What impact would the one-and-a-half cent state sales tax hike Gov. Arnold Schwarzenegger wants have on California businesses and consumers -- especially after local voters approved sales tax increases on Election Day.
To shore up their city budgets, voters in El Cajon and La Mesa this week approved municipal tax hikes. But the governor's bid to reach deeper into their pockets has them wondering where this cycle is going to end.
"I don't think people saw this coming when they voted for these measures. So I think that maybe people would have voted differently if they saw that coming from the state," said Laurie Ohnesorgen, of an upscale new restaurant named Gio in La Mesa.
The city's sales tax is going up three-quarters of a cent on the dollar -- to 8.5 cents. That increase was approved by a 55 majority of the voters.
Another cent and a half on the state sales tax, which is what the governor wants lawmakers to approve, would hike the cost to 10 cents on the dollar.
Business leaders said it would have an adverse economic effect not only in La Mesa, but El Cajon whose voters hiked their sales tax by half a cent, to $8.75.
"You're going to see shoppers and consumers look for other places like the city of Santee and city of Lemon Grove to make their big-ticket purchases. Chasing them out of El Cajon and La Mesa. That's a picture that could unfold here," said Mike Cully of the San Diego East County Chamber of Commerce.
A state sales tax hike must be approved by a two-thirds majority of the Legislature -- and political observers don't see that happening.
But there are suspicions that the Governor is overreaching, so as to make a much smaller increase seem more acceptable.