ESCONDIDO — More than a year after voters denied a ¾-cent sales tax increase put forward by the city in 2022, a coalition of police, firefighters, city employees, and local business owners is working to put forward a 1 percent sales tax increase proposal to voters.
The Escondido Citizens for Safety, which includes the Escondido Police Officers Association, the Escondido Firefighters Association, and Teamsters Local 911, is seeking to qualify the initiative for the November 2024 ballot.
The Escondido Community Investment Initiative is led by former deputy fire chief J. Neil Hobbs, Deanna Smith, board chair of the Escondido Chamber of Commerce and owner of Deanna’s Gluten Free Bakery, and Rich Aeling, owner of Aelott Air Conditioning and member of various local civic and charitable organizations.
According to proponents, the city’s financial problems and lack of revenue necessitate a sales tax increase of one cent on the dollar.
“The City of Escondido is facing a financial crisis,” the group said. “Revenue has been unable to keep pace with the growing costs of providing services. Escondido is managing decline instead of charting a path to prosperity.”
The city expects a $10 million average operating budget deficit over the next five years and an $18 million average deficit over the next 20 years.
After closing a $11.3 million budget shortfall earlier this year, staff warned the Escondido City Council that the city’s $59.6 million reserve funds will be gone by 2030 if nothing changes, forcing “deep cuts” if additional revenue isn’t found.
The coalition claims revenue from a sales tax increase would allow the city to better address homelessness, repair and maintain local infrastructure and municipal parks and facilities, prevent cuts to public safety and improve first responder response times.
The coalition submitted its initiative to the city clerk on Jan. 9 and received a title and summary from the city attorney on Jan. 17. According to the city, 7,748 signatures from registered Escondido voters must be gathered in 180 days to qualify for the upcoming ballot.
The city’s current sales tax is 7.75%, which includes 7.25% for the state and a half-cent for the county’s Transnet program. The city receives just 1% of the sales tax. If passed, the new measure would bump the sales tax rate to 8.75% by adding a one-cent sales tax on retail goods in Escondido. The tax increase would conclude after 20 years.
The initiative follows a recent sales tax measure that failed in November 2022, which proposed a ¾-cent sales tax with a 15-year sunset clause.
“The primary difference between these two ballot measures is that the Escondido Community Investment Initiative is being placed on the ballot by a citizen-led group, whereas the 2022 Essential Services Revenue Measure was placed on the ballot by the City Council,” explained City Clerk Zack Beck. “In addition, there is a ¼-cent difference between the two measures.”
According to previously reported projections from the city, Escondido would “stabilize” by pulling in an additional $21.2 million in revenue annually with a ¾-cent measure, but a one-cent sales tax measure could help the city “thrive” under the one-cent measure by bringing in an additional $28.3 million annually.