National City business owners are voicing concerns over a proposed business license tax reform, also known as a gross receipts tax, that city leaders are considering as they work to address a budget deficit. According to a report presented by the city manager’s office, National City is facing a budget deficit because of rising costs and low property tax revenue. The report says the city could be forced to reduce services, including public safety, which accounts for 70% of the city’s general fund. Mark Philip Valerio Santos, owner of longtime National City staple Valerio’s Bake Shop, said he was alarmed by the proposal. “It was horrific just to know that the city is planning on taxing gross receipts through business licenses was awful because all of the businesses here in National City struggle one way or another.” Valerio said many businesses are already facing financial challenges despite appearing busy. “A lot of business here in National City. We’re struggling. It may look busy but it’s hard” The National City Chamber of Commerce described the situation as “tender,” saying it believes local businesses were feeling bypassed during development of the proposal. Karen Azhocar McManus, executive director of the National City Chamber of Commerce, said the city has made progress in reducing its projected budget shortfall. “The city has looked inside its own shop to see what they can do to reduce it. I believe it has been reduced about 12 million now. But what it what it. That’s still significant,” McManus said the proposed tax would affect about 5,000 businesses in National City because it would be based on annual income, or gross receipts, rather than net income. “It’s going to be based on what their annual income is or gross receipts. And that’s the issue. The gross receipts is much different than the net.” Business owners worry the tax could increase operating costs, with those expenses ultimately being passed on to customers. “If businesses have an increase in cost right that will also go towards the consumers.” said Valerio. A public forum is scheduled for Wednesday at 6 p.m. at the National City Chamber of Commerce, where residents and business owners can learn more about the proposal. This story was originally reported for broadcast by NBC San Diego. AI tools helped convert the story to a digital article, and an NBC San Diego journalist edited the article for publication. ...read more read less