A legal decision on whether the city can increase a tax on hotel rooms without holding a public vote will take at least one year, and could be longer, City Attorney Jan Goldsmith told KPBS Television’s Evening Edition.
The tax increase—up to 3 percent for some hotel rooms—is meant to raise $13 million a year to fund an expansion of the San Diego Convention Center.
Under Proposition 13, any new tax in California must be approved by two-thirds of voters. But city officials hope to avoid that public vote by limiting those who vote on the tax to only hotel owners.
Goldsmith said that method “tests the boundaries of the law,” and that he will not let the city begin work on the Convention Center expansion until its legality is resolved.
“I’m OK with my client testing the boundaries of the law, but we’re not going so far as to collect taxes and start building,” he said.
Instead, Goldsmith said he would file a so-called "validation lawsuit" in May about the plan. That suit would allow a Superior Court judge to rule on the proposal.
When a similar validation case occurred in San Jose, it took a year to resolve, Goldsmith said—and that was without opposition to the proposal.
In San Diego, Goldsmith said he expects opposition.
Although Goldsmith said he is not saying now that the plan to avoid a public vote is illegal, he is also not guaranteeing it is legal.
“We’ve been very clear that this is one of those maybe issues,” he said. “It’s unclear.”
“There’s an easier way to do it,” he added. “We’re not saying this is illegal, we’re saying it’s a maybe and we’re willing to test it. But if you want something that’s reliable and legally reliable, then you go to the people like any tax under Proposition 13.”
Steve Cushman, a business leader and head of the effort to expand the Convention Center, told Evening Edition last month he believes the hotel owner-only vote is “100 percent legal.”
“Obviously there will be a validation action that the city has said that they will do, so everybody will have an opportunity go to court and someone in a black robe will say ‘yes it’s OK,’ or ‘no it isn’t,’” Cushman said. “We believe that it will hold up, and that it will hold up in court.”
Goldsmith said Cushman’s “100 percent legal” characterization surprised him.
“I’ve been getting this feedback—and I don’t want to pick on Steve—around town that this is a done deal, and we have never said that,” Goldsmith said. “From day one we’ve said, ‘hey there’s a Proposition 13 issue here.’”
