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Westminster voters last week decisively approved a one-cent sales tax increase, a measure that supporters and city employees hope will steer the cash-strapped city away from a major budget crisis.

Despite the high support for the sales tax – 60 percent of voters approved it — Councilwomen Diana Carey and Margie Rice, the only members of the current council who supported it — did not fare as well last Tuesday.

Rice lost in her bid for the mayor’s seat to incumbent Tri Ta by nearly 24 percent. Rice, who still has two years left on her current City Council term, was elected mayor for five consecutive terms between 2000 and 2010.

Carey, meanwhile, lost her council seat to traffic commissioner and former Planning Commissioner Kimberly Ho, who campaigned against the sales tax increase and with the message that the current council has dawdled in its response to the financial crisis and has mismanaged funds in the intervening years.

Ho — who was endorsed by the Republican Party of Orange County, District Attorney Tony Rackauckas, and former state assemblyman and former councilman Van Tran, among others – joins fellow ideological conservatives Ta and Councilman Tyler Diep.

Although the sales tax increase is estimated to bring in another $13 to $14 million in revenue each year, it will be up to the new council to decide how to spend it before voters are asked to renew the increase in six years.

Gov. Jerry Brown’s 2011 decision to abolish redevelopment agencies statewide caused an immediate $10.4 million budget deficit in Westminster that forced city leaders to implement drastic staffing cuts and draw down the city’s general fund reserves.

Each year since, the city of 90,000 has had to either make further cuts or take more from reserves to eliminate budget deficits.

Carey and Rice pushed the sales tax increase as a last-ditch effort to maintain current service levels and avoid bankruptcy in 2017, when the city will empty the reserve fund that the council has relied on to balance their budget.

The election is both a win and a loss for city employees, whose unions spent heavily to support the tax measure, as well as the candidacies of Carey and Rice. Carey is the only council member who has supported salary increases for employees, arguing that Westminster has lost employees because of low morale and uncompetitive salaries.

Carey, who believes the sales tax increase will provide much-needed financial stability, fears the zeal for budget cuts will impact city services and a workforce that have already been stripped bare.

“When your police officers are the lowest paid in the county and the you have the lowest number, staffing wise, should some of that money go to employees? Absolutely, otherwise you won’t have them,” said Carey in an interview this week with Voice of OC. “I’m just very concerned that we now have a council that’s ideologically driven.”

Diep and Ta – although reluctant to name specific solutions – have argued the city should consider additional cuts before imposing a regressive tax on businesses and residents.

Meanwhile, city officials have floated other revenue-generating and expense-cutting proposals from raising fees for business licenses to contracting with the Sheriff’s Department for police services. They are currently outlining a plan to relocate City Hall into the largely vacant police department building next door, which would give them the opportunity sell and/or develop the property where City Hall, the senior center and the city council chambers are currently located.

During her campaign, Ho argued that the city has a “spending problem” and that the current city council has failed to improve the city’s financial situation over the past four years.

Ho often points to the success of her skin care business and a Master’s in Business Administration she received from UC Irvine as examples of her qualifications to tackle the city’s budget problems.

She, like Ta, has criticized the council for raising taxes rather than discussing strategies to attract new businesses and developments to the city.

“We were told this has been happening since 2011…and it’s been five years and it’s only worse,” said Ho at a candidate forum earlier this year.

Carey hasn’t decided yet whether she will run again for council, pointing to “dirty tactics” used against her during the election and a cascade of money from groups like the Orange County Taxpayers Association that funded attack mailers against her and Rice.

Both were attacked heavily for supporting the sales tax increase, with mailers comparing them to the Democratic presidential candidate Hillary Clinton, and attacking Rice as a corrupt career politician.

Carey said she will continue to press the council from the outside. “I’m going to have to be a watchdog. I sacrificed myself for this sales tax,” she said.

Rice, pointing to several recent employee lawsuits and complaints filed against the city that included accusations of illegal behavior by Rice, claims the complaints were full of untrue statements that the council majority used as fodder in attack ads.

“It was all a put-up deal…to keep me from getting elected, it was a political thing,” said Rice. “The three of them did that, and I won’t forget it either.”

Contact Thy Vo at tvo@voiceofoc.org or follow her on Twitter @thyanhvo.

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