Whom Does The San Diego County Taxpayers Association Protect?

Over the last 10 years, the San Diego County Taxpayers Association (SDCTA) has issued some curious endorsements with clear conflicts of interest, to say the least. What follows is an in-depth analysis of whether or not SDCTA is really the “taxpayers watchdog” and provider of “unbiased” information to the voters as it claims.

Supporting a $1 billion tax increase in 2008

SDCTA signed onto the 2008 ballot argument encouraging voters in Poway Unified School District to authorize that district to borrow $105 million for school construction at the cost of over $1 billion to Poway’s taxpayers. See “Where Borrowing $105 Million Will Cost $1 Billion: Poway Schools,”  Voice of San Diego, August 6, 2012.

SDCTA’s Conflicts of Interest in 2012, 2014, and 2016

In the November 2012 election, despite an October 17, 2012 email from one construction industry board member pointing out that “there is a clear conflict of interest” on the part of another board member making a motion for SDCTA to endorse that year’s Grossmont Cuyamaca Community College District school bond property tax increase, SDCTA decided to endorse the tax hike anyway.

As a 2013 Voice of San Diego investigation stated:

“A four-month Voice of San Diego investigation into local school bond campaigns, including public records gathered by NBC 7 San Diego, revealed a pervasive pattern: In 13 of the 17 local school districts that have issued bonds since 2006, a significant correlation exists between the major donors to the district’s bond campaign, and the companies that won work on the bond program.”

These same conflicts of interest happened again in 2014 and 2016.  

SDCTA’s Curious Opposition to Citizens’ Plan for Tourism Reform (“Measure D” on San Diego’s ballot)

This brings us to the decision of SDCTA’s board to oppose the City of San Diego’s Measure D, a citizens’ initiative also known as the Citizens’ Plan for Tourism Reform. Measure D is the product of nearly 10 months of extensive negotiations by dozens and dozens of stakeholders from all backgrounds.

Late last week, SDCTA’s board agreed that its political action committee would accept money from hotel owners – the same ones who put forward two illegal taxes that SDCTA endorsed – to be spent by the PAC to defeat the taxpayer protections embodied in Measure D. SDCTA is essentially allowing the hotel owners to launder money in order to block pro-taxpayer reforms.

CalTAN cannot fathom why a genuine “taxpayers watchdog” would ever endorse any tax hike, much less two tax hikes, without voter approval. Likewise, CalTAN cannot understand how a legitimate taxpayer watchdog could ever oppose a citizens’ initiative that would, as its own staff concluded after months of analysis, put “valuable restrictions on the amounts of public funding” for massive public-works projects and allow “no public subsidy” for a billionaire’s sports stadium. (Those are the very reasons CalTAN voted to endorse Measure D; another taxpayer organization, San Diego’s TaxpayerAdvocates.org, also endorsed Measure D and signed the ballot argument in its favor.)

The most powerful faction in the tourism industry consists of the hotel owners, who back in early 2012 exerted their clout to get the City’s politicians, with SDCTA’s endorsement, to approve a nearly $1 billion Mello-Roos tourist tax to expand the convention center without a public vote. An appellate court eventually shot down the tax because it was approved by the hotel owners – rather than the voters, as required by law. Unfortunately, that ruling did not come until after the politicians had collected and spent nearly $20 million.

CalTAN cannot fathom why a genuine 'taxpayers watchdog' would ever endorse any tax hike ... without voter approval.

Later in 2012, the same hotel owners persuaded the same politicians to enact a “Tourism Marketing District” (TMD) tax that collects about $35 million from hotel guests, again with SDCTA’s endorsement and again without a public vote. As reported by the San Diego Union-Tribune on September 13, 2016, the lack of a public vote on the TMD tax has now exposed the City to a class-action lawsuit that could easily cost the taxpayers more than $100 million.

CalTAN endorsed Measure D because it would provide the long-overdue public vote on San Diego’s tourist taxes and provide significant taxpayer protections, such as a limitation on City spending for a convention center expansion and an absolute prohibition against any public subsidy for a professional football stadium.

That’s where SDCTA’s governing board comes in. The organization’s staff spent months analyzing Measure D and wrote a very favorable private analysis, praising the initiative because it “has valuable restrictions on the amounts of public funding that can be used in the construction of a non-contiguous convention center expansion . . . and stadium (no public subsidy), making it potentially worthy of support from SDCTA.” The staff also pointed out that the initiative “creates significant restrictions on elected officials’ use of relevant land by requiring future changes to return to the voters.” Despite these positive elements of Measure D, the staff recommended that the board take “no position” because “SDCTA does not historically weigh in on land use decisions (a significant portion of this proposal).”

But guess what? It took SDCTA’s board less than two minutes to vote to override the staff’s recommendation, the reasons for which (to CalTAN’s knowledge) have never been explained. That vote apparently prompted a disgruntled SDCTA staff member to leak the analysis to one of the attorneys involved in negotiating the terms of Measure D.

Conclusion

So the next time you see SDCTA’s name on something, be sure you read the fine print, search Google for related press reports, and ask yourself how many of the board members stand to gain financially from the position that they are advancing. Because maintaining the organization’s integrity is the board’s highest priority, CalTAN maintains a strict policy against taking positions on policies that would financially benefit any board member and does not take money from potential beneficiaries of matters that come before the board for endorsement consideration. Unfortunately, the same cannot be said about SDCTA’s board.

Editor’s note: This article first published by CalTAN HERE and modified for publication on IVN.