Pacific Grove council votes to place .375% sales tax on ballot

PACIFIC GROVE – The Pacific Grove City Council unanimously voted to place a 3/8th sales tax measure on the November ballot, asking voters to approve a 0.375% increase on services, intended to help address the city's ongoing budget deficit and long term infrastructure needs. Council member Chaps Poduri was absent.

If approved by voters Nov. 3, the city's local sales tax would increase by 0.375%, bringing the city's transactions and use tax rate to 1.875%, which would add almost four cents to a $10 transaction.

City staff estimate the measure would generate about $1 million annually for 10 years. Because it is a general tax, the revenue could be used for general government purposes.

During a special council meeting Tuesday, city staff reported Pacific Grove has faced increasing financial pressure from stagnant revenues, higher labor costs, inflation, rising insurance premiums and growing pension obligations. While the city has reduced spending by more than $1 million and recently improved its fiscal outlook through additional transient occupancy tax and property tax revenue, staff said the city continues to face an ongoing structural deficit and millions of dollars in unfunded infrastructure needs.

According to the staff report, Pacific Grove has about $11 million in unfunded capital improvement needs over the next five years and about $21 million over the next 10 years. Staff said additional revenue is needed to help maintain streets, parks, public facilities and other city infrastructure while preserving essential services. The measure also includes independent audits and would keep revenue under local control.

Before bringing the proposal forward, the city commissioned a scientific survey of 427 residents to gauge support for the measure. The initial ballot test found 68% of the residents supported the proposal. Support remained above 60% after respondents heard both arguments for and against the proposal.

The city also conducted more than a dozen presentations and several community meetings as part of its public outreach effort.

The city of Monterey had a similar proposal on the June primary ballot last month, but the measure failed. Pacific Grove council members were overall in agreement with the sales tax, asking questions about outreach and public awareness.

"I think we should let the voters weigh-in,”" said council member Tina Rau, “and I don't hope that they see this is just another way for us to be able to continue down the road for sidewalks, sewers, roads, stop signs and all the other things that we're trying to do here improve our quality of life."

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This story was originally published July 8, 2026 at 2:55 PM.