Escondido Again Considers Tax Increase to Solve Budget Woes

The Escondido Council is considering again putting a tax measure on the November ballot in hopes that it will resolve the city’s budget deficit. It is almost identical to a measure the council rejected two years ago despite positive financial projections and solid survey results that have shown community support.

Escondido currently forecasts a $ 8 million budget deficit in the next fiscal year and about $ 150 million over the next 20 years. The city had to do significant reduction in city service for the past few years to make money.

The proposed sales tax increase is projected to generate $ 28 million annually, and the measure has already garnered 71 percent of resident support according to a 2020 city community survey. This motion required a unanimous vote to put in place the ballot, but failed when Councilman Mike Morasco voted against it.

Escondido now has a second chance to put the measure on the ballot next November. The council appointed Morasco and Mayor Paul McNamara to a subcommittee last year to explore the measure further.

In 2020, when it first debated, the council had a Democrat majority with Morasco as the sole member of the Conservative council. This time the council has a Republican majority with Morasco, Tina Inscoe Council and Joe Garcia Council over Democrat McNamara and Consuelo Martinez Council.

Three members of the Conservative Council tend to vote similarly on most issues caused some tension in the passt. It is unclear whether Morasco will change his mind about the measure — or, if he does, whether Inscoe and Garcia will join him in supporting a tax measure that supporters argue could fix the city’s fiscal outlook.

The current tax rate in Escondido is 7.75 percent. Many cities in the county have at least an 8.25 percent tax rate including Del Mar, Oceanside, Vista, El Cajon, Chula Vista, Imperial Beach and La Mesa.

City staff presented four options to the council at last week’s meeting: no new income, a 1/2-cent increase, a 3/4-cent increase or a one-cent increase. The last three scenarios were marked in ascending order, “surviving,” “stabilizing” and “thriving.”

City officials, in its report recommending the council put the measure on the ballot, said the city might have to make dozens of cuts to city services, such as eliminating youth intervention programs, reducing library programs, reducing maintenance parks and closed city pools. The city could also eliminate 10 police officers, 12 firefighters, three medical technicians, close a fire station, and reduce public works and city staff, according to city staff reports.

A total increase of one cent, on the other hand, would allow the city to bring in more police officers, firefighters and medical technicians, and restore programs and services that took a hit due to Escondido’s financial hardship.

Morasco said that a significant part of the budget deficit is caused by the city’s pension obligations. Instead, he argued that the city should provide retirement obligations for some of its pension debt.

Pension obligations is a controversial method of trying to reduce pension debt. A government agency provides bonds and invests the loan, usually in its regular pension fund, then tries to earn more on the money invested than it pays in interest on the bonds, and uses this difference to shrink the pension deficit an.

However, there is a high risk that the earnings on the borrowed money will be less than the interest rate, thereby losing taxpayer money.

“Pension bonds … these could theoretically take 50 percent of those dollars in deficit out of the equation, which significantly changes what you can do with 1/2 cents, 3/4 cents, one cent,” Morasco said. of.

Morasco also said there needs to be more transparency with the public about the current dollar increase that residents would see with their purchases.

“One cent may sound very innocent,” Garcia said. “It doesn’t sound like much, but when you start looking at common things, it adds up.”

McNamara said a tax increase may not be ideal, but the alternative is risky.

“Life costs money,” McNamara said. If voters do not support the measure, he said, “There is a risk of graffiti starting to rise, the city starting to spiral down, investment starting to go down and people starting to move. And I don’t think we want that. ”

Inscoe suggests a sunset clause, meaning the tax increase would end after a period.

Finally, the council decided to commission a new community survey to see what options Escondido residents would support if there were any.

It would take four votes in the council, or a super-majority, to put the measure on the ballot, and then a simple majority in the ballot box approved the measure.

The council has until August 12 to put the measure on the ballot.

In other news

  • Vista City Council voted last week to restore an inclusive housing policy which would establish a minimum requirement of affordable units for residential development greater than 20 units. The council will consider an official policy in the coming months after city staff develop a formal proposal. (News Coast)
  • San Diego County School Board approved a new map for the San Dieguito School District, canceled the previous San Dieguito map, which resulted in a lawsuit that was allegedly jerrymandering political. San Diego County Board of Education took over San Dieguito’s redistricting process because the district was late in holding a public hearing regarding its card and, the county warned, that the card could violate state law. (Union-Tribune)
  • Encinitas gen reached an agreement with the developer at Encinitas Boulevard Apartments, a housing project that the city rejected last year. Encinitas has a history of refusing housing projects, however The state’s attorney general warned the city in March to approve the project once it is resubmitted. The complex will now have 250 units, with 50 of them set aside for low-income people. (Union-Tribune)

Escondido Again Considers Tax Increase to Solve Budget Woes Source link Escondido Again Considers Tax Increase to Solve Budget Woes

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