don't spend much money on essential public services like police and fire. "Taxes" is still a four-letter word here. Yet, neighborhood services are severely compromised by inadequate funding. Scarce resources are a problem for any San Diego mayor, liberal or conservative. The pension crisis and ensuing federal investigation are Swords of Damocles over City Hall. A festering corruption scandal is another leadership challenge. Several councilmen face possible removal from office for allegedly accepting money to relax strip-club rules.

Clearly, Southern California's jewel is being tarnished right now by a burgeoning pension crisis, corruption scandals, and federal investigations. Pension and policy promises made may not be kept. The day of fiscal reckoning finally has arrived.

Some have asserted that the underfunding of the pensions resulted from decisions a decade or more ago when the city's administration cooked the books to fund the 2000 Republican National Convention in San Diego.

Well, we've inherited the legacy of one of San Diego's most competent but controversial city managers, Jack McGrory. But, there's a deeper structural problem at work here: Proposition 13 and successor initiatives. These have fiscally strapped local governments and made local revenues uncertain. One result has been a perilous game played in San Diego over how to bulk up the pension system, and siphon off so-called "surplus" into the general fund. In the 1990s, San Diego officials became masters of financial "ledgerdemain," betting on Wall Street to fund a burgeoning pension liability as well as surplus diversions. Generous pensions also reflected the growing power of organized labor in city politics. We normally think of San Diego as a weak labor town. But labor has become an increasingly potent force, particularly the police and fire unions. Police and fire represents half of the general fund budget. Union endorsements are eagerly sought by local candidates. Critics claim that when the unions say "jump," local officials ask, "how high?"

But, Steve, will you confirm or reject the rumor that the public policy decisions that led to the underfunding of the pensions were the product of a Republican city council, Republican mayor, and the city manager of San Diego?

The underfunding began under Republican mayors and council majorities, but has continued under a Democratic majority council. All of this has occurred under the city's antiquated 1931 city manager system, where the mayor is only one of nine council members without budget authority or a veto. Despite San Diego's reputation for fiscal conservativism, fiscal prudence has succumbed to bipartisan re-election fever.

There are other ballot measures on the same ballot in November which deal with the City's Charter and reform of local government. Please describe the most serious of these and their prospects.

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Proposition F proposes a five-year trial of the mayor-council form of government found in most big cities such as Los Angeles. The process of getting this on a ballot was the opposite of the recent L.A. experience. There were no elected or appointed citizen commissions. Instead, an informal group of civic, business, and academic leaders worked on the proposal for 18 months. Initially, Mayor Murphy was opposed to changing the city charter. He liked the council-manager system until he got into political trouble this year. Then he became a born-again reformer, finding it easier to blame the current city manager system for San Diego's woes. The mayor skillfully shepherded the initiative through the city council, and it is on the November ballot. Its chances, though, remain uncertain, given strong business and media backing but opposition from labor and civic groups for its alleged pro-Establishment "back room" birth.

Steve, San Diego has been viewed for more than a decade as one of the jewels of urban/suburban California. What's at stake with this election going forward, with respect to the city's ability to maintain its reputation as a prosperous, livable collection of neighborhoods and communities?

In terms of livability, we have countywide initiative Proposition A, which is an extension of the earmarked sales tax for another forty years for billions of dollars in regional transportation projects. It needs a two-thirds voter majority, and its prospects are highly uncertain. It's being battered from both the right-conservative county supervisors and developers who want more highway money-and the left-environmentalists unhappy with the regional transportation planning agency and its project priorities. If defeated, the sales tax earmark can next appear on the 2006 ballot before it terminates in 2008. But critics on both sides will be emboldened by a defeat, and there is a real risk that in 2008 there will be no sales-tax money at all for transportation, whether highways or public transit, with resulting degradation in our treasured quality of life.

And the city's decades-long effort to site a new airport, what's the status of those plans?

In terms of airport planning, while we have identified several sites for a new international airport to replace small, inadequate Lindbergh Field, everything seems to be on hold until the 2005 round of military base closings. The most promising sites such as Miramar now are being used by the military. And there are powerful local voices-many in our congressional delegation and among environmentalists and NIMBYs-opposed to any or all of the potential sites. Realistically, our only option may be to expand Lindbergh Field, with its single 9,400 foot runway and cramped 525 acre site.

If you're a General Manager of a city department or agency in San Diego, at this moment in mid-October, what are you thinking vis a vis the upcoming election?

If I am a city official, I'm thinking about the mayor's race and the huge fiscal uncertainties created by the pension crisis. If I am a county official, I'm also beginning to worry about growing pension liabilities. Given the historic reluctance of local voters to support raising taxes, I am reduced to answering the question: "How am I going to be able to tighten my belt and weather the next couple years?"

Have any predictions on the result?

You mean in terms of the mayor race? It's certainly going to be close, and insurgent Councilwoman Frye has a chance for an upset win. And there also is a historic race for City Attorney. Populist crusader Mike Aguirre, who has taken on Padres owner John Moores, and filed lawsuits against the Padres and Chargers is favored to win against Leslie Devaney, the termed-out incumbent's handpicked successor. Amazingly, the conservative San Diego newspaper has bowed to the inevitable, and endorsed Aguirre. Aguirre promises to end corporate welfare and go after white-collar crime. If both Frye and Aguirre win, this will signal real regime-change in San Diego.

Fascinating, but perhaps not consistent with your pleas over the last few years that San Diego take full responsibility for its own infrastructure. Is such investment by the city now out of the question?

That's right. I think critical infrastructure decisions are on hold right now given the ferment generated by these hot races and issues. Today, the infrastructure debate is mostly about Prop. A, the earmarked sales tax extension for transportation projects. Airport development is on hold until next year. As for San Diego's dream of water independence, the binational aqueduct deal with Tijuana is all but dead. Desalination appears to be the new panacea, as long as MWD provides subsidies.

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