Monday, April 06, 2015

Class War in San Diego?

Councilmember Gloria Attacks Business Community’s Use of Referenda to Reverse Progressive City Legislation


Copyright © 2015 by Mark Gabrish Conlan for Zenger’s Newsmagazine • All rights reserved

San Diego City Councilmember Todd Gloria

Out of all the issues facing San Diego — ensuring livable incomes and affordable housing, fixing the city’s infrastructure, restoring cuts in city services, expanding the Convention Center, keeping (or not keeping) the San Diego Chargers in town — City Councilmember Todd Gloria named “reforming the referendum” as the most important political concern when he spoke March 26 at the predominantly Queer San Diego Democrats for Equality in Hillcrest. He admitted that to most of his audiences, this is pretty much insider baseball — “mostly when I talk about this issue, the group is pretty uninitiated,” he said — but he stressed that the achievements of the hard-won Democratic City Council majority are at risk from Right-wing business interests who can spend hundreds of thousands of dollars on referendum campaigns to get them reversed.
The referendum is the flip side of the coin from the initiative, which far more Californians are familiar with because it’s the source of the long lists of propositions that frequently clutter up the state’s ballots. The initiative allows citizens to write their own laws, overriding elected legislatures, if they can get enough signatures to put them on the ballot and get a majority of voters to cast ballots for them. The referendum allows voters to overturn a law already passed by a legislature. If the referendum organizers get enough signatures to put a law on the ballot, the legislature that passed the law in the first place has two options. Either they can repeal it themselves, or they can put it before voters — and if the voters choose to override their representatives’ decision, out it goes.
Along with the recall — the ability of voters to circulate a petition to get rid of a sitting elected official and have another election to replace them — the referendum and initiative were originally added to the California state constitution as part of Hiram Johnson’s reform movement in 1912. Back then, they were sold as ways for citizens to attack the power of well-financed special interests in general, and the Southern Pacific Railroad in particular, to control the political process through campaign contributions. But Gloria and other opponents of the referendum argue that this original purpose has been turned on its head; now, most of the referenda being pushed in San Diego and elsewhere in California are being pushed by big corporations and developers to reverse progressive legislation that might cost them money.
“It really reflects a lot of what Senator [Elizabeth] Warren and others are talking about,” Gloria told the Democrats for Equality. “It’s really a separate set of rules for wealthy folks. We’ve seen that in the tax code and in various different things, but to see it in our democracy that if you cannot get the outcome you want through the normal legislative process, if you have a couple of hundred thousand dollars, you can purchase the result you’re looking for.”

A Tool for the 1 Percent

The transformation of the referendum and initiative from tools to control the 1 percent to strategies used by the 1 percent has been going on for decades, especially as getting measures on the ballot has itself become a major business — and a source of quick money for homeless and other economically marginalized people, who can circulate petitions and make from $2 to $12 for everyone they get to sign. But the current spate of corporate referenda in San Diego really began in November 2010, when a Democratic-majority City Council passed a law aimed at controlling the expansion of Walmart and other large big-box stores. Fearful that Walmart would crush local businesses and damage the city’s economy, the Council overrode Republican Mayor Jerry Sanders’ veto of a bill that would require an “economic impact review,” as well as an environmental impact review, before the Council could approve such stores.
Walmart reacted with both barrels blazing. According to Gloria, who wrote the economic-impact law, they spent up to $2 million to circulate a referendum to put it on the ballot. “At the time,” Gloria told the Democrats for Equality, “the city’s ordinance said the election had to be called within 90 days” of the County Registrar of Voters’ certification that the referendum had enough valid signatures to qualify. With no regular city election scheduled for 2011, the cash-strapped city would have had to spend $3.4 million just to have an election on Walmart’s referendum. So Gloria joined seven other Councilmembers and voted to repeal his own ordinance because “there was no way I could justify spending that kind of money” on a special election, especially a low-turnout one in which Walmart could vastly outspend the ordinance’s supporters, appeal to more conservative voters and likely win anyway.
At the time, Walmart’s local opponents in the small-business community and organized labor were hopeful that their problems would be solved at the state level. Then-State Senator Juan Vargas, a former San Diego City Councilmember, pledged to introduce a bill that would impose the economic impact review requirement on big-box superstores statewide. He got it through both houses of the legislature, but Governor Jerry Brown vetoed it — and Walmart began building superstores all across California, including one in Sherman Heights that wiped out an historic farmers’ market and caused a number of small businesses in the neighborhood to close even before Walmart moved in, so sure were they that the giant chain would destroy them financially.
Walmart’s success in getting the city to back down from an ordinance that would have put the brakes on their expansion plans in San Diego led other businesses to copy the strategy. Jerry Sanders, the Republican mayor who had vetoed the economic-impact bill in the first place, was hired as president of the San Diego Chamber of Commerce after he was termed out of the mayoralty, and under him the Chamber became aggressive at using referenda to impose their will on the city and thwart the efforts of a Democratic Council to hold businesses accountable.
In the face of referenda, the Council bailed on at least two other pieces of legislation, one to raise the fees developers are required to pay the city to fund affordable-housing programs and one to regulate medical marijuana dispensaries. The latter backfired on the dispensaries, Gloria told the Democrats for Equality. “It hurt patients,” he said, because the Council ultimately passed “a more restrictive ordinance” than the one the dispensaries had challenged by referendum.

