National City Councilmember Jose Rodriguez, a mayoral candidate, joined city workers and labor groups Wednesday in filing papers with the city to put a business license tax overhaul before voters in 2028 — a revenue-generating measure that failed during a council vote in August after pushback from the city’s business community.

He cast the move as a response to a City Council he says has refused to act as the city faces a roughly $13 million deficit.

The council, however, did not abandon the proposal.

On Aug. 4, a 3-2 majority declined to place a similar measure on the November ballot — with Councilmember Ditas Yamane voting alongside Rodriguez. The council instead directed staff to work with the National City Chamber of Commerce toward a possible 2027 special election. Councilmember Marcus Bush, Rodriguez’s opponent in the mayoral race, said a committee formed for that effort holds its first meeting Sept. 29 at 9 a.m. at the National City Public Library.

Rodriguez and the coalition filed a notice of intent to circulate an initiative petition with the city, the first step toward qualifying a citizens initiative for the ballot. Under state election law, the city attorney must prepare a title and summary before supporters can begin gathering signatures for the ballot measure.

The initiative, called the National City Essential Services Protection Act, would replace the city’s nearly 50-year-old flat-fee structure with a tax on gross receipts. Businesses earning $50,000 or less would pay $25 a year. Above that threshold, rates would range from 0.125% to 0.375% depending on business category, and any single businesses’ annual bill under this tax would be capped at $187,500.

Both the rates and the cap exceed the staff-recommended option the council considered in August. That option ranged from 0.1% to 0.3%, carried a $150,000 cap, and was estimated to raise about $7.1 million a year.

Rodriguez’s campaign news release says the measure would make “large, out-of-town corporations pay their fair share.” Under the initiative’s text, however, it would apply to every business above the $50,000 gross receipts threshold with varying tiers based on the business type.

General retail, for example, would fall into the lowest category. Residential rental operators — now taxed under a separate ordinance the measure would repeal — would fall into the highest rate category.

Across several different public meetings throughout June and July where the city discussed the business license tax proposal, dozens of National City business owners voiced their opposition to the measure. They ranged from larger car dealerships along the National City Mile of Cars like Ball Automotive, to smaller businesses like Valerio’s Bakeshop and Niederfrank’s Ice Cream.

City Manager Doug Schulze has warned that the city’s roughly $13 million deficit could reach $30 million by 2029, with insolvency possible by 2030. He projects the unassigned reserve will fall to about $200,000 by June 2027. Much of what drove the deficit, city staff have said, had to do with pay raises given to city employees without sufficient revenue sources to support the hikes.

Rodriguez said Wednesday that he has “zero faith in the ability of this committee or the majority of this current council to put anything on the ballot and allow voters to make this decision.” He called the working group an effort to “buy time” and said it is “stacked by the same business insiders that wanted to kill the initiative.”

“That is the definition of inaction,” he said.

Rodriguez intends to place the initiative on the March 2028 primary ballot, which would bring in revenue later than the 2027 special election the council majority is pursuing. The city estimates a special election would cost about $350,000. Rodriguez argued that special election voters “tend to be very, very conservative” and turn out in small numbers.

The council rejected Rodriguez’s earlier request to move the measure to the 2028 ballot in a 3-2 vote on Sept. 15.

Rodriguez said he would back a measure produced by the working group if it were fair and included input from city workers and firefighters.

“If all that pencils out, then yes, I will be supportive,” he said.

Rodriguez’s news release says Bush “killed” the August measure “at the 11th hour” and is running “with the support of the city’s business and Republican political establishment.” Bush and Vice Mayor Luz Molina, who also voted with the majority, are Democrats. Mayor Ron Morrison, the third vote, is a conservative-leaning, registered independent.

Rodriguez also said Bush and Molina received “thousands of dollars in contributions for their campaigns from the same people that were lobbying the city to kill the initiative.”

Campaign finance records show Bush received a total of $4,290 in direct contributions from two National City car dealerships, Ball Automotive Group and Cumming Chevrolet, and three executives of those dealerships. Keep National City Affordable, a San Diego Regional Chamber of Commerce-sponsored committee supporting Bush, Molina and District 3 candidate Edward Nieto, reported receiving $17,858 in contributions: $6,429 each from the two dealerships and $5,000 from the San Diego Regional Chamber Political Action Committee as of Thursday.

Chris Cate, the chamber’s president and CEO, said the organization opposed the gross receipts tax proposal and is backing candidates aligned with that position.

“Obviously, the gross receipts tax conversation in National City was very important for us and for the businesses in National City,” Cate said.

Cate said the committee expects more contributions and is soliciting National City businesses.

“We’re soliciting support from National City businesses, and as you can tell, that’s who the money coming in is from,” he said. “It’s unfortunate that we have candidates who are disparaging those businesses and trying to subject them as if they’re out of town businesses when they’re in fact not.”

Cate stressed that independent expenditure committees are barred by law from coordinating with the candidates they support while the Chamber spends to support them.

Asked which large businesses he wants to pay more, Rodriguez named “the region’s busiest Walmart,” Target and AMC theater, along with a Costco optometry center. He said each pays $2,000 to $3,000 a year, but should pay “closer to $100,000.”

None of those companies appears among the contributors in the records.

Pressed on the local car dealership donors, Rodriguez said “those business owners don’t live here” and “let’s not act as though these are tiny businesses.”

Bush said none of the national retailers have approached or supported him.

“None of them have come to speak to us opposing the business license tax, to be honest,” he said.

Records show Rodriguez has drawn $92,255 in support from several labor and trade committees. That includes $80,000 from San Diego Works!, a committee sponsored by the San Diego-Imperial Counties Labor Council, and $2,455 from the SEIU Local 221 PAC — a labor group heavily involved in backing the business license tax proposal.

“My values do not change, and I’m glad to take support from organizations that see somebody that is consistent in the political arena,” he said of labor’s support for him.

“But I’m not a blank check for anybody,” Rodriguez added, pointing to a fuel-transfer station project he voiced opposition to last year that was backed by a labor group. The project was ultimately voted down by the council.