Passage of Proposition D Could Benefit Santee Businesses

Proposition D, the November ballot measure which proposes to raise sales tax rates in the city of San Diego by half a cent for the next five years, could benefit incorporated cities within the county which have lower tax rates, according to government officials.

"In general we've heard that there are a number of people who will, on principal, make it a point to shop here because we have the lowest sales tax in the East County region," said Santee City Manager Keith Till.

Currently, sales tax in Santee is on par with that of the city of San Diego—both at 8.75 percent. Neighboring cities La Mesa and El Cajon have sales tax rates of 9.5 percent and 9.75 percent, respectively.

San Diego City Councilman Carl DeMaio, a staunch opponent of Proposition D, agrees that if the measure passes shoppers are likely to start taking their business outside of the city as a means of saving money. 

While this could be good for cities with lower sales tax rates, like Santee, he believes it could be detrimental to San Diego.

"I think people who are looking to make larger purchases will go elsewhere," DeMaio said. "Take Costco for example. When people go there they spend a lot of money, and it's usually a trip they make once a month. Instead of San Diego benefiting marginally due to the increased tax benefit if Proposition D passes, the city is likely to lose the entire transaction because people may take their business elsewhere in order to save money."

Local car dealerships may also see an increase in traffic should voters approve the measure.

Marty Kennedy, owner of San Diego-based Kennedy Truck Sales said that when his Santee location was still open, he'd frequently see customers coming in from other places, hoping to take advantage of lower tax rates. But the thought process behind that, he says, is flawed.

"The problem with that is that the average person does not know their sales tax is based on the address of the car's registration," Kennedy said.  "So they'd still be paying the same sales tax as they would were they to buy where they live. It might be their perception that they'll save money, but when they get to the buying point they learn differently."

Santee Chamber of Commerce Governmental Affairs Committee Chairman Don Parent feels that while increasing tax rates aren't favorable, rising tax rates in San Diego could stimulate Santee's economy.

"In 2009 we launched the 'Shop Santee and Save' program, which marketed the city as a more affordable shopping destination," he said.  "And while that really has nothing to do with what happens with Proposition D, we won't mind letting people know Santee's sales tax rates remain where they were a few years ago."

Ultimately, Till believes the passage of Proposition D could be a positive for the city's economy due to both increased business at local retailers and increased sales tax revenue for the city.

"I definitely don't think this would hurt us," he said.