Anaheim Council Approves Ticket Tax Protection for Disneyland

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At a meeting that pushed into Wednesday’s wee morning hours, the Anaheim City Council narrowly approved a tax shield for Disneyland that effectively strips residents of their power to tax admission to the mega-resort for up to 45 years.

Council members extended the existing entertainment tax exemption, which has been in place since 1996, in exchange for promised investments to the Disneyland and California Adventure theme parks. Disneyland must complete a $1 billion expansion by 2024 to maintain a 30-year ban, and another half-billion dollar investment after that to extend the ban for 15 more years.

The vote to approve the deal was 3-2, with council members Kris Murray, Jordan Brandman and Lucille Kring voting for the deal. Mayor Tom Tait and Councilman James Vanderbilt voted no.

In California, only residents at the ballot box can approve levying a new tax, and policies taking that power away are illegal. But the deal circumvents that prohibition by steering all revenue from any future entertainment tax back to Disneyland.

An entertainment tax under the deal is defined as any tax applied especially for entertainment businesses, such as a tax on admissions or a parking tax.

Groups Line Up to Support, Oppose Deal

Dozens turned out for the meeting, packing the council chambers and spilling out into the lobby. The majority – including construction trade union representatives, hotel managers, restaurant owners, police and fire union leaders, business lobby groups, chambers of commerce of various stripes, and others connected to the tourism industry – supported the deal, saying it would be a boon to the local economy.

On the other side were many residents, including a number of working-class Latinos, who said the deal amounted to yet another giveaway to a multi-billion dollar corporation at the expense of residents.

Disneyland officials say the deal offers the financial certainty necessary to invest in the Anaheim parks, and that they would instead consider pouring money into theme parks in foreign nations like France and China if they didn’t get the guaranteed tax protection.

They also argued that investments would produce thousands of jobs and new tax revenue for the city. According to Disneyland officials, the resort’s workforce has doubled to 28,000 and brought in millions more in tax revenue since a deal 20 years ago to have the city finance over a half-billion dollars in improvements to the resort district and protect Disneyland from a gate tax.

Both Disneyland and the city hired economic consultants who determined that the city would see millions of dollars annually in new revenue.

“Tonight we hope you will continue to choose a future that’s built upon growth and opportunity,” Disneyland President Michael Colglazier told the council.

But Disneyland refused to release its economic study on the deal, saying it contained proprietary information and making it impossible to independently verify its claims.

Meanwhile, an economics professor who specializes in tourism economies told Voice of OC that city officials in their budget forecast are grossly underestimating costs associated with Disneyland and the resort district, eating up the tax revenue surplus that officials claim fund services for neighborhoods.

Also, Disneyland would almost certainly expand regardless of any entertainment tax protection because of overwhelming capacity needs to expand and competition with Universal Studios Hollywood – which recently invested $1.5 billion in a makeover without any ticket tax protection — experts who study the industry say.

Differing Views of Disneyland’s Impact

Advocates for the deal and residents who opposed it painted vastly different pictures of Disneyland’s presence in Anaheim. While supporters touted the jobs and tax revenue — one common refrain was “the numbers speak for itself” – others, especially Latinos, said such platitudes ignore the more complicated truth.

Ana Lepe, a worker at one of the Disneyland hotels and Anaheim resident, said the cost of living is high in Anaheim because of the resort. To make things tougher, Lepe said her job with Disneyland doesn’t pay much.

“With my income I barely make enough to get by,” Lepe said, speaking in Spanish. “I don’t see why Disneyland should have so much money left over.”

Jose Moreno — president of the group Los Amigos of Orange County and considered by many to be the most high-profile supporter of an entertainment tax – said even though Disneyland’s employment has doubled and tax revenue has increased, poverty rates for children in Anaheim have only risen, and that the economic prosperity brought by Disneyland only applies to some.

According to Moreno, who is also a former Anaheim City School District board member, 91 percent of school children are being subsidized on free or reduced lunch prices. Some 15 percent of children are homeless, he said.

Moreno also said that he had a conversation with his 15-year-old daughter about the fact that, even if 90 percent of Anaheim residents vote to tax Disneyland, this deal means “Mija (daughter), your vote won’t matter.”

The experiences of Lepe and Moreno’s testimony reflect what tourism industry experts interviewed by Voice of OC said about a tourism-focused economy — it generally produces low-wage jobs and has other impacts that lower the quality of life for the residents who live nearby.

However, not all the jobs are low-wage and seemingly dead-end. Another woman said that Disneyland offered her a good paying career that will allow her to “retire in dignity.”

Norma Bleecker Trujillo said she started out as a claims administrator for workers’ compensation and moved into management after a few years. Calling herself a Disneyland “cast member,” she urged the council to vote for the deal.

“The quality of my life and family and friends is at stake,” Trujillo said.

Other supporters of the deal said that its people and residents visiting the parks, not Disneyland, that would be paying any admissions tax, so the burden is still on regular folks.

“I can’t believe so many people are under the impression Disney doesn’t pay taxes,” said Craig Farrow, a resident of Anaheim for over 50 years and member of a pro-Disney group called SOAR.

Still, Moreno and others said Disneyland and the council are disenfranchising the Latino community for the next 45 years, and just as Latinos, who makeup 54 percent of the city, are about to gain representation on the currently all-white council due to the transition next year to a new by-district election system.

And some said that, despite the new investments in neighborhoods trumpeted by council members, parks in poor Latino neighborhoods remain in poor condition, with children playing in the dirt instead of grass fields.

