Escondido is a corrupt city. The city council is putting forward a sales tax—without telling the true purpose of the tax increase.
es tax, with the implication the money goes to the basic services of the city. It doesn’t. It will be used to pay off its pension plan—but the council does not want that FACT put in the ballot measure. It will get worse. CalPERS lost 6.1% of its investments just the past year, that means the agencies, like Escondido will have to make up for the lost money. This “sales tax” will not cover that.
“Residents also indicated they would want to see the money address homeless issues, improve infrastructure and public safety, clean up and beautify the city and provide more affordable housing.
But the city’s unfunded pension liability was barely mentioned in the survey, which Councilmember Joe Garcia took issue with, saying the city should have been more transparent with voters about the reality of where most of their projected debt is coming from.
The voters think the money is going to help the homeless—instead it will go to make bureaucrats richer so they can buy bigger homes. CalPERS has north of one trillion in unfunded liability and the Escondido city council is lying to the public about the real purpose of the sales tax increase.
Escondido Tax Measure Debate Focuses on City’s Pension Debt
The Escondido City Council is inching toward putting a sales tax measure on the November ballot, but a heated discussion about the city’s unfunded pension liability took center stage at a recent meeting.
by Tigist Layne, Voice of San Diego, 7.20/22
The Escondido council last week discussed the results of a poll gauging the political viability of a sales tax measure on the November ballot, but heated discussions about the city’s $300 million unfunded pension liability quickly took center stage.
The tax measure in question is almost identical to one the council rejected in 2020, but support from residents and promising revenue projections for the measure have put it back on the council’s radar.
The city-commissioned poll taken by more than 1,000 Escondido voters showed support in excess of 60 percent for the proposed sales tax hike, which aims to address Escondido’s growing budget deficit.
Escondido had to close an $8.5 million deficit for the 2021/2022 fiscal year and projects that deficit to grow to $10 million annually over the next five years.
The proposed one-cent sales tax increase is projected to generate about $28 million annually. About 62 percent of residents would support the measure if the tax hike did not have a scheduled end date, and 68 percent of residents could support it if it automatically ended in 20 years. Two thirds of voters would need to approve the tax increase.
The current sales tax rate in Escondido is 7.75 percent, below the 8.25 percent tax rate in effect in cities like Del Mar, Oceanside, Vista, El Cajon, Chula Vista, Imperial Beach and La Mesa.
Residents also indicated they would want to see the money address homeless issues, improve infrastructure and public safety, clean up and beautify the city and provide more affordable housing.
But the city’s unfunded pension liability was barely mentioned in the survey, which Councilmember Joe Garcia took issue with, saying the city should have been more transparent with voters about the reality of where most of their projected debt is coming from.
Pension liability is the difference between the total amount the city owes to retirees and the amount of money available to make those payments.
Escondido currently has $300 million in unfunded pension liability and, in 2020, had a pension funded ratio of 70 percent, according to the California state auditor.
The city has to make annual payments toward this debt to the state pension system. These payments are projected to range between $10 million and $22 million until 2044, according to a city staff report.
A 2019-2020 report from the California state auditor that ranked the fiscal health of cities, including their pension obligations, listed Escondido’s pension funding as “high risk.”
In comparison, Oceanside, the largest city in North County was ranked as “moderate risk,” with a pension funded ratio of 76 percent. Carlsbad, the third-largest North County city behind Escondido, was ranked “low risk” with a pension funded ratio of 78 percent.
In order to make the payments toward these debts, Escondido has cut city services over the past few years including reducing staff, deferring infrastructure maintenance, outsourcing services, reducing the maintenance of city parks and eliminating some community outreach programs.
Garcia argued during the meeting that the city should be doing more to inform voters about the city’s pension debt and said the language of the proposed ballot measure should also highlight the issue.
“I think we need to be completely honest and transparent with the community and say we need to pay this, and we need your help to do this,” said Garcia.
Mayor Paul McNamara disagreed, saying that city staff and the City Council have discussed Escondido’s pension debt enough to keep voters informed. He also argued that this debt will have to be paid regardless of this measure, so it doesn’t need to be explicitly identified.
McNamara later said that if the aim is to be transparent, then language should also be included explaining that the Escondido’s quality of life will continue to decrease without this measure as more city services are cut.
The tense exchange, which lasted several minutes, ended with the Council asking staff to come back at a later meeting with language options for the ballot measure that would include both suggestions.
The Council has until Aug. 12 to put the measure on the ballot. If they decide to move forward with it, they still have to decide between a 1/2-cent tax increase, a 3/4-cent increase or a one-cent increase.
