The Coast News Group
Solana Beach sales tax: An additional one-cent sales tax increase would put Solana Beach among cities with the highest tax rates in San Diego County. Stock photo
An additional one-cent sales tax increase would put Solana Beach among cities with the highest tax rates in San Diego County. Stock photo
Cities Elections 2022 News Politics & Government Region Solana Beach

Solana Beach puts 1-cent sales tax proposal on November ballot

SOLANA BEACH — Voters living in Solana Beach will be asked to consider a local one-cent sales tax measure in November’s general election to generate revenue for infrastructure, emergency response and traffic management in the city.

The Solana Beach City Council unanimously adopted a resolution and ordinance confirming the measure’s placement on the ballot at its July 13 meeting, following the example of several neighboring cities which have adopted local sales taxes over the years.

Solana Beach residents currently face a sales tax rate of 7.75%, including the 7.25% state tax and a 0.50% SANDAG district tax. An additional one-cent increase would bring the city’s total sales tax to 8.75%, placing Solana Beach among the cities with the highest rates in San Diego County.

City officials estimate the tax will bring approximately $3 million in additional annual revenue for the city, providing reliable, locally-produced funds for the city’s general fund to cover local maintenance and infrastructure in the face of rising costs for services, materials and construction.

“As the cost of services and maintenance continue to increase, so does the need for locally controlled funding,” said City Manager Greg Wade. “Local control in Solana Beach’s funding would allow the city to allocate funds for enhanced city services, projects and amenities that residents have come to rely on.”

A survey of around 400 city residents conducted earlier this year by True North Research found widespread support for a potential sales tax. About 63% of respondents said they would either “probably” or “definitely” support such a measure on the ballot. In comparison, 25% said they “probably” or “definitely” would not support it, and around 10% said they were unsure.

Other survey findings indicated that 84% of residents are satisfied with city services, and 96% rate the quality of life in Solana Beach as “good” or “excellent.” When asked to rate a list of services based on what should be prioritized for funding, services rated the highest included maintaining roads and filling potholes, keeping neighborhoods, parks, beaches, and public areas safe and clean, and reducing trash and pollution in local waterways and at beaches.

City officials emphasized that while the city is in good financial standing, it is becoming increasingly difficult to fund regular maintenance for its 46 miles of roads and storm drains.

“The residents have told us through the survey that they want to maintain the quality of life that is enjoyed in Solana Beach,” Wade said. “Additional and locally controlled funding would help us keep pace with and expand repairs and maintenance to our streets, sidewalk storm drains and public facilities.”

Council members largely supported the tax idea, stating that it would help the city fulfill the many infrastructure and maintenance needs identified by residents awaiting funding.

“As a council member, one of the things that you do like to be able to address the wants and needs of the community,” said Councilmember David Zito. “There are certainly a lot of them out there, and I think this is an opportunity to provide the community members a chance to start accelerating some of the requests we get. Right now, when we have some of these capital projects out there, it’s like, well, we’re getting plans, we’re wanting to do stuff, but it’s going to take a while for us to come up with the money because we’re a small city.”

Other council members were hesitant to impose more taxes on residents, but as Deputy Mayor Kelly Harless noted, those residents will ultimately have the final say in November. The measure needs at least 50% approval to pass.

“I don’t think anybody likes taxes, and I certainly wouldn’t want to encourage a tax when we don’t need it, but I do want the voters to have the opportunity to get information and decide for themselves when it comes to some of these quality of life issues, so I am supportive of letting our residents weigh in,” Harless said.

The cities of Chula Vista, Del Mar, and Imperial City each have their own 1-cent sales tax in place. Oceanside, Vista and El Cajon have implemented a half-cent sales tax measure, and La Mesa has a three-quarter cent sales tax.

The city of Escondido is also considering placing a sales tax measure on the November ballot after the majority of residents indicated they would support it.

The city clerk will now work with the county Registrar of Voters to prepare an impartial analysis and authorize arguments. Placing the measure on the ballot will cost the city approximately $40,000, according to city staff.

3 comments

tmaddison August 1, 2022 at 7:58 am

Are the people of Solana Beach going to see through this? Have we reached a tipping point where our cities can no longer claim they’re raising taxes “to help pay for city services” when in reality that’s not actually where the money is going?

Regrettably this article continues the general tendency to ignore the elephant in the room, noting only that this tax increase is “to generate revenue for infrastructure, emergency response and traffic management in the city.”

In reality this ignores the fact that one of the largest line items in the city budget is additional payments being made to fund higher pension payouts for city employees.

There are generally two types of pension (CalPERS) contributions made by cities annually. One is called the “normal” contribution and is a payment made based on a percentage of an employee’s pay. That payment is largely the equivalent of social security and “401K matching” payments made in private industry (except, in general, far more lucrative…)

There is a second payment most municipalities with CalPERS members make to fund pension payouts higher than the normal contribution can support. The pension system is under-funded, can’t support the level of pension payouts anticipated, and so they are required by CalPERS to pay an additional lump sum annually, called an “Unaccrued Actuarial Liability” (UAL) payment, to make up for that.

In 2022-23, the City of Solana Beach’s UAL payment will total about $1.4 million, and this number has increased by several hundred thousand dollars annually, to date.

Those numbers are shown on CalPERS site here:

https://www.calpers.ca.gov/page/employers/actuarial-resources/employer-contributions/public-agency-contributions

Meanwhile, the tax increase is projected to raise “approximately $3 million”.

Is it just coincidental that this amount nicely accommodates the current UAL payment as well as future increases?

Despite the contention we see promoted this increase is to “provid[e] reliable, locally-produced funds for the city’s general fund to cover local maintenance and infrastructure in the face of rising costs for services, materials and construction”, in reality it’s pretty clear if we look at the budget the need for “reliable” funds relates more to the need to fund employee pension payouts more than a need to provide services for residents.

As Joe Biden has said, “don’t tell me what you value, show me your budget and I’ll tell you what you value…”, and we can see what Solana Beach values by looking at that budget.

UAL payments are why the city has a budget shortfall. Not because the city is spending too much on services.

Now, perhaps the people of Solana Beach are fine with that. If the people feel that additional taxes to fund employee pensions are worthwhile and justified, they have the right to tax themselves to do that, but first they need to know that.

Isn’t “an informed electorate” something we all value?

Let’s see an honest case being made for this tax increase. Tell the people of Solana Beach you need to raise taxes to fund retirement benefits for employees and see what the people think about that.

The Coast News article quotes the recent action by Escondido to place the measure on their ballot. No mention is made of the fact that Escondido city councilpersons are insisting that the ballot description include language discussing the payment of pension obligations. If Escondido is going to be used to justify this, let’s follow the same path.

Felix July 26, 2022 at 11:43 am

Oh please, be honest, you know it’s for PENSIONS not citizen services

tmaddison August 1, 2022 at 7:59 am

Yup. You’re absolutely right. See my comment. Hopefully the people of Solana Beach will make an informed decision.

Leave a Comment