TAX HIKE DEFEAT DIMS FISCAL PICTURE FOR LEMON GROVE

LEMON GROVE

Lemon Grove voters on Tuesday rejected a proposed sales tax hike that supporters said could have raised up to $3 million a year for the fiscally challenged city.

So now the question is: What’s next? How does this East County city of 26,000, which has twice considered disincorporation in the last decade, address its systemic financial weaknesses?

Lemon Grove is looking at a deficit of more than $219,000 at the end of this fiscal year, a projected $800,000 deficit in the 2020-21 fiscal year and a nearly $1.2 million budget deficit by the end of 2021-22.

The city has $5.4 million in its reserves, plus nearly $1 million in a separate reserve fund, which combined is more than the 25 percent of its $14.6 million budget that it is required to keep on hand.

But the city will likely have to dig into those reserves to pay for rising pension costs and annual raises promised to public safety employees. Finding ways to close the budgetary shortfalls is a challenge facing many cities throughout the state.

City Manager Lydia Romero said that “Lemon Grove is a strong city that can and will withstand any challenge it may face.”

“The City Council created several financial initiatives to diversify our revenues,” Romero said Wednesday. “Looking to next year’s budget, we will have to tighten our belts yet again and will strive to deliver similar levels of service to Lemon Grove residents and businesses as we are doing now. Any new programs or projects (such as) facility improvements, expanded street improvements or drainage improvements that are funded by General Fund revenue most likely will not occur or will be further delayed.”

The Lemon Grove sales tax measure might have eased the city’s burden. It asked voters to approve a bump from 7.75 percent to 8.5 percent, in line with some of its neighbors, including La Mesa (8.5 percent) and El Cajon (8.25 percent). Money from the extra sales tax would have boosted the city’s General Fund, which is used for everyday expenses such as public safety, recreation services and helping homeless people.

The unofficial election results will not be validated until April, but Measure S, which needed 50 percent plus one to pass, was failing with 59 percent voting against it.

“Yes on S” proponents Yadira Altamirano, George Gastil and Jay Bass crafted the measure with some safeguards, such as a citizens oversight committee, but there was no sunset date, which bothered some of the measure’s detractors.

Even though it appears to have failed, Measure S still faces a court decision. San Diego Superior Court Judge Gregory W. Pollack is expected to rule on its validity on March 20. A legal challenge brought by Lemon Grove resident John L. Wood says the Yes group didn’t comply with the part of the state elections code that requires the publishing of Altamirano, Bass and Gastil’s names in a newspaper of record.

karen.pearlman@ sduniontribune.com