Barrio Logan Loses Its Plan

But, according to Gloria, the issue that most vividly showed how the referendum has become a tool of “the wealthy versus those who are not” was the battle over the Barrio Logan Community Plan in 2014. “We spent millions of dollars and years updating the community plan for Barrio Logan,” Gloria told the Democrats for Equality.”All of that just went up in smoke when you basically had three defense contractors decide that it wasn’t to their benefit. So they were able to purchase the result they weren’t able to get from the City Council. … They spent money and got signatures telling people a whole bunch of lies, like about how the Navy was going to leave San Diego.”
Gloria, who was serving as interim mayor at the time following the resignation of Bob Filner, brought the Secretary of the Navy to assure voters that the Navy wasn’t going to abandon San Diego if the Barrio Logan Community Plan was passed. Supporters of the plan went to court to stop the referendum organizers from having their signature gatherers lie to voters to get them to sign — and the judge ruled that they indeed had lied, but they had a constitutionally protected right to do so and so the referendum qualified for the ballot. In the June 2014 election, voters overwhelmingly rejected the Barrio Logan Community Plan on the basis of a six-figure TV ad campaign that repeated all the lies the referendum supporters had told to get the petition on the ballot.
“It really just comes down to money,” Gloria told the Democrats for Equality. “If you have enough money, you can get this other result. People talk about ‘this is about the citizens having the right to petition the government,’ and I just say, ‘Baloney.’ If the roles were reversed, does anyone in this room seriously believe that the residents of Barrio Logan could marshal the hundreds of thousands of dollars necessary to overturn the City Council’s action? No, of course they couldn’t. And that’s exactly what we’ve seen time and time again.”
The next referendum campaign to get on the ballot in San Diego is to repeal the proposal Gloria pushed through the City Council when he was its president to raise San Diego’s minimum wage to $11.50 per hour. The original proposal was for a $15 per hour wage, but that got talked down first to $13.09 and then to $11.50 after owners of small businesses — real small businesses — convinced Gloria they couldn’t support $13.09 but would be O.K. with $11.50. This time, however, the plan ran afoul of the San Diego Chamber of Commerce, which organized a political action committee called the “Small Business Coalition” to sponsor a petition drive to qualify a referendum to stop the minimum wage increase.
What the Councilmembers and public supporters of the minimum wage increase didn’t know until after the referendum qualified was that the so-called “Small Business Coalition” had only two bona fide small businesses among its members. “The rest were the big hotels, the National Restaurant Association, the National Franchisees’ Association,” Gloria told the Democrats for Equality. “Big lobbying groups spent hundreds of thousands of dollars to delay the minimum wage. What I thought was really ironic was that we got reports that they were paying up to $12 a signature to defeat a $11.50 per hour minimum wage. I mean, this is insane. But they’re business folks, right? Ultimately they looked at it and made a business decision that it would cost them more actually to increase the minimum wage than to spend a couple of hundred thousand dollars to delay it.”
The not-so-small businesses in the “Small Business Coalition” have already delayed the minimum wage increase until June 2016, when it goes on the ballot, and it’s anybody’s guess whether San Diegans, faced with a major TV and direct-mail ad blitz and with a history of economic conservatism at the ballot box, will vote for it. Meanwhile, as veteran San Diego political reporter Matt Potter wrote in the April 1 Reader (, the San Diego Chamber of Commerce has quietly put the “Small Business Coalition” out of business now that it has served its purpose.

