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Who really benefits and suffers from the La Mesa sales tax increase? PDF Print E-mail
San Diego Cities - La Mesa
BY Richard Rider, chairman of San Diego Tax Fighters   
Thursday, 16 October 2008 16:46

My deductive reasoning tells me that it's not only the La Mesa city employees and politicians who are supporting Proposition L -- the initiative to raise the city sales tax three-quarters of a percent to 8.5 percent-- in order to pay the city workers (and city politicians) the best guaranteed pensions in the county. Such an increase in sales tax will give La Mesa the second-highest rate in San Diego County.

It turns out that, doubtless, there are a number of other organizations quietly hoping that this measure wins. Oddly enough, none are located in La Mesa! Here are some that come readily to mind:

1. The Navy and Marine Corps exchanges and commissaries (the military's department and grocery stores). Since their customers pay no sales tax at these stores, La Mesa's Prop L, if passed, will further motivate La Mesa military residents. These active, reserve and retired military personnel, along with their families, will shop more on the bases rather than in La Mesa stores.

2. The city and businesses of El Cajon. El Cajon has already raised its sales tax a half percent. It didn't raise nearly the revenue expected (again, for the city's underfunded, overly generous pensions), so they have ANOTHER half percent tax increase on November's ballot. If El Cajon's Prop. J passes, it will raise the city's sales tax rate to 8.75 percent, the highest sales tax in the state. If neighboring La Mesa stays at 7.75 percent, that's just another reason for area consumers to shop at La Mesa stores rather than El Cajon businesses.

3. Home Depot. With 20 locations around San Diego County and none in La Mesa, Home Depot will be happy to provide lower-taxed building materials and home improvement products to La Mesa residents and businesses. Home Depot certainly will love it if their La Mesa competitors, such as Dixieline Lumber, have to charge a higher sales tax than Home Depot stores.

4. Out-of-state Internet companies with no business presence in California. Online purchasers do have to pay shipping, but avoiding the high La Mesa sales tax will further encourage La Mesa residents and companies to do more of their purchasing with such tax-free companies.

5. Retail businesses in neighboring cities. This hardly comes as a surprise. Most working La Mesa residents are employed elsewhere in the county. Thus, it will make sense for such consumers to stop and shop in the city where they work, rather than where they live, if La Mesa charges higher taxes.

6. Neighboring cities' gas stations. La Mesa gas stations will now have to charge about three cents per gallon more in tax (at present prices) than San Diego, Spring Valley, Lemon Grove, Santee, Lakeside and other area stations. Therefore, La Mesa drivers will have more of a tendency to stop in neighboring towns to refill their cars, while neighboring city residents will more frequently avoid buying at La Mesa gas stations. The fact that sales tax is built into the price of gasoline will contribute to this problem.

7. Auto dealers outside La Mesa. Buyers of cars pay the sales tax of the locality where they live, not where they buy the car. But few people understand that. So when the word gets out that La Mesa has the highest sales tax in Southern California, people who would normally shop at La Mesa dealerships will naturally tend to shop elsewhere in the county. Furthermore, why buy a car in La Mesa when subsequent servicing and parts will be charged the higher La Mesa sales tax? Bottom line: Not only will the higher sales tax not raise a dime more from La Mesa car sales to nonresidents, the existing level of car sales (and existing car sales tax collected that already goes to the city) will drop as more buyers do their shopping elsewhere.

So who will be paying most of the La Mesa sales tax?

1. People without cars. It is just not practical for most people to use public transportation to other cities to do meaningful shopping.

2. The disabled. These folks normally have to shop in their neighborhoods.

3. The poorly educated. Many less-educated people may not even be aware that La Mesa charges a higher sales tax than anyplace else in the county.

4. Non-English speakers. The local La Mesa stores won't be forthcoming with information on the higher sales tax situation.

The good news is that these special interest groups quietly hoping the tax will increase are not contributing to the "Yes on Prop. L" campaign. After all, to do so would be, as the English say, "bad form."

But the sales tax proponents don't need their tainted money. Already, La Mesa has spent over $130,000 of taxpayer money to pass this measure. They've got a small army of city worker "volunteers" to walk the precincts to raise taxes. Businesses with lucrative city contracts are donating major bucks to stay in the good graces of Mayor Art Madrid, et. al.

More money for their cause would just be overkill.

And acutely embarrassing.

For more info on who opposes this sales tax and why, go to: www.noLaMesaSalesTax.org

Richard Rider is the chairman of San Diego Tax Fighters.

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