☆ Opinion on Measure E reallocation: A decision of fiscal risk, not ideology

In this Opp Now exclusive, Tobin Gilman chimes into the ongoing debate on whether SJ Council should direct funds primarily toward short- or long-term supportive housing projects. Whereas some like Khamis and Holtz posit the Measure E reallocation stemmed from “competing visions” about housing, Gilman says it was much simpler: all about consequences for our General Fund.

Although there were some differences in allocation percentages for emergency interim housing and permanent supportive housing, there really is no philosophical divide. The mayor and council have all made it clear they are in full agreement that both are important.

The debate was over numbers. When evaluating the budgetary implications for each type of housing, the council focused heavily on the impact each type would have on the city’s General Fund. That’s the source of funding for core services such as police, fire, parks, libraries, and infrastructure maintenance.

During the council deliberations, the city budget director noted that unlike permanent supportive housing, ongoing operating expenses for “quick build” units are financed through the city’s General Fund and that within the next few years, the mayor’s proposed allocation could cost up to $60 million per year. These are perpetual liabilities, and there is no guarantee that future Measure E tax collections will be sufficient to cover those costs. That was underscored during the council deliberations when the mayor signaled his intention to campaign for a new regional housing tax in the near future.

Metrics that reflect future financial risk tied to uncertain funding for fixed liabilities are super important. The city is still recovering from a similar problem with underfunded pension liabilities that reared their ugly head over a decade ago. Although the worst of that fiscal crisis appears behind us, it’s worth noting that next year’s budget for SJPD is actually lower than this year in inflation-adjusted dollars. The council decided, wisely in my opinion, that the Davis–Cohen compromise was the most fiscally responsible of the three proposed paths.

Read more perspectives on the Measure E reallocation from local real estate agent Mark Burns, former councilmember Johnny Khamis, and SCC Libertarian Party secretary Brian Holtz.

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