Possible Sales Tax Hike

Has Chula Vista's budget deficit reached a state of fiscal emergency?  Would voters in the county's second largest city approve a sales tax hike to avoid more service cuts?  Chula Vista Council members were set to address those questions Thursday evening.

Chula Vista has been one of the hardest-hit cities in this recession, battered by a real estate economy that's tanked with record foreclosures and a huge drop in sales taxes. 

The city's current budget shortfall is $4 million -- next year, it's trending upwards of $20 million.  A one-cent sales tax increase could almost wipe all that out.

"Over the last two (fiscal) years, we've gone from 1,250 employees to just about 1,000," Chula Vista Mayor Cheryl Cox said. "The city has done just about everything it can do to be able to not spend more than we take in."

Cox  noted that the budget during that time has diminished from $170 million annually to a  $120 million if projected cuts are made in the absence of a sales tax hike.

The city's current sales tax is 7.75 cents on the dollar.

Officials estimate that an increase of one cent on the dollar could raise an extra $22.6 million a year for the city, based on a 2-percent reduction in sales during the next fiscal year.

Council members must unanimously approve a resolution of fiscal emergency to go to the voters -- likely, through a mail-ballot election that would cost about $275,000 -- less than half the cost of a polling-place special election.

"I'd vote for it," said Chula Vista Resident Allen Rangel.  "Because the bottom line is, there's jobs at stake.  If you think about it, families and everything else."

Without added revenue, city officials have warned of laying off 165 employees and curtailing non-public safety programs to a far greater degree than small reductions in police and fire operations.  But anti-tax advocates say that may be more in order than a higher sales tax.

"The public is very mature; they recognized that adjustments have to be made in hard times," said Larry Breitfelder, founder of the Chula Vista Taxpayers Association.  "That's appropriate if we want the city government and city services to be stronger and more efficient by the end of this process, as opposed to just having a bridge to 'business as usual' five years from now."

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