PREPARED BY: MATT RODRIGUEZ DATE OF MEETING: 06/15/2026
SUBJECT:
TITLE
CONSIDER RATIFYING LETTER FROM SAN PABLO MAYOR PABON-ALVARADO TRANSMITTED ON JUNE 2, 2026, TO STATE SENATOR JESSE ARREGUIN (D-07) EXPRESSING SUPPORT FOR AMENDED SENATE BILL 762 LEGISLATION PURSUANT TO SECTION 7251.1 OF THE CALIFORNIA REVENUE AND TAXATION CODE PERTAINING TO TRANSACTIONS (SALES) AND USE TAX EXEMPTION
CEQA: This proposed action is not a project as defined by CEQA.
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CITY MANAGER RECOMMENDATION
Recommendation
Approve by Minute Order
Body
Compliance statements
FY 2025-27 Council Priority Workplan Compliance Statement
Under Major Police Area: Focus on Economic Development and Fiscal Diversification is an adopted policy contained in the FY 2025-27 City of San Pablo Council Priority Workplan, effective April 7, 2025.
CEQA Compliance Statement
This proposed action is not a project as defined by CEQA.
BACKGROUND
In accordance with previous City Council Resolution 2025-035, which was adopted on March 3, 2025, the City Council authorized the City Manager to explore the feasibility of a new, half-cent (0.50) sales tax measure for funding general municipal services for future consideration for the November 2026 ballot.
2% Sales Tax Cap - Legislative Exemption
On March 3, 2026, the City Manager sent a letter to Senator Jesse Arreguin (D-7th), requesting that the City of San Pablo be included in Senate Bill 762, which was introduced by Senator Arreguin for the City of Hercules, to pursue their City’s legislative exemption request pursuant Section 7251.1 of the California Revenue and Taxation Code pertaining to Transactions (Sales) and Use Tax to support their proposed 1 cent sales tax funding measure for the November 2026 ballot.
After this letter was transmitted by the City Manager, the City Council took formal action by adopting Resolution 2026-036 on March 16, 2026, which officially confirmed the City's inclusion in the SB 762 state legislation and authorized San Pablo to seek the same formal legislative exemption required to advance a half-cent (0.50) sales tax measure for placement on the November 2026 ballot.
To date, a total of fifteen (15) Counties and Cities, including Contra Costa County, City of Hercules and City of San Pablo, are seeking this same State legislative exemption pursuant Section 7251.1 of the California Revenue and Taxation Code pertaining to Transactions (Sales) and Use Tax increases to proceed with proposed sales tax measures before local voters on the June 2026 and November 2026 ballots.
State Legislative Bills
To facilitate legislative exemptions for several cities and counties during the election cycles of 2026, the Governor’s Office and State Legislature leadership considered final support for the pursuit of two (2) distinct new bills to address these legislative exemptions enabling these cities and counties to proceed with their respective funding measures, as follows:
(1) AB 1768 (Bryan): approves legislative exemptions for Contra Costa and Los Angeles counties for TUT (sales tax) measures slated for the June 2, 2026, state-wide ballot which was signed by the Governor on June 1, 2026; and
(2) SB 762 (Arreguin): proposes legislative exemptions for 11 cities and two (2) counties, including San Pablo, for TUT (sales tax) measures on the November 3, 2026, ballot under an amended bill dated June 1, 2026 (See Attachment).
This legislative approach ensures tailored solutions for local jurisdictions based on their respective timelines and needs. Therefore, the City must continue to have our interests and needs advocated directly to the Governor and State Legislature leadership to support our legislative exemption previously authorized by City Council action for the November 2026 ballot.
City’s Letter to Governor on Legislative Exemption
Following these latest developments, the City previously transmitted a letter of support which advocates its position directly to Governor Newsom to support statutory flexibility allowing the City to place the half-cent (0.50) Transactions and Use Tax (TUT) measure on the November 2026 ballot. Critically, the City is not asking the State for funding, it is asking for the legal authority to let local San Pablo voters decide. This letter was transmitted on May 18, 2026, signed by Vice Mayor Xavier on behalf of Mayor Pabon-Alvarado, and ratified by City Council action via minute order vote at the June 1, 2026, City Council meeting.
Support Letter for SB 762 (Arreguin)
As of June 1, 2026, following the Governor’s signing of AB 1768 (Bryan) legislation, the city was asked for a letter of support for SB 762 legislation which was amended on June 1, 2026, to be transmitted to Senator Arreguin urging its support and passage. The City Council has already laid the groundwork by adopting Resolution No. 025-035 in March 2025, directing the City Manager to study the feasibility of a half-cent TUT for November 2026 ballot. Additionally, the City Council further adopted Resolution #2026-036 on March 16, 2026, further supporting San Pablo’s inclusion into the SB 762 legislation for requesting a legislative exemption from State law to facilitate a half-cent sales tax funding measure for the November 2026 ballot.
For these above reasons, on June 2, 2026, Mayor Pabon-Alvarado signed a letter of support for the Amended SB 762 legislation which was transmitted to Senator Arreguin (D-07) urging its strong support and passage (See Attachment).
City Manager Recommendation
The City Manager recommends that the City Council formally ratify the transmittal of the letter of support on June 2, 2026, to State Senator Jesse Arreguin (D-07th) via minute action vote this evening.
FISCAL IMPACT
None associated with this item
ATTACHMENTS
Att A. Letter transmitted on 06/02/26 from San Pablo Mayor Pabon-Alvarado to State Senator Jesse Arreguin (D-07th) re: Support for SB 762 Legislation (Amended as of June 1, 2026)
Att B. Amended SB 762 (Arreguin) Legislation as of June 1, 2026