San Diego’s unemployment rate, at 7.4 percent, is still too high. We need to promote policies that create jobs and declare San Diego as “open for business.”
Every day leaders in our region compete with other cities and states to attract the best and brightest companies to move to San Diego or expand their businesses here. In the midst of these efforts, the San Diego City Council will soon be voting on what will be as high as a 900 percent tax increase on the same job creators we are trying to get to come to San Diego – a jobs tax.
Better known as a linkage fee, this is a tax on all nonresidential development, applied on a per-square-foot basis, to pay for affordable-housing projects. For example, if a business wants to develop 3,000 square feet of manufacturing space, it would pay a tax on every square foot.
This tax is based on the absurd assumption that every job created in San Diego will increase the need for affordable housing. This idea is backward. It’s an unsubstantiated but convenient claim for advocates in search of more funding. The truth is that job creation can actually decrease the need for affordable housing.
The city of San Diego is already at a disadvantage in attracting employers because it’s the only municipality in the county that uses linkage fees to finance affordable-housing projects. What would prevent companies, both large and small, from building in Chula Vista or Poway to avoid this jobs tax if it is increased by up to 900 percent? It would become much more expensive for small businesses to add space to accommodate more employees.
More than 50 organizations representing tens of thousands of employers in the region have come together to oppose this tax increase. This tax will impact small-business creation disproportionately and will inhibit redevelopment in large parts of the city that desperately need reinvestment. In addition, the current proposal calls for indexing the tax for future increases without approval of the City Council.
The San Diego County Taxpayers Association (SDCTA) opposes any action to permit tax increases without a vote of our elected officials because they remain accountable to taxpayers.
SDCTA is calling on all San Diegans to express their opposition to an increase in the jobs tax to their council member. The city should be encouraging job creators and business owners to move and expand here, not penalize them with onerous and burdensome taxes — especially when the tax is based on irrational logic.
Cate is vice president of the San Diego County Taxpayers Association.