Convention center initiative gives glimpse into the future

Even if the city of San Diego never collects a dime in new hotel taxes under Measure C, the initiative may still leave its mark across the region for years to come.

The process and the politics engaged in by supporters of the initiative likely will be copied in subsequent efforts to make it easier to raise taxes for government — by going outside government.

In the case of Measure C, courts will decide whether voters in March 2020 actually approved an increase to raise hotel taxes to finance an expansion of the waterfront convention center, homeless programs and road repairs.

The ballot proposal appeared to fall short, even though 65.24 percent of the voters supported it. At the time, the stated threshold for approval was a twothirds majority. For decades, near-universal interpretations of California law held that 66.7 percent was needed to pass local taxes for specific purposes.

Not long before the election, at least one judge ruled that only a simple majority was needed to raise taxes through a “citizens’ initiative,” one placed on the ballot through the signature-gathering process — which is how Measure C got there. If a government body, such as a city council, put the proposal directly before voters, a two-thirds majority would still be required.

Now, three California appellate courts have backed simple-majority approval. More than a year after the election, the San Diego City Council on Tuesday declared Measure C had passed and directed City Attorney Mara Elliott to file

what’s called a validation lawsuit to determine if that will stand.

Measure C supporters, of course, hoped to win a twothirds majority, but the initiative was designed for this very scenario.

About a decade ago, the city took action to allow for an increase in hotel taxes to expand the convention center. The tax was struck down by an appellate court because it wasn’t approved by a public vote.

The move to put the latest proposal on the ballot by petition, rather than council action, came as court rulings were trending toward the simple-majority requirement.

Officially, Measure C was a citizens’ initiative. In reality, it was a hotel industry initiative, a labor union initiative, a chamber of commerce initiative and, yes, a government initiative all in one.

It also was a proposal backed by many, but notably

not all, advocates for the homeless and housing, though the measure had to be massaged to bring some of them on board. Modifications also were made to attract union support.

Representatives of all those interests were involved in crafting the proposal and the campaign to pass it. A grassroots initiative this was not, though clearly it had broad public support.

That’s not to say there was anything wrong with that, nor to suggest there was anything illegal.

Citizens’ initiative is the label for a process. It does not describe, or limit, who can take part. Government officials can be involved, though as private citizens, and not through the authority of their office. The distinction might be lost on the public.

That’s a tricky, arm’slength dance, to be sure. Some San Diego city officials, especially then-Mayor Kevin Faulconer, were kept apprised of how the ballot measure was being shaped, and their views were made known to the drafters.

Measure C may have been drawn up outside City Hall, but now its fate will be determined through municipal legal action financed with taxpayer money.

That was among the concerns of council members on the losing end of Tuesday’s 6-3 vote. One of them, Sean Elo-Rivera, said the proponents of Measure C should be pursuing the legal case if they so choose, not the city.

Mayor Todd Gloria, who supported the council action, said the city can bring a case more quickly than the outside backers of the hotel tax. There may have been another unspoken factor: cost. The hotel industry, the big financial supporter of Measure C, has been devastated by the coronavirus pandemic, though there’s lots of optimism that tourism will rebound.

Putting the merits of the tax increase aside, EloRivera said the council had no business declaring something had passed when it didn’t achieve what voters were clearly told was needed

for approval.

Last April, the previous City Council pointedly did not officially confirm Measure C had been defeated, a move that in theory might help future litigation.

“My vote today is about the integrity of our democratic process,” Elo-Rivera said Tuesday, a sentiment echoed by other council members and some public speakers during the hearing.

Some supporters of the council’s decision point not only to growing legal precedents, but what they consider to be the inherent unfairness of the two-thirds threshold. In most elections, winning 65 percent of the vote is a massive landslide.

Even if the courts don’t retroactively affirm that Measure C passed, it may not be too long before the California Supreme Court rules in favor of simplemajority approval for tax initiatives by petition, at least moving forward. The justices have signaled twice they may be headed in that direction, though they have

not issued a definitive ruling.

There’s no shortage of groups that would launch an initiative, or team up with government officials to do so, to fund government projects they support if the lower approval threshold applies. Who is actually driving the effort may be irrelevant as long as the roles are within legal bounds.

Whether such a collaboration could come together to pass transportation taxes in San Diego County will no doubt be considered. The San Diego Association of Governments has been eyeing a sales-tax increase to finance a decadeslong regional transportation overhaul that could top out at nearly $200 billion. The San Diego Metropolitan Transit System also has considered a sales tax.

Even with a simple majority, raising taxes is no sure thing. The purpose for it needs to be popular — such as transportation and housing — and a broadbased coalition may be essential.

San Diego County voters have approved TransNet sales taxes twice, in 1987 by simple majority and in 2004 when two-thirds was required.

In November, the Measure A $900 million housing bond, to be paid off with a property tax increase, received 57.6 percent of the vote. That’s big support, but nearly 10 points below the two-thirds needed. (The simple-majority court rulings would not change the supermajority required for bond measures.)

Even a controversial transportation sales-tax increase — a different Measure A in 2016 — gained 58.4 percent of the vote despite misrepresentations of how much money it would raise.

The failure of other revenue-increasing measures over the years helped give San Diego County the reputation of being a tax-averse region.

Like it or not, legal and political trends suggest that may change.