Escondido Sales Tax

The City of Escondido is facing a projected structural budget deficit, meaning the City will be spending more than it receives in tax revenue. To address the deficit, the City is considering increasing the sales tax by either ½ cent, ¾ cent, or 1 cent. The current sales tax rate in Escondido is one of the lowest in the county, at 7.75%. The most recent sales tax increase proposal that would affect Escondido was the county-wide Let’s Go! San Diego initiative. This measure proposed a half-cent sales tax increase and failed to receive enough signatures to qualify for the November ballot. The main opposition to the initiative was voiced by Carl DeMaio, who argued that the measure was misleading voters into approving a tax hike. In contrast, the proposed Escondido sales tax increase would only affect the City of Escondido and the revenue would go towards the City.

If accepted, this measure would increase the sales tax on all purchased items in Escondido that are not considered by the City to be “necessities of life.” The City has not provided the SDCTA with a definitive list of projects to be funded, but the targets for funding will include addressing the impacts of homelessness, public safety, infrastructure, streets and roads, attracting businesses and jobs, and parks.

Escondido Mayor Paul McNamara, Deputy Mayor Tina Inscoe, and Director of Finance Christina Holmes have expressed support for the measure. Escondido City Councilmember Joe Garcia highlighted concerns regarding its transparency, primarily the fact that the City’s biggest budget issue is their unfunded pension liability.

The SDCTA took a position of opposition to the proposed sales tax. The SDCTA has concerns about the impact of a sales tax increase on lower-income taxpayers and whether the increase will directly address the underlying issue of the projected budget deficit. A more in-depth analysis of the proposed sales tax increase can be found in the SDCTA’s position paper.