La Mesa California Moving Toward Increasing Cannabis Sales Tax From 4% To 5%

The La Mesa City Council on Tuesday unanimously agreed to direct staff to look into increasing the city’s retail cannabis tax from 4 percent to 5 percent.

La Mesa City Councilmember Lauren Cazares, who initiated the motion along with Mayor Mark Arapostathis, told the City Council at its July 28 meeting that La Mesa’s general sales tax revenues have declined amid an affordability crisis, while the cost of providing essential city services continues to rise.

“Sales revenues have not kept pace with expectations while the cost of providing essential public services continue to rise,” Cazares said.
“At the end of the day, this is all about balance. Every dollar of locally generated revenue helps reduce pressure for future discussions about broader taxes that would directly impact La Mesa households.”

Raising the rate on taxes for cannabis is a way to help fill the city’s coffers, ostensibly to the tune of an extra $750,000, or more, she said.

The council discussion centered around an ordinance only and the officials did not set an effective date for the increase.

Because La Mesa draws cannabis customers from across the region, the tax increase would be a way to boost city finances through a regional customer base without placing the entire burden solely on La Mesa residents through higher general sales tax or property taxes, Cazares said.

The cannabis funds are directed into La Mesa’s general fund and have been used to support public safety, emergency services, infrastructure, parks and keep competitive the salaries of firefighters and police officers. By raising the tax rate by one percentage point to 5 percent, it could generate an additional $750,000 annually.

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