Pismo Beach City Council votes to raise sales tax, needs voter approval

June 5, 2024

By KAREN VELIE

The Pismo Beach City Council voted 4-1 on Tuesday to place a referendum on the Nov. 5 ballot to increase the sales tax by .5% and to extend a previously approved .5% sales tax measure, which city staff estimates will result in $6 million a year in additional revenue.

Pismo Beach and Arroyo Grande currently have the lowest sales tax rates in San Luis Obispo County. However, Pismo Beach leads the county in transient occupancy tax revenue.

During the meeting, Councilman Scott Newton sought to earmark the proposed tax revenue for items such as roads and infrastructure. To prove his point, Newton asked City Manager Jorge Garcia if, as worded in the proposed referendum, the funds could be used to build a Ferris wheel on the pier. Garcia said yes.

The council then voted 4-1 to approve placing a general-purpose tax referendum on the Nov. 5 ballot with Newton dissenting.

Ten years ago, during the June 4, 2014 general election, Pismo Beach residents voted to pass Measure I, which continued a previously approved half-cent sales tax measure that was first approved in 2008. The sales tax was set at 7.75% for 12 years, or until March 31, 2027. It is a general tax, with revenue going to the city’s general fund for any governmental purpose. It was approved by the following result:

If the proposed ballot measure is approved by the voters, the new sales tax rate will be 8.25%.

Visitors pay approximately 63% of this tax, generating the bulk of the sales tax based off goods purchased or restaurants visited while they are shopping in Pismo Beach, according to staff. As a result, residents pay only 37% of the total proceeds collected.