Placentia Voters to Decide on Hotel Tax Hike, Council Approves Other Special Assessments

Placentia residents will vote on a proposed increase to the city's hotel bed tax, known as the Transient Occupancy Tax (TOT), in the November 2026 General Election. Concurrently, the City Council has approved several annual special tax rate increases for specific Community Facilities Districts.

If approved by voters, the hotel tax would increase from 10% to 14%. This change is projected to generate an estimated $715,000 in additional annual revenue for the 2026-27 fiscal year, according to a staff report. The tax applies to visitors staying in hotels, short-term rentals, or similar lodging for 30 consecutive days or less. Based on an estimated nightly lodging rate of $145, visitors would pay an extra $5.80 per night.

Rosanna Ramirez, the deputy city manager and acting city manager, stated at the June 16 meeting that visitors would be paying the tax, not residents. She added that the funds would supplement city services, including police and fire, road infrastructure, parks, and public spaces. The staff report noted the additional revenue could address future community needs, support fiscal stability, and help offset increased demands on city infrastructure and services generated by visitors. The current 10% hotel tax rate has been in place since 1985, and an increase would align Placentia with neighboring cities like Anaheim, which has a 15% hotel tax rate.

City Clerk Robert McKinnell noted the hotel tax increase has been under discussion since 2016. Laguna Beach is also considering a similar increase to its hotel tax from 12% to 14%. City Attorney Christian Bettenhausen added that a Citizen’s Oversight Committee, established with the city’s 2018 sales tax increase, would oversee these funds.

Both former Mayor Craig Green, during public comments, and Mayor Chad Wanke stressed the importance of allowing voters to decide on the proposed tax increase.

The hotel tax measure is scheduled for the Nov. 3, 2026 general municipal election ballot, costing the city $8,500 to place it there. If approved by voters, the tax increase would become effective on Jan. 1, 2027. The city plans community outreach with the lodging industry and other stakeholders to gather feedback.

In separate actions, the City Council also approved several special tax rate increases for Community Facilities Districts (CFDs), effective July 1, 2026.

Property owners at The Herald Apartments and The JPI Luxury Apartment, within Community Facilities District 2018-01, will see a 3% increase to their annual special tax rate. This increase is expected to generate $102,038.58 for the 2026-27 fiscal year to fund ongoing maintenance and repairs. CFDs, under the Mello-Roos Community Facilities Act of 1982, finance public improvements with a useful lifespan of five years or more.

For Community Facilities District 2024-01, property owners will experience a 3.01% annual special tax rate increase, generating $2,879 to fund future reconstruction of public infrastructure in Old Town Placentia.

Additionally, Community Facilities District 2014-01 will see a 5% increase to annual special taxes and the annexation of four parcels, assessing a total of 471 parcels. This is projected to generate $316,992.47 to fund public safety services in the area, according to Director of Public Works Chris Tano.