Measure E: City of San Diego sales tax
What would it do?
This measure would increase the sales tax within the City of San Diego by 1% starting April 1, 2025.
The current sales tax rate in the city is 7.75%. The City of San Diego gets 1% of that, or one cent on each dollar that is subject to sales tax. This measure would increase the rate to 8.75% and bring the city’s sales tax revenue to two cents per dollar.
The city’s independent budget analysts estimate the increase would bring in an additional $360 million to $400 million in revenue to the city in the first year. Sales tax is the second largest revenue source for the city’s general fund, which pays for core city services.
Why is it on the ballot?
The City of San Diego faces a $200 million structural budget deficit. That means regular, ongoing costs are exceeding revenue. Balancing this year’s budget involved moving money from some special funds into the city's general fund. The city is also using grant money and excess savings to pay for ongoing expenses.
“We are facing the reality of deep department and programmatic cuts in FY26,” District 1 Councilmember Joe LaCava said before voting to put Measure E on the ballot. “The safety valves we used to balance the FY25 budget will not be available to us.”
Along with the budget deficit, city leaders say additional revenue could fund infrastructure like streets, sidewalks and flood prevention systems.
It’d also allow the City to chip away at its infrastructure backlog, which the city’s budget analysts say will grow more expensive to address as time goes on. Matt Yagyagan, the city’s policy director, said the city needs $9.25 billion over the next five years to address the backlog.
“We all experience the frustration of driving over potholes, walking on cracked sidewalks or navigating poorly lit streets,” Yagyagan told the City Council. “These are not just minor inconveniences. They are signs of deeper issues that must be addressed with more revenue.”
What are the arguments for and against?
- For
More than $750,000 has been raised to support Measure E as of Sept. 24.
The City Council voted unanimously to put Measure E on the ballot in July. It came just weeks after the end of a budget process marked by public opposition to proposed cuts to equity programs, libraries and police and fire academies.
“Some have suggested that the city should be able to find other trade-offs to meet these needs, and I would simply ask you, where would residents like to see those decreases?” District 6 Councilmember Kent Lee asked at the July meeting. “In which communities, in which facilities, in which services?”
District 7 City Councilmember Raul Campillo said additional revenue would allow the city to address infrastructure needs that past leaders put off.
“I understand people saying, ‘We pay a lot in taxes,’ because we absolutely do,” Campillo said after public comment on the ballot measure. “The vast majority of your tax dollars do not come to the city budget to fix things that you interact with and live with every single day: your sidewalk, your road, your streetlight, your park, your library, your police division and firehouse, your storm drain.”
Labor leaders representing police, firefighters and city employees spoke in favor of putting the measure on the ballot.
Fred Tayco, executive director of the San Diego County Lodging Association, also supported it.
“It’s a very unusual situation when a business association supports a sales tax increase, but we’re in an unusual situation. We’re competing with other cities for business travelers, for leisure travelers,” he said. “I think it’s important for the city to be able to have the resources to be able to continue to make San Diego as attractive and inviting as it needs to be.”
Supporters
- San Diego Police Officers Association
- San Diego Firefighters Local 145
- San Diego Municipal Employees Association
- San Diego Coast Keeper
- San Diego Lifeguards Teamsters 911
- San Diego Middle Class Taxpayers Association
- Against
More than $46,000 has been raised to oppose Measure E as of Sept. 24.
The San Diego County Taxpayers Association opposes the measure. President and CEO Haney Hong said they’re concerned about the city’s ability to manage essential services. He points to past challenges with things like water meter reading and real estate deals.
“The Taxpayers Association doesn't dispute that there is an infrastructure backlog. The Taxpayers Association doesn't dispute that stormwater infrastructure needs to be addressed,” he said. “Where we have concern is that, in order to ensure that these things get addressed appropriately, it requires the fiscal discipline that the City of San Diego cannot demonstrate.”
Hong said city leaders need to be willing to make budget cuts in order to address the deficit.
“We have to acknowledge where our biggest problems are and put money there,” he said. “Maybe stormwater and maybe transportation infrastructure is a much higher priority than keeping a bunch of parks open. And I know that stinks, right? There's some communities that would love to keep their parks, but we can't when everything is a priority.”
The association does support sales tax measures in Chula Vista, Escondido and La Mesa. Hong said a key difference between those and San Diego’s is the inclusion of a sunset clause, essentially an expiration date. For example, Chula Vista’s ballot measure renews its sales tax for 10 years.
“It gives the taxpayers a chance to take another bite at the apple and say, ‘Okay, this is what you promised 10 years ago. Did you guys actually deliver on what you promised?’” he said. “If the answer is yes, then you know what? Maybe you deserve another shake.”
Opponents
- San Diego County Taxpayers Association
- Lincoln Club Business League
- Reform California, State Assembly candidate Carl DeMaio’s political action committee against tax increases
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