One elderly woman mocked the complaint, saying “People were talking about playing soccer in the dirt. What’s wrong with that? We’re in a drought,” which set off a roar of laughter from the council chambers.

Council members who supported the deal also cited the jobs and economic benefits of the deal.

“The list just goes on and on as far jobs and value,” Murray said.

However, the city hired consultant when asked about 3,000 full time equivalent positions the investment would create couldn’t say whether those would be good paying jobs or low paying jobs, or even part time or full time.

Tait pointed out that the city has a huge unfunded pension and retiree medical liability – to the tune of hundreds of millions of dollars – and that, while he doesn’t support a tax on Disneyland, the deal unfairly prevents residents from deciding whether to levy a tax on Disneyland for over a generation.

The mayor said at some point during an economic downturn the residents will have to choose whether to cut services or tax residents, because taxing tourists will be off the table.

Looking out at the crowd of tourism business owners, Tait said, “There are some things more important than money. And we all know it.

“I think down the road people will rue the day this happened.”

Correction: A previous version of this article stated that Jose Moreno is an Anaheim School Board member. He is a former board member. We regret the error.

Please contact Adam Elmahrek directly at aelmahrek@voiceofoc.org and follow him on Twitter: @adamelmahrek

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  • Ltpar

    Eureka, three Anaheim City Council members in the pocket of Disneyland. This is just another sorry example of elected officials serving “Special Interest” groups as opposed to that of the people who elected them.

  • Boat Nectar

    I want a deal where if I spend $50 dollars today, the government will relieve me of my obligation to pay my income taxes for the next 50 years. If Disney can do it, so can I.

  • Smeagel4T

    I actually think the ticket tax was a bad idea to try and negotiate. With Disney applying a Disney-tax of $0.50 onto every frappacino Starbucks sells in Disneyland and CA Adventure, along with a Disney-tax on every other concession sold in the parks, Anaheim should have been pursuing a simple $0.05 Anaheim-tax on top of the $0.50 Disney-tax. It’s rather hard for Disney to scream about taxing something that Disney is already taxing.

    Besides when it comes to business reality, Disney’s REAL problem was their ticket prices already being up against the $100 psychological threshold. Disney applies the Disney-tax to concessions inside the parks because it knows visitors contemplate the ticket price when deciding to go, but typically pay very little attention to the concession prices before buying something. Anaheim would simply be riding on that same psychological reality along with Disney.

    Just look at the uninterrupted cash flowing all day long into the Starbucks registers at Disneyland and CA Adventure, along with Gibson Girl Ice Cream Parlour, etc, and its easy to see that a $0.05 Anaheim-tax to go with the Disney-tax would pass completely unnoticed by anyone.

  • Steve Downing

    Disney has become the poster child for CORPORATE GREED. No taxes and no accomodation for special needs kids any longer. $$$$$ DRIVEN!

  • Lou Zar

    Any thing Disney does is great for Anaheim. What’s the big deal?

    • Boat Nectar

      How do you say that without laughing?

  • David Zenger

    Actually, now that they are going to be able to pocket any gate tax, it may well behoove Disney itself to start a campaign…for a new gate tax! That way they can use the proceeds to finance their (alleged) improvements. What a sweet deal. And they could explain to their guests from Iowa that it was those pesky voters that did it.

  • Rick_V

    Hopefully the new district voting for council members will help solve some of this BS.

    • David Zenger

      It will slow them down, for sure, but in the end the money will still be poured in – just to more candidates that the Kleptocracy finds suitably compliant.

  • Jason Sumague-Young

    When are all of you “community leaders” going to do more then just talk? Where are the fundraiser to recall these ^$#%#$? Where are the robocalls, ads, lawsuits, mailers, etc. . . You can’t win but just showing up to council and rattling off some prepared speech. I spent thousands fighting these people and nobody would step up so I dropped out. We need a grassroots campaign to destroy these people politically.

    • Greg Diamond

      CATER expects to file suit, Jason. And we have repeatedly “stepped up.”

      • Jason Sumague-Young

        Agreed Greg, I was referring to others who won’t be named.

    • Jose F. Moreno

      Jason Young… your point is very well taken.

  • RyanCantor

    Approving Anaheim’s most significant financial decision this century at 1AM . . .

    This is why we can’t have nice things.

    • Greg Diamond

      Well, the people Anaheim rounded up kept saying this was a “no-brainer” — so they found the right Council majority to support it!

      • Philmore

        Anaheim is being infested by a new species, that I call the Anti- Zombies, they come out at night (Tuesdays) and are identified by their frequent cries of ” NOOOOOO BRAAAAAAAINS”….!

    • Boat Nectar

      Anaheimers always eat sloppy seconds even when they are invited to the King’s table. That’s why they are Anaheimers.

  • RyanCantor

    Approving Anaheim’s most important financial decision of the century at 1AM.

    This is why we can’t have nice things.

  • Paul Lucas

    Why on Earth are Police and fire Unions supporting this deal? That tax is supposed to go to the general fund for which the Police and Fire budgets are derived. This makes no sense except for outright greed and graft.

    • David Zenger

      “Why on Earth are Police and fire Unions supporting this deal?”

      Oh, Paul, really?

      The “public safety unions” march in lockstep with the rest of Anaheim’s kleptocracy. Look who they’ve supported in the last four Anaheim elections – Pringle’s hand-picked puppets who are also supported by other phony do-nothing groups controlled by Pringle or his minions – OCTax and the OC Business Council.

      Apparently the hardhat’s bosses will do anything for a few cocktails and a steak dinner. But they sold out their members pretty cheap on this one.