Encinitas considers 1% sales tax measure for November ballot

ENCINITAS — The city of Encinitas is considering a 1% sales tax measure for the November 2024 ballot, weighing the results of a recent survey to determine if a sales tax increase of one cent on the dollar is feasible.

In Encinitas, the combined sales tax rate is 7.75%, one of the lowest in California, and the city does not currently levy a municipal sales tax. General taxes on local ballots require approval from a simple majority of voters.

The survey, conducted by True North Research, asked: “Shall the city of Encinitas’ ordinance establishing a one-cent sales tax be adopted, providing 17 million dollars annually for general government use for 10 years, with citizen oversight, independent audits and all money locally controlled? If the election were held today, would you vote yes or no on this measure?”

For the survey, the market research firm selected random clusters of potential voters throughout the city using age, gender, partisanship, household party type, and sub-geographies, helping ensure a “balanced, representative sample of likely voters.”

The results of three sample ballots showed that approximately 60% of 1,242 survey participants would vote in favor of adopting a sales tax if the measure were on the November ballot, either voting definitely yes (27.2% to 30.5%) or probably yes (30.4% to 33.5%).

The report states that the survey’s overall margin of error is roughly 2.7% at a 95% level of confidence.

Mayor Tony Kranz acknowledged the difficulty of considering a potential tax hike when many families’ budgets are already stretched thin from inflation.

“It’s always a politically challenging conversation to talk about raising revenue because everybody is feeling the pinch,” Kranz said. “That’s the question the council will consider asking voters: whether they spend another penny more per dollar for taxable goods in our city. We live in a beautiful place, but the city’s list of needs is long, and the only thing that keeps them from being addressed is that the revenue we receive only goes far.”

According to the survey, the study’s purpose, other than determining feasibility, was to identify how to create a measure consistent with community priorities and gather information needed for communications and outreach.

Part of the sales tax measure’s funding would be potentially earmarked for city services such as fixing potholes, upgrading aging storm drains and reducing water pollution, the survey said.

The top three changes to improve the city in the survey included limiting growth, development, building heights, addressing homeless issues, and reducing traffic congestion.

Projects and services voters favored were keeping parks, beaches, recreation facilities, community centers, and public facilities safe, clean, and well-maintained at 62.8% and keeping trash and pollution out of lagoons, local waterways, and off beaches at 62%.

The highest positive argument, at 37.8% on the survey, was that “every dime will be reinvested into the community to fund essential services and facilities here in Encinitas; by law, money can’t be taken away by the state.”

The second-highest positive argument (37.4% on the survey) was that the “city’s storm drain pipes, installed 50-plus years ago, are starting to fail, creating sinkholes, flooding that damages streets, and private properties; the measure provides funding to fix storm drains.”

The highest opposing argument (42.1%) was that “residents are already paying too many taxes, state, county taxes, school bonds, other taxes; enough is enough; we can’t afford to keep raising taxes.”

The second-highest negative argument (40.2%) was “there are no guarantees how funds will be spent; the city can divert money to pet projects without any say from voters; we can’t trust the city with tax dollars.”

Positive signs the survey concluded:

Voters value the quality of life in Encinitas and the services they receive from the city but also see room for improvement; solid natural support for a measure to fund city services (61%); popular projects and services; positive arguments resonate; all ballot tests are well above the simple majority (50%+1) required for passage of the general tax, even after opposition arguments.

Challenges the survey concluded included receptiveness to potential opposition arguments (-4%) and electoral climate (hyper-partisanship and statewide initiatives).

The survey concluded that the economy’s trajectory, inflation, and other measures were unknown.

Observations and recommendations the survey concluded:

• Service priorities for survey participants include street and infrastructure repair and maintenance; maintenance and protection of parks, beaches, waterways, and recreation facilities, fire/EMS, 911 response, addressing homelessness;
• City Communications: The city should continue the conversation with the community to build awareness of ongoing needs and consensus on a proposal;
• Independent Campaign: There is a need to have a solid independent campaign to navigate through the election cycle, communicate key messages, turn out supporters, and weather uncertainties.

The key conclusion of the survey asked if a local sales tax measure appeared feasible for November 2024. The survey answered yes, it would be feasible. The survey did not specify if the sales tax would be a general one-cent sales tax on all goods or specific items.

Jordan P. Ingram contributed to this report.