Santa Ana officials are considering asking voters in November to maintain indefinitely what was supposed to be a temporary 1.5% sales tax approved in 2018 after slashing millions in spending to balance this year’s budget.
[Read: Will Santa Ana Revive Sales Tax Measure or Make Budget Cuts?]
Measure X, the 2018 sales tax increase, brought in roughly $83 million in additional revenue to city coffers in the past fiscal year helping fund homeless mitigation efforts, fixing streets, graffiti removal and the city’s legal defense fund for immigrant families.
The increase, however, is expected to start decreasing in 2029 before completely vanishing in 2039 with city staff projecting Santa Ana to face a $30 million deficit in 2028-29 that will widen over time.
At their 5:30 p.m. meeting Tuesday, city council members are expected to vote on placing a measure on the ballot that, if approved, would eliminate the time limit for the increase and keep it in place indefinitely.
The expected discussion comes after city staff warned elected officials back in March they would be forced to make steep cuts if voters didn’t decide to keep Measure X alive at the ballot box this year.
“It would be my recommendation that if the city council does not decide to move forward with a ballot measure, that we would begin that process of whittling down the programs, almost like a ramp, if you will, over the next three years, rather than just waiting until last minute, and then doing a very abrupt stoppage of services,” said Assistant City Manager Kathryn Downs at the March 17 city council meeting.
City leaders have already had to make cuts.
Elected officials adopted their budget for this fiscal year after slashing millions in spending to balance a $13 million deficit, including eliminating vacant positions and reducing spending on part time employees to save $5 million.
They also cut spending on park maintenance, significantly dialed back spending on a police run after school program and purged five resident run commissions that advise elected officials on youth services, green space, public landscape, historical landmarks and murals.
At the meeting, officials are expected to finalize dissolving the five boards to save $38,000 while keeping council members’ combined $420,000 budget for political aides or their nearly $80,000 travel budget.
[Read: Santa Ana’s Bleak Budget Leads to Commission Purge]
Beyond the cuts, Santa Ana leaders also increased revenue by about $2 million, including a technology cost recovery fee expected to bring in $750,000, to stave off the remaining deficit.
A host of city council members across Orange County are also eying tax measures as municipal budget deficits grow.
Elected leaders in Orange and Placentia have placed a hotel bed tax increase on the ballot, with Orange city officials also placing a temporary 1% sales increase measure on the ballot as well.
Meanwhile, survey results conducted by city hired consultants showed out of 500 Santa Ana residents polled in May, over 60% were in favor of keeping the tax increase indefinitely.
“Even in a national environment marred by economic uncertainty, political instability, concerns about war, tariffs, and inflation, rising cost-of-living pressures, consumer sentiment reaching record lows, and broader skepticism about government spending, 64% of voters were supportive of the proposed measure,” reads the survey summary report.
According to a staff report, the proposed measure is estimated to cost up to $17,000 to place on the ballot.
Hosam Elattar is a Voice of OC reporter. Contact him at helattar@voiceofoc.org.
