Orange City Council members once again are struggling to agree on the components for a sales tax increase measure city-hired consultants previously said is needed to avoid municipal bankruptcy.
[Read: Orange Inches Closer to Tax Increase Ballot Measures]
“I’m very confused by the fact that everybody agrees that for the last year or two years we’re struggling – can’t pay to keep police officers, we’re going to have trouble starting to fund our fire department – but we’re back at indecision and inaction,” said Councilman Jon Dumitru at the May 26 meeting.
The indecision comes as city leaders now say they are facing an over $20 million deficit in the next year starting in July that they propose balancing by transferring out $15.5 million from three different spending pots and the rest from eliminating vacant positions.
Officials say a one-cent sales tax increase, if passed by voters, will bring in $37 million.
Yet elected officials couldn’t reach a consensus on how long the increase should stay in place if approved in November, with two elected officials previously voicing opposition to any increase.
The council’s failure to reach a consensus comes as the deadline to place the sales tax increase on November’s ballot looms.
According to City Manager Jared Hildenbrand, the last day to get a measure on the November ballot is July 14.
At the May 26 meeting, city council members ultimately voted 5-2 to continue the discussion on the sales tax measure to a future meeting. Councilman John Gyllenhammer and Councilman Denis Bilodeau were the dissenting votes.
Council members also voted 5-2 to place a measure on the November ballot that, if approved, would raise the hotel tax from 10% to 14% for hotels with 11 rooms or more. Gyllenhammer and Bilodeau were the dissenting votes.
It’s not the first time city council members have hesitated to put a sales tax increase before voters.
In 2024, city council members went back and forth struggling to get consensus on a proposed sales tax increase before deciding in the 11th hour to place a 0.5% sales tax measure that ultimately failed.
How Long Should a Sales Tax Increase Last?
Orange officials couldn’t agree on how long the proposed sales tax measure should last – whether it be 10 years, 12 years, 15 years or maintaining the measure indefinitely with both Gyllenhammer and Bilodeau voting against every suggestion.
Any vote on the proposed measure needed a supermajority vote – meaning at least five of the seven council members had to vote in favor of the measure.
Councilwoman Arianna Barrios suggested not placing a timeframe on the proposed sales tax measure and keeping the increase indefinitely until voters decide to end it but her motion only garnered support from Dumitru.
Mayor Dan Slater suggested the measure have a 10-year limit, which garnered support from Councilwoman Kathy Tavoularis – who refused to support any other suggested term limit.
“We’re shooting ourselves in the foot if we go for more than 10 years because I don’t think the voters are going to be happy with that,” Slater said.
Tavoularis said the 10 year limit would force future council members to focus on economic development.
“The reason I want 10 years is I think it keeps future councils’ feet to the fire,” she said at the May 26 meeting. “If they’re sitting on an income from a tax increase that is on there until voters decide they don’t want it, that will cause the council to be lazy.”
The motion for a 10-year limit on the tax barely failed to get enough support with Barrios, Gyllenhammer and Bilodeau voting against it.
Councilwoman Ana Gutierrez suggested a compromise of the proposed tax increase lasting 15-years but her motion also failed to get enough support from her colleagues.
Tavoularis pushed back on the 15-year period.
“We live in a small-c conservative community,” she said. “It’s going to be hard for people to do this and I think putting a 15-year (tax increase) on our residents is a little burdensome at this time.”
As officials in Orange disagree over how long the proposed sales tax increase should last if it’s approved, Santa Ana City Council members are likely to place a measure on the ballot to maintain the temporary sales tax increase approved by voters in 2018 called Measure X.
[Read: Will Santa Ana Revive Sales Tax Measure or Make Budget Cuts?]
It comes as leaders in Santa Ana are grappling with their own projected multi-million dollar deficit.
Dumitru, who initially supported the measure not having a time limit, suggested a 12-year limit on the increase, indirectly calling out Tavoularis for not budging.
“We have one council member who says we need the money but doesn’t want to vote for anything but 10 years,” he said.
Tavoularis said Dumitru’s remarks were unfair.
“We all want to do the right thing. I feel strongly about one term, you feel strongly about another doesn’t mean that you or I care any less than anybody else,” she said.
“You’re afraid,” Dumitru said.
“I’m not afraid of anything. You know what I’m afraid of? The city not working,” Tavoularis said, suggesting they table the vote.
Ultimately, Dumitru’s motion did not receive enough support from his colleagues, with Tavoularis, Gyllenhammer and Bilodeau voting against it
“We’re a council that has been amazing at inaction,” Dumitru said. “I’m just very frustrated.”
Hosam Elattar is a Voice of OC reporter. Contact him at helattar@voiceofoc.org.