When Elephants Fight …

Meanwhile, San Diego is seeing another no-holds-barred referendum fight over a planned development in Carmel Valley called One Paseo that has the distinction of having big-money interests on both sides. The developer of One Paseo was a company called Kilroy Realty Corporation, and once their plan got through the City Council on a 7-2 vote (with Gloria one of the Councilmembers who voted for it), a supposedly grass-roots organization called “Protect San Diego’s Neighborhoods” arose to start a referendum petition to block its construction. Only it turned out that “Protect San Diego’s Neighborhoods” was largely funded by Donahue Schriber, a rival developer who owns a shopping center next to One Paseo and developable land nearby.
Schriber, worried that his land would be less valuable if One Paseo were built, launched a referendum drive and got current City Council President Sherri Lightner, San Diego County Supervisor Dave Roberts, and San Diego Community Planners Committee chair Joe LaCava to appear at the press conference announcing the campaign. Once the “Protect San Diego’s Neighborhoods” signature gatherers hit the streets, however, Kilroy fought back. They launched an advisory petition to support keeping the San Diego Chargers in town, allegedly to hire so many signature gatherers that the anti-One Paseo forces couldn’t find people to circulate their own petition. Kilroy also sent out 27,000 postcards to people who’d signed the anti-One Paseo petition asking them to take back their signatures.
The anti-One Paseo referendum is currently before the San Diego County Registrar of Voters, whose staff have the unenviable task of figuring out not only how many signatures are invalid for the normal reasons (like people not being registered to vote at all, or not being residents of the city of San Diego) but also how many people who signed the petition originally used Kilroy’s postcards to take their names off. This rare spectacle of seeing big-money interests on both sides of a referendum campaign recalls the ancient proverb, “When elephants fight, the grass gets trampled.” It also puts the two most prominent Gay male elected officials in San Diego, Todd Gloria and Dave Roberts, on opposite sides.
Gloria’s proposals to reform the referendum process are modest, largely because most of the rules regarding referenda are set by the state constitution. “But there are two things we could do locally that I think would be really meaningful,” he told the Democrats for Equality. “Number one is with regard to disclosure. … As candidates for elective office, we have to disclose who’s contributing to our campaigns. Towards the ends of our campaigns those disclosures have to be on a 24-hour basis.” Gloria said “the same rule should prevail” for referendum campaigns, especially since they only have 30 days to collect the estimated 33,000 signatures needed to get on the ballot.
“At least give the citizens the information,” Gloria told the Democrats for Equality. “You can choose to sign it or not, but if you’re being told that this is being sponsored by small businesses when it’s really just Fortune 500 companies and big corporate CEO’s, maybe that would make a difference in the decision-making process of those who are asked in front of Trader Joe’s or Ralph’s to sign this.”
Another change Gloria would like to see in the referendum process is to allow the elected officials whose decisions are being challenged by referendum to be in the room at the Registrar of Voters’ offices when the signatures are being validated. “Currently, only the people who are proponents of a referendum can be in the room,” Gloria explained. “I’m not allowed to be in that room to say, ‘That signature does not match the voter record. I challenge that one.’ There’s no one there on the opponents’ side to represent that point of view. I don’t think that’s fair; I don’t think that’s right. We need to change that.”

SDG&E Encourages Climate Change

Gloria fielded audience questions on various other issues facing the city, from the huge gap between the need to fix its infrastructure and the money available — “at least $3 billion, probably more like $5 billion … far larger than the pension debt,” Gloria explained — to the prospects for a new Chargers stadium (the current proposal, he said, is for a $1.4 billion stadium of which the Chargers and the National Football League are committed to only $200 million each, leaving a $1 billion shortfall they’re expecting the public to pay), the status of the Balboa Park Centennial and the condition of the park’s rose garden.
But the issue that most engaged him besides the referendum was yet another case of a giant corporation trying to sabotage one of the progressive issues Gloria pushed through the City Council when he was its president. That was the city’s historic plan to reduce greenhouse-gas emissions and other sources of human-caused climate change. This time the culprit is San Diego Gas & Electric (SDG&E), whose new proposal to restructure electric rates would actually penalize people for using less energy.
Currently, Gloria explained, “SDG&E has four different tiers of charges. The lower your tier, the less you pay. If you have your lights on all the time, you pay more; that’s tier 4. They’re arguing to collapse it into two tiers instead of four, and make it so there’s not as much differential between the two tiers.” What’s more, Gloria said, SDG&E also wants to impose a flat “base fee” of $5, later raised to $10 (“and if you believe it stays at $10 I’ve got some beautiful properties somewhere in Florida to sell you,” Gloria joked), on all customers, no matter how much they use.
“Pretty much everyone in my Council district will end up paying more,” Gloria said, “because we have smaller homes, we’re closer to the coastline, and most of our homes aren’t particularly air-conditioned.” He added that when he asked an SDG&E representative what the impact would be in his district, the SDG&E rep said “roughly 70 percent of my constituents in Old Town are in tier 1” — and therefore they’d be hit by the “base fee” and the higher rates from collapsing the tiers. What’s more, the SDG&E rep couldn’t or wouldn’t give him a straight answer when Gloria asked just what that arbitrary “base fee” was for.
SDG&E’s rate proposal now goes before the California Public Utilities Commission (CPUC), which is supposed to regulate utility rates but over the last two decades — especially since the appointment of former Southern California Edison (SCE) CEO Michael Peevey as its head — has acquired a reputation as a rubber-stamp for whatever utilities want to charge. The CPUC is currently in a state of flux as Peevey resigned following allegations that he received favors from utility executives.
Gloria tried to get the City Council to approve a resolution not only asking the CPUC to vote down SDG&E’s rate proposal but to ask SDG&E themselves to withdraw it. He had Council support for the resolution to the CPUC, but several Councilmembers balked at the idea of a government agency actually making a request to a private corporation to change a business decision. The Council passed the watered-down version 7-2, but Gloria and former Mayoral candidate David Alvarez voted against it because they didn’t think it went far enough.
“I don’t understand how this was substantive,” Gloria told the Democrats for Equality. “I don’t understand why we couldn’t ask SDG&E, our franchisee — we provide them a franchise to do this in our city — to ask them that. I didn’t see any harm in doing that, and I still do the head-scratcher as to why that happened.”