SOURCE: San Diego Regional EDC

San Diego Regional EDC

October 13, 2010 19:28 ET

San Diego Regional Economic Development Corporation Votes Support for Proposition D; Will Work for Repeal if Reforms Not Enacted

SAN DIEGO, CA--(Marketwire - October 13, 2010) -  The San Diego Regional Economic Development Corporation (EDC) Board of Directors overwhelmingly voted today to support Proposition D, the City of San Diego's five-year, half-cent sales tax, but also voted to work for its repeal in 2012 if the City does not implement the recommendations of the Citizens' Fiscal Sustainability Task Force.

In supporting the temporary sales tax proposal, the Board cited the analysis and conclusions of the Task Force:

  • The financial condition of the City of San Diego is dire -- requiring $150 - $170 million a year ($900 million over five years) -- from some combination of spending reductions or new revenues to achieve structural balance.
  • Achieving balanced budgets is unlikely to occur from spending reductions alone.

It was noted that none of the opponents of Proposition D has advanced a plan to address the at least $150 million in annual cuts or reforms that would be required without Proposition D.

EDC Board members applauded the Mayor and City Council for adopting by resolution three important measures of reform recommended by the Citizens' Fiscal Sustainability Task Force:

  • Enactment of operational reforms, efficiencies and other budget reductions that produce an average annual savings of $73 million below the Mayor's Five-Year Financial Outlook as presented in April 2010, as verified by the Mayor, Independent Budget Analyst, and Independent City Auditor.
  • For the duration of the collection of the temporary one-half cent sales tax, implementation of a spending freeze that permits service restorations above those enacted in the fiscal year 2011 budget and consistent with the Mayor's Five-Year financial Outlook as presented in April 2010, that cumulatively costs no more than $20 million per year, adjusted annually for inflation, as verified by the Mayor and Independent Budget Analyst.
  • For the duration of the collection of the temporary one-half cent sales tax, adoption of budget discipline which ensures that, in the event of any future one-year temporary budget surplus, a minimum of 50% of such surplus will be utilized to either fund General Fund-related reserves and/or pay down General Fund debt, while any remaining surplus may be expended on critical infrastructure requirements or important one-time expenditures that do not impact future budget year expense run rates.

Debra Reed, Chair of the EDC Board of Directors, said, "San Diegans owe the Citizens' Fiscal Sustainability Task Force a great debt of gratitude for the hundreds of hours of work that, for the first time, laid out a plan that can restore the City's health. We commend the Mayor and Council for responding so favorably and quickly to these reforms."

EDC Policy Chair Gordon Carrier thanked the Citizens Fiscal Sustainability Task Force for their critical contribution to bridging the City of San Diego's fiscal problems: "By placing a specific dollar figure on the reforms we must demand before taxes are increased, we can now hold our elected leaders accountable for reform before new taxes."

To further hold the Mayor and City Council accountable for enacting the reforms recommended by the Task Force, the Board also voted to champion voter approval of a ballot measure to remove the tax in 2012 should these measures of accountability not be met.

The San Diego Regional Economic Development Corporation is a business organization supported by more than 150 of San Diego's largest employers. The group strengthens San Diego's business climate and maximizes its economic success through two key programs, Business Development and Policy. EDC's business development program supports significant corporate outreach and retention, while nurturing emerging industries and attracting new corporate investment through targeted marketing initiatives. The policy program is focused on creating a competitive business climate for the region through workforce development initiatives, including Pre-K and math and science education programs, and building the infrastructure -- housing, water, energy and transportation systems -- to support 21st century industries.

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