El Cajon and La Mesa city officials will ask the voters for a sales tax increase to help solve an ongoing fiscal crisis that threatens services in both East County cities.
Both city councils voted at separate meetings Tuesday to place sales tax measures on the November ballot. El Cajon is asking voters to approve a half-cent increase while La Mesa is looking for a three-quarter-cent increase.
If approved, the measures would raise El Cajon's sales tax rate to 8.75 percent and La Mesa's to 8.5 percent. El Cajon residents and shoppers already pay higher sales tax because voters approved a half-cent increase in 2004 for new public safety buildings. No other cities appear to be considering a sales tax increase, although Vista and National City voters have approved increases in the past.
The discussion over higher taxes drew a full house to the La Mesa meeting, where 40 people – split evenly – spoke. In El Cajon, two people showed up to speak against the proposed increase.
At both meetings, some worried that higher sales tax would drive shoppers to cities with lower rates, but city officials said no data exist to support that. Taxpayer advocates also have criticized the measures, saying both cities – particularly La Mesa – could save money by renegotiating pension plans with employee unions.
El Cajon and La Mesa are trying to bridge budget gaps that are projected to reach $6 million and $4 million, respectively, in fiscal 2009, which begins next July 1. El Cajon estimates the tax increase would generate $8.5 million a year, while La Mesa predicts it would bring in $7.2 million annually.
Officials in both cities said the slumping real estate market and an economy in dire straits have caused the financial problems.
El Cajon City Manager Kathi Henry said her city has cut costs by eliminating or combining jobs. The financial situation is so severe, Henry said, that police and firefighter positions could be eliminated, a community center could close and other services, such as park maintenance, would suffer without a sales tax increase.
Ron Pennock, a member of the East County Construction Council, said higher taxes will hurt business owners.
“We need incentives, not disincentives, to attract business people,” Pennock said.
El Cajon Councilman Dick Ramos said the public should decide.
“We have made all the cuts and done everything we possibly can to save money,” Ramos said. “The only place left to cut is fire and police.”
The El Cajon council voted unanimously to put the measure on the ballot. In La Mesa, the vote was 4-1, with Councilwoman Ruth Sterling dissenting.
“A tax increase in these tough economic times is outrageous,” Sterling said.
She said the city shouldn't ask voters for help and instead should wait to see if various residential and commercial real estate projects that are in the works or on hold bring in more money.
But other council members said the city couldn't afford to wait.
“Right now we have no flexibility, no choices,” Councilman Ernie Ewin said. “It's that tight.”
Some residents said the city was asking for too much, while others said they feared losing essential city services.
“I do not feel an increase in the tax would be as painful as it would be to cut our services,” said La Mesa resident Lois Knowlton.
Liz Neely: (619) 593-4961; liz.neely@uniontrib.com
