Budget deficit and Trump push San Diego County to consider potential tax hike

State of play: Supervisors at Tuesday's board meeting will decide whether to hire consultants to begin pursuing a local tax increase, studying the funding possibilities of different proposals and conducting public polling into their political viability.

• Consultants could consider a sales tax hike, real estate transfer tax and creating a stormwater district that could charge fees for infrastructure improvements.

By the numbers: The county projects a $138.5 million budget shortfall in the upcoming fiscal year, and it is expected to grow to $321.8 million in five years.

• Still, that's a smaller deficit than the city of San Diego's, despite the county's $8.5 billion budget being nearly $3 billion more than the city's.
• Yes, but: Nearly half of the county's revenue comes from the federal or state governments, not from local sources controlled by the county itself.

What she's saying: Lawson-Remer said the Trump administration's threat to reform federal funding — plus the looming economic impact of tariffs and other policies — force the county to look for options.

• "We're in this environment where it was already difficult, but we were managing that difficulty," she said. "Now, the headwinds are coming really because of Trump and both the macro environment and the fiscal environment he's creating."
• On whether she would have pursued a tax increase due to the projected shortfall alone, she said Trump's actions made the need "so much more acute."

Between the lines: The county also implemented new services — like behavioral health services support, rent subsidies and food assistance — through $650 million from the COVID-induced American Rescue Plan Act, one-time revenue that is running out.

• Lawson-Remer hopes to maintain successful programs from that package, recalling county bureaucrats warning her a few years ago against launching programs without ongoing funding attached because cutting them later would be unpopular.
• "I was told, 'Don't do anything on homelessness, because then the voters will expect you to do something about homelessness,'" she said.

• "Whatever they're doing in Washington, we have to deliver healthcare in San Diego County; we have to tackle our homelessness crisis."

The bottom line: If the board decides to hire consultants to pursue driving up local revenue, Lawson-Remer said she'd hope to get a report back by August.

• That could portend a ballot measure in 2026 or 2028, depending on the report's conclusions.
• But a vote in support of Lawson-Remer's proposal is not a done deal. After former Supervisor Nora Vargas' resignation and before the special election to replace her, the board stands at just four members, with a 2-2 partisan split.
• The board could not agree on a new board chair last month, leaving that job vacant.

Reality check: County voters rejected a sales tax increase in November for transportation projects, and city voters shot down a sales tax increase for general services.

• Voters in Santee and Encinitas also turned down tax measures, while Chula Vista, El Cajon, Escondido, La Mesa, Lemon Grove, Oceanside and San Marcos passed increases or extensions.