For the first time in recent years, Escondido is projecting a budget surplus because of a voter-approved tax increase.
The $7.1 million surplus comes from the more-than-expected revenue from Measure I, a one cent sales tax increase approved by voters last fall. The city had expected $28 million from the sales tax, but increased economic activity is boosting that revenue.
Escondido finance director Christina Holmes said now, “We anticipate receiving about $38 million," and added, "That updated projection also reflects the strong economic growth that the city has experienced over the last few years.”
Part of that increase came from the reopening of Grand Avenue. The city widened sidewalks, added new parking and roundabouts and expanded outdoor dining areas.
Holmes called it "a significant milestone.”
At lunchtime on Wednesday, Grand Avenue was bustling with activity. That was good news for Julian Lapicz, manager of Upper East on Grand. The restaurant and bar opened roughly seven weeks ago.
“It definitely adds a lot more foot traffic," he said of the widened sidewalks and added parking spots. "It's a little bit easier to kind of get here, find a place to park and walk up and down the street.”
While that money is putting Escondido’s finances on a much better footing, Holmes said that does not mean that the city’s structural deficit problem is solved. The tax increase is expected to sunset in 20 years.
"So when that revenue ends in 20 years, and without any other substantial change to the city's structure, the city will be back with a structural budget deficit,” Holmes said.
The city is investing the current surplus into much-needed infrastructure improvements that have been on the city’s deferred maintenance list, including roof repairs, two new fire utility trucks and 37 new police cars. It is also adding 27 new staffing positions and reinstating three positions that were previously eliminated due to the budget deficit.
