SAN DIEGO—The San Diego City Council July 22 unanimously approved a ballot measure which, if approved, would increase sales tax in the city by one percent 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 percent of the total revenue.
If the ballot measure passes in the November 2024 election, it would raise the city’s sales tax rate from 7.75 percent to 8.75 percent. Among the 481 cities in California, San Diego’s 7.75 percent sales tax rate is tied for fourth lowest, a city report found.
According to the California Department of Tax and Fees Administration, a little over 10 percent of the California cities and counties have tax rates of 7.25-7.5 percent; about 20 percent of cities and counties have tax rate of 7.75 percent; and the rest have tax rate higher than 7.875 percent, up to 10.75 percent.
Mr. Gloria and Mr. Campillo estimate that if the measure is successful, it would generate $400 million annually for neighborhood infrastructure such as street 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’s 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 July 22’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.
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 they are 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 July 19, 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 percent.
