Following the lead of other cities in the county, the San Luis Obispo City Council voted unanimously Tuesday to place a 1 percent sales tax increase initiative on the November ballot.
If passed by a a majority of voters, the sales tax rate in San Luis Obispo would indefinitely rise from 7.75 percent to 8.75 percent. The initiative would eliminate the sunset clause on the city’s existing half percent sales tax, which is due for renewal in 2023, and set the city sales tax rate at 1.5 percent until it is potentially changed by voters in the future.
San Luis Obispo is facing an $8.6 million budget shortfall in the current fiscal year. The city’s existing half percent sales tax combined with a 1 percent increase would generate approximately $21.6 million annually, according to a city staff report.
Presently, all seven cities in SLO County have sales tax rates of 7.75 percent. Each of the seven cities have adopted their own half percent sales tax in the past.
In addition to San Luis Obispo, the city councils of Atascadero, Grover Beach, Morro Bay and Paso Robles voted to place 1 percent sales tax increase measures on the November ballot. The Arroyo Grande City Council voted last week against raising sales tax via a 2020 ballot measure.