Anti-TOT groups organize funds, campaign staffs

Issue begins to reflect broader tension in city politics

By SCOTT LEWIS

City Hall critic Carl DeMaio -- whose rhetorical battle with San Diego city leaders has raged for months -- promised to put his money where his mouth is and spend up to $100,000 of his own funds to defeat a measure that would increase the city's hotel-room tax.

DeMaio heads the Performance Institute, a public interest consulting firm, and two other companies: Performance Events, a meeting planner, and the consulting firm American Strategic Management Institute, which he said have a combined annual revenue of $10 million.

DeMaio said he would try to raise an additional $150,000 from sympathetic donors to also fund a "voter education campaign" to outline the policies of City Council, city attorney and mayoral candidates.

The expenditure may be one of the largest single investments in a campaign for or against one of the slew of local measures that have a spot on November's ballot.

If he follows through on the promise, DeMaio's could be counted as yet one more group funding efforts to squash the increase to the city's transient occupancy tax, or TOT, that so far has not inspired anyone to organize in its favor.

If approved, the ballot measure would boost the tax on visitors staying in hotel rooms to 13 percent of their bill per night compared to the 10.5 percent they pay now.

Almost all of the preliminary opposition to the increase in San Diego's has, until now, come from groups who might support it if it came up at either a different time or in a different way.

DeMaio said, however, he hoped to kill it not because it didn't set aside money for tourism industry interests or because it potentially conflicted with other measures on the ballot, but because of a simple principle.

"It's throwing good money after bad," he said.

DeMaio's opposition to the TOT increase will combine with the efforts of the San Diego Lodging Industry Association, or LIA, which has formed the campaign group The Committee to Save Jobs. LIA has hired the public relations firms Porter Novelli and CynKat Communications to help defeat the measure. Both candidates for mayor -- incumbent Dick Murphy and County Supervisor Ron Roberts -- oppose increasing the tax, as does the San Diego County Hotel-Motel Association.

While San Diego's politically influential firefighters union was expected to endorse a ballot argument in favor of the tax increase -- which was due Thursday -- nothing more than rhetoric was promoting it.

"There really isn't any campaign in support of TOT at this point. In terms of mounting a campaign, that decision hasn't been made yet," said Jennifer Tierney, the firefighters' independent political consultant, who is also working on Murphy's re-election campaign.
In fact, though firefighters supported the last attempt to increase TOT in March, it was LIA and hotel industry leaders who provided most of the financial support -- up to $750,000 for the campaign. The measure garnered more than 50 percent of the votes cast but fell short of a two-thirds support threshold required by state law to enact special taxes.

A recent court ruling gave city leaders the go-ahead to put another measure on the ballot that would only require it to receive support from a simple majority -- 50 percent plus one -- to enact the law.

The City Council voted 6-3 in favor of placing the measure on the ballot -- with the mayor and Councilmen Brian Maienschein and Jim Madaffer opposed. The mayor's office confirmed that, while he is still opposed to the measure, he has no plans to campaign against it.

"We are still counting on his opposition," said Mike McDowell, LIA's executive vice president.

The mayor's opposition to the measure would seemingly come in conflict with the support for it advanced by not only other members of the City Council, but City Manager P. Lamont Ewell as well.

Ewell said the city needs additional revenue to cover public safety equipment needs, such as firefighting equipment, and to make up for some of the stress placed on the budget by agreements to fully fund the pension system.

Bringing in new revenues would help the city with its credit rating as well, Ewell said. The TOT tax increase would bring in an estimated $28 million extra each year.

"It would certainly assist us in demonstrating to the rating agencies that we were looking for new revenue options," Ewell said.

Top on the list of priorities to which the council could direct new revenues from the tax increase would be an aging communications system used by the city's police and fire departments that officials say is obsolete and on the verge of failing completely.

"There just isn't enough room to purchase these items and also meet the daily needs of the city. So, consequently, we have had to defer a number of those needs," Ewell said.
He said he was "disappointed" with tourist industry groups who were beginning to organize against the measure.

"I differ with them on the issue of whether this would have an negative impact on tourism," Ewell said.

He did not respond to DeMaio's charges, however, that the city was wasting money it already had.

"We want to stop the hemorrhaging," DeMaio said. "When you defeat TOT, you really do force reform and force them to look at what they're spending money on."

DeMaio said one of the reasons for setting up his campaign committee, San Diego Citizens for Accountable Government, was to let people see where his money was coming from. He said a press conference was being organized for September to announce his group's positions on other ballot measures as well.