How to evaluate tax measures
Many cities have ballot measures to raise or to retain a tax (sales, parcel, transaction and use tax). To evaluate the merits of the increase, voters need to assess the financial situation of the city, including how much debt the city has as well as how strong the financial reserves are.
The current statewide sales tax is 7.25% of which 6.25% goes to Sacramento, and 1% stays with the
local jurisdiction. San Diego County also has a half cent Transnet surcharge sales tax used for transportation projects.
In California, certain items are not subject to the sales and use tax – food; health-related items (professional services, prescription medicines); housing; general public activities such as museums, non-profit educational or religious organizations. Diapers and menstrual hygiene products are exempted.
Another question is whether the type of tax is appropriate. A sales tax is more regressive than an income tax, as it affects low income people more. The city may not have many choices about ways to raise income as property taxes have limited increases due to Proposition 13.
Is the tax permanent or does it “sunset” after a limited number of years ? Would this give taxpayers more control and accountability?
What are the services or facilities that the tax would fund? Is the tax earmarked for specific use or will it go into the general fund? How important is the social need for those services or facilities?