Arroyo Grande City Council votes to increase sales tax, needs voter approval

May 31, 2024

By KAREN VELIE

The Arroyo Grande City Council on Tuesday voted to place a referendum on the Nov. 5 ballot to increase the sales tax by 1%, which city staff estimates will result in $6 million a year in additional revenue.

After discussing the need for added funding for staff salaries, aging infrastructure and road repairs, the council voted to seek public approval to raise the sales tax. The proposed 1% sales tax increase is set to sunset in ten years.

If passed, the resolution will raise the sales tax rate in Arroyo Grande from 7.75% to 8.75%. The city already has its own .5% sales tax rate, which is added to the statewide rate of 7.25%.

Two of the three public speakers at Tuesday’s meeting were opposed to the proposed tax, noting the financial difficulties many residents are currently facing. One speaker, former city councilman Keith Storton, argued the city’s tax is lower than neighboring cities and the need to stay competitive regarding staff salaries.

The referendum requires two-thirds voter approval.

In 2022, Arroyo Grande voters rejected a sales tax increase with 54.36% opposed and $45.64% in favor.