Westminster Council Again Fails to Act on Sales Tax Measure as Financial Crisis Looms

JULIE LEOPO, Voice of OC

Portraits of the Westminster City Council at City Hall.

Westminster’s elected officials did not take action at a last-minute Friday special meeting even as concerns remained about the dire prospects of the city’s finances.

City Council members refused to approve a ballot measure continuing and expanding a  citywide sales tax increase in time for the November election, which, if ratified, staff said would stabilize the city’s revenue streams and continue sufficiently funding police, City Hall administration, and basic city services. 

The predictions by staff were so dire that at one point Councilman Sergio Contreras continued to try putting something before voters, even though the session had by that time already adjourned over a lack of consensus across the panel. 

Without a continuation or expansion of the current 8.75% sales tax, staff have warned, major cuts and staff layoffs — as well as eventual bankruptcy — are on the horizon.

Friday was the last day cities could submit measures to Orange County elections officials to appear on the November ballot.

Council members faced this very proposal earlier this week at a special Monday meeting, but a majority of them appeared to be at a loss for words and could not agree on a way forward.

Residents criticized their elected representatives at Friday’s meeting, urging the council to put the decision in voters’ hands.  

Their calls went unheeded.

“This council by its  inaction to allow a ballot measure to be on the November election slate is by de facto practicing voter suppression,” Jill Dominguez, a resident, said at the meeting. “I want the right to vote on the sales tax measure. Let the people decide the fate of our city and the future of Westminster.”

Multiple motions were made by the council members on Friday, but none of them stuck. 

The first made by Councilman Chi Charlie Nguyen was to approve a ballot measure to allow voters to decide on extending the current 1% sale tax rate hike for ten years but failed to get enough votes. 

The second motion, made by Councilwoman  Kimberly Ho, was to allow voters to decide whether to adjust the tax rate increase to 1.5% for another 20 years. This motion failed for lack of a second.

“We have no right to increase sales tax. That right belongs to the people. I would like to plead with my colleagues to please vote ‘yes,’” Ho said.

The third motion by Contreras was to allow voters to decide on continuing the current sales tax rate indefinitely until they decide to change it but that failed too.

Councilman Tai Do voted against all the motions without voicing a reason at the meeting. Mayor Tri Ta abstained from voting on the motions that were up for a vote.

“We have another two years,” Ta said before adjourning the meeting. Indeed, the next chance for council members to put the tax question on the ballot is 2022. 

But by that time, staff say cuts will have already been made and, if the measure’s approved by voters, it won’t go into effect until April 2023. 

Westminster could face a $17 million budget shortfall, a depletion of its reserves, and eventual bankruptcy a couple years after the expiration of the current tax hike in two years without the expansion of the citywide sales tax increase, according to staff.

To stop this from happening, staff asked for an adjusted 1.5% sales tax increase for an indefinite time period — meaning without a sunset clause or an end date. 

Staring down a similar scenario in 2016, council members agreed to put the original sales tax increase measure on the ballot which in turn got approved by voters. The tax hike went into effect in 2017, bringing the city $11 million to $13 million extra annually.

The city’s financial woes and reliance on the current sales tax increase stem from years of controversy over its spending choices. At the same time, public safety costs have soared, as in the case of most cities, mostly due to large pension increases. Other missteps have also cost taxpayers dearly.

The next Westminster City Council meeting will be held on Aug. 12 at 7 p.m.

Staff writer Brandon Pho Contributed to this Article.

Hosam Elattar is a Voice of OC Reporting Fellow. Contact him @helattar@voiceofoc.org or on Twitter @ElattarHosam.