The Morning Report
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There was one huge consequence of yesterday’s dramatic state budget deal: The city of Chula Vista is now much more likely to go bankrupt.
Buried in — well, more like “festering on the surface of” — the major budget deal lawmakers are applauding themselves for passing is a 1 percent sales tax hike.
That’s the base sales tax, of course. Local cities and counties put their own sales taxes on top of that. And Chula Vista is about ready to ask its residents to approve of an emergency 1 percent tax hike. The city is on a train headed to a place with an uglier smell than the Tijuana River and its leaders have hung their future on the hopes this tax will pass.
But now that the state has increased the sales tax, this would mean that residents are being asked to go from a 7.75 percent sales tax to a 9.75 percent tax in a matter of months. This, of course, is taking place during an economic collapse in a city that might have participated in the housing mania more enthusiastically and then suffered the consequence of it more dramatically than any (aside from most any place in Florida).
I may be wrong but residents might be more willing to consider the effects of municipal bankruptcy than they are to boost taxes that much that quickly.