FOR IMMEDIATE RELEASE

April 1, 2005

Contact:
Kristine Norquist
San Diego Regional Chamber of Commerce
(619) 544-1381 or knorquist@sdchamber.org

(San Diego, CA) --Today the San Diego Regional Chamber of Commerce and a group of local business community leaders announced their opposition to the proposed Living Wage Ordinance and called for an immediate end to fiscal irresponsibility at City Hall.

The Living Wage Ordinance, formally opposed by the Chamber’s board of directors on February 26, 2004, is scheduled to be heard at the April 12 City Council meeting. The ordinance would require the City of San Diego’s service contractors and subcontractors to pay their employees $10.00 per hour and provide health insurance covering the employees and dependent children. City employees would not be affected by the ordinance, which would be phased in during the 2006-2007 fiscal budget.

“The City’s current fiscal problems were caused in part by this same type of act now, worry about the economic impact later mentality,” said Jessie J. Knight, Jr., Chamber President and CEO. “It would be irresponsible, and possibly in violation of the City Charter, to write a check now for something we don’t know the full cost of and may not be able to pay for tomorrow. That’s not just business sense, that’s common sense.”

“Delaying the implementation until 2007 would not make it more sensible or affordable,” Knight, Jr. added.

The City of San Diego is facing deficits of $1.37 billion in its pension fund and an estimated $500-$900 million in its retiree health program as well as an estimated $50 million general fund budget deficit.

“Adopting a policy without an accurate assessment of its costs, without an identified funding source and without benefit of a crystal ball to forecast what future budgets will look like is simply not responsible,” said John Hawkins, 2004 Chairman of the Chamber’s board of directors.

While the City Manager’s office has stated that the long-term costs of the ordinance are not known, their most current report, dated April 2004, estimated that the implementation of the ordinance has the potential to increase the city’s costs by up to $6 million annually. Final analysis of other categories could increase that amount.

While city employees would be exempt from the ordinance, there is no mistaking the fact that the impact on the city’s budget would potentially be great. City service contractors and subcontractors could be forced to look for other, non-city contracts and work with municipalities who do not mandate wage increases. Those who do participate in city contracts would likely be forced to pass additional costs on to the City of San Diego, and ultimately the taxpayers, in the form of increased costs for providing services.

Knight, Jr. stressed that to impose the burden of this mandate to future budget years and add to the deficit, with no identified funding source, would only add to the city’s long-term financial instability, something akin to gambling with taxpayer dollars.

The Chamber’s board of directors believes it would be fiscally irresponsible for the City Council to consider this ordinance without fully understanding its costs. The City of San Diego needs to get its fiscal house in order before writing checks without knowing if they will have the cash in the account to cover the obligation.

“Discussions and decisions at City Hall must be driven by the process--not politics--with the collective goal of doing what is in the best interest of all residents and for the future of the City of San Diego,” said Knight, Jr.


Participants included:
--Jessie J. Knight, Jr. - President & CEO, San Diego Regional of Commerce
--Lisa Briggs - Executive Director, San Diego County Taxpayers Association
--Doug Sawyer - Past Chairman, San Diego Regional Chamber of Commerce
--Nikki Clay - Partner, Carpi & Clay