San Diego has billed itself as “America’s Finest City” for decades. Yet, today San Diego stands on the brink of bankruptcy. Twenty-five years of Republican stewardship have created a city that is broke and broken, needing over a billion dollar to remain solvent and billions more to repair its crumbling infrastructure.
Decades of mismanagement by acolytes of the Reagan Revolution have left San Diego with the new reputation as “America’s Cheapest City.”
The San Diego Union Tribune chronicles the financial collapse of America’s eighth largest city in a feature report in its Sunday edition.
“We’ve had a culture in this town for years of, ‘Don’t tax me,’ ” said Steve Erie, a political science professor at the University of California San Diego. “It’s one of the things that got us in this mess. Taxes are the third rail of recent San Diego politics. Touch it and you’re dead, yet someone has got to step on the tracks.”
Although the roots of this anti-tax culture go deep in the sandy coastal soil, San Diego is the double victim of the Reagan Revolution of late 1970s and early 1980s. The most obvious impact of Ronald Reagan’s tenure as governor of California was his legacy legislation, Proposition 13, passed by voters after Reagan left office, with his enthusiastic support.
The secondary fallout of the Reagan era was the ascendancy in San Diego of a Republican leadership structure fully supportive of every one of Reagan’s bogus fiscal schemes. While Ronald Reagan was pushing to reduce government revenue on the state and then the national level, a generation of San Diego politicians were following in his footsteps, at least rhetorically.
Starting with Pete Wilson and extending through recently resigned, Wilson protégé, Dick Murphy, San Diego has been led by a collection of anti-government, anti-tax, Chamber of Commerce boosters, who have never been able to muster the required political nerve to place hard choices before the voters.
City leaders seldom demonstrated any courage in addressing the financial shortcomings of the San Diego system. Massive population growth and private development combined with low unemployment, extensive military spending and rapidly expanding tourism to allow civic leaders to avoid tough decisions.
While the leaders of other California cities found ways to pay for public services and improvements, San Diego’s leaders avoided placing even the most basic financial requests before voters.
Not only would city leaders fail to muster the courage to ask San Diego residents to pay for trash collection, they would also fail to take any action that might cause the San Diego business community any financial discomfort.
Of course, with the city spending more than it was collecting, the money had to come from somewhere. With city politicians unable to tell voters that they couldn’t afford city services and, with those same politicians unwilling to address additional revenue streams, the only option left was to start taking money from the city itself.
With the need to cover $1.4 billion to restore the money taken from the city’s pension system, continue to provide public services and find more than the more than $3 billion required to repair and upgrade its worn out infrastructure, it is hardly a surprise that the question of bankruptcy is a major issue in the city’s current mayoral campaign.
The city’s bond rating is below the “junk” level, so additional borrowing isn’t feasible. If the real estate bubble bursts, or even just leaks a bit, city revenues will decline to a level that will force either wholesale cuts in services, massive tax and fee increases or bankruptcy. Still San Diego politicians can’t muster the courage to face tough choices.
San Diego isn’t an isolated incident. It is an object lesson. What Republicans did in San Diego is what they are doing on the national level. Tax cuts without commensurate reductions in government services. Government funded by borrowing money collected for retirement benefits. It’s the same pattern and it’s cut from that same old cloth.
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