San Diego City Council approved a sales tax hike of 1% to fund infrastructure upgrades via a ballot measure in Nov. City faces $9.25 billion in infrastructure needs over 5 years, with proponents aiming to generate $400 million annually if measure passes. Opponents argue against tax increase during tough economic times.
The San Diego City Council unanimously approved a ballot measure in late July which, if approved at the polls on Nov. 5, would increase the city's sales tax by 1 percent per dollar to help pay for broad infrastructure and municipal services.
"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 represents the second-largest revenue source for San Diego's General Fund, accounting for 18.9 percent of the total revenue, KNSD-TV reported.
Proponents have said the increase is needed to improve city roads, storm drains, public safety, and facilities such as parks and libraries. Opponents, however, said a sales tax hike would make little sense in a time of higher prices and city budget woes.
If the ballot measure passes in this fall's 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 sales tax rate is tied for fourth lowest, a city report found.
Gloria and Campillo estimate that if the measure is successful, it would generate $400 million annually for neighborhood infrastructure.
"This city council and mayor have prioritized necessary long-term fixes to our infrastructure rather than band-aid solutions, and with the voters' approval of this measure, we have the chance to truly double down on this approach," the 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."
San Diego Needs Billions to Fund Infrastructure Needs
According to municipal officials, $9.25 billion is needed over the next five years to address an infrastructure backlog and would come with checks to ensure the funds go 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 noted.
City Councilman Kent Lee, who represents San Diego's District 6, told KNSD-TV in March that there were nearly 200 projects in need of funding at that time, and he constantly hears from constituents about the lack of progress for needed facilities like recreation centers.
Since early 2023, Lee noted, the city has filled more than 60,000 potholes.
He added that San Diego's funding shortfall did not happen overnight, but "was driven by generations of the lack of investment."
Lee's colleague, Campillo, said that while concerns over higher taxes are valid, it is the city that is responsible for "things you see above ground, and things that work under the ground," including roads and police protection.
"This is about a plan, not just one penny," he added.
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.
On July 19, San Diego City Council President Sean Elo-Rivera and Council President Pro Tempore Joe LaCava announced they were withdrawing a proposed stormwater funding measure, citing "substantial changes" to ACA 1, a proposed California ballot measure which, if approved at the polls, would have set the threshold for voter approval of local infrastructure funding at 55 percent.
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