The San Diego City Council unanimously approved a ballot measure Monday which, if approved, would increase the sales tax in the city by 1% per dollar intended for broad infrastructure and city services funding.
"Today, by voting to place a sales-tax measure on the November ballot, the City Council made a courageous, bold move that has the potential to enhance the quality of life for every resident of our city," Mayor Todd Gloria and City Councilman Raul Campillo wrote in a joint statement. "It is an opportunity to address the longstanding shortage of resources that for decades has held our city back and caused our infrastructure like streets and sidewalks and public assets like parks and police stations to fall into disrepair."
Sales tax currently represents the second largest revenue source for the city's General Fund, comprising 18.9% of the total revenue. Proponents say the increase is needed to improve city roads, storm drains, public safety and facilities such as parks and libraries. Opponents, however, said a sales tax hike would make little sense in a time of higher prices and city budget woes.
If the ballot measure passes in the November 2024 election, it would raise the city's sales tax rate from 7.75% to 8.75%. Among the 481 cities in California, San Diego's 7.75% sales tax rate is tied for fourth lowest, a city report found.
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Gloria and Campillo estimate that if the measure is successful, it would generate $400 million annually for neighborhood infrastructure such as streets improvements, storm drains, parks, libraries and services such as public safety.
"This City Council and Mayor have prioritized necessary long-term fixes to our infrastructure rather than band-aid solutions -- and with the voters' approval of this measure, we have the chance to truly double down on this approach," the mayor and councilman's joint statement read. "By working together to pass this measure, we can build a city that not only functions but thrives -- not just for the present generation, but for generations to come."
While the council passed the item unanimously, it did not come without its share of detractors. People speaking at Monday's council meeting reminded the legislative body that sales taxes are seen as some of the most regressive, as they impact lower-income city residents and visitors significantly more than the more affluent.
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According to a city report, $9.25 billion is needed over the next five years to address an infrastructure backlog, and would come with checks to make sure the funds head where intended.
"The proposed ballot measure includes strict accountability, transparency, and oversight to ensure that revenue generated from the Transactions and Use Tax goes directly to essential city services and infrastructure in the city of San Diego," the report reads.
While San Diego went through its Fiscal Year 2025 budget process, service cuts were largely avoided. However, according to the city's Independent Budget Analyst Charles Modica, bigger cuts to projects and services are likely in the future unless the city can secure more revenue -- like that provided by the sales tax increase proposal.
On Friday, San Diego City Council President Sean Elo-Rivera and Council President Pro tem Joe LaCava, announced they were withdrawing a proposed stormwater funding measure, citing "substantial changes" to ACA 1, a proposed state ballot measure which, if approved by voters, would have set the threshold for voter approval of local infrastructure funding at 55%.
