Laguna Beach city officials are holding off on placing a tax increase on the November ballot after council and members of the public couldn’t come to a consensus following multiple rounds of citywide surveys and committee formations.

The city has been mulling over three potential tax increases that would help bolster funding for the city, facing a narrow budget gap and looking to support wildfire mitigation and public safety efforts.

The three tax increase options are a hotel tax, a business license tax or a sales tax.

The transient occupancy tax, or hotel tax, is applied to hotel and short-term rentals, meaning that it is mostly paid by those visiting the city longer than daytrippers typically do. The tax would increase from the current 12% to 14% and bring in about $3 million.

The increase would put the city among the highest hotel taxes in OC coastal cities, with most being around 10%. 

A business license tax would affect bars and restaurants in the city, changing their license tax from a $1,650 maximum to 3% of their revenue.

The tax could bring in $8.6 million in revenue, and would largely affect day trippers and tourists – those who dine out most in the city.

A sales tax increase would see the city’s rate go from 7.75% to 8.75% and bring in $7.8 million a year.

The funds would help bolster the city’s narrowly imbalanced budget and provide additional support for wildfire prevention, police and emergency services. The efforts are alongside those already taken to level the budget, like eight staff positions being cut.

During the July 7 meeting, council members were presented with polls conducted in the community that included resident support for the potential tax measures.

Four hundred people whose demographics closely match what is expected at the general election, or “likely voters,” were surveyed on their satisfaction with local government and their likelihood to vote yes on an increased tax measure if it were on the ballot.

At that time, most were likely to support a hotel tax, with 56% approval, while 43% supported a sales tax increase and 23% were in favor of a business tax. However, more than 25% were either unsure or not in support of any.

[Read: Laguna Beach Looking at Business and Hotel Tax Increases]

At the June meeting, council members leaned toward a hotel or business license tax, despite concerns the significant blow that the hotel industry and local restaurants could face with higher costs and fears that the taxes wouldn’t target daytrippers enough.

At the July 7 meeting, City Manager Dave Kiff also mentioned that money might have to be shifted to cover transportation from the Laguna Beach Mission Providence Hospital facing its emergency room closure – the only center of its kind in the city.

[Read: Laguna Beach Residents Against Plans to Close Only Local Emergency Room]

“If the laws don’t change and they continue to plan an operation that is not an ER by name, we may need to find a new way to transport people to that facility,” Kiff said.

Despite the additional research conducted, council, staff and members of the public were all in agreement that more should be done to assess the impact of the taxes.

“We were here two years ago,” councilmember Bob Whalen said at the July 7 meeting. 

“It is disappointing to me, given all the conversation we’ve had about the needs, and the capital, and the 100 year-old infrastructure – very little of which is going to get funded out of our current budget.”

He also suggested that a community group be formed to discuss what city residents would like out of the taxes.

Ultimately, council voted unanimously to continue exploring options and determine the need for additional tax revenue, while aiming for a November 2028 ballot measure instead.

Councilmember Hallie Jones said education should be developed before putting any measures on the ballot.

“I think it goes without saying that we’d like to recapture dollars from our daytrippers. I think it’s a priority of this council, and certainly for the community,” Jones said at the July meeting.

“I would be very supportive of continuing to explore at least a couple options for a short time before embarking on a more robust public education campaign.”