Santa Ana voters will decide in November whether to keep a 1.5% sales tax increase indefinitely. This decision follows city officials making millions of dollars in budget cuts this summer to balance their finances.
The City Council voted 5-2 on Tuesday to place the measure on the November ballot. If approved by voters, it would remove the sunset provision and prevent a rate reduction for the tax, known as Measure X. Santa Ana joins other Orange County cities exploring taxes to address budget shortfalls.
Mayor Valerie Amezcua stated that without the measure’s approval, future city councils would face difficult decisions on service cuts. She cautioned that emergency response times could lengthen, and pothole repair could take significantly longer, potentially impacting public safety and infrastructure maintenance.
Councilmembers Jessie Lopez and David Penaloza cast the dissenting votes. Penaloza argued that officials have mismanaged taxpayer funds. Lopez emphasized that the tax was initially presented to voters as a temporary measure, and she felt unable to break that commitment to constituents.
Councilwoman Thai Viet Phan highlighted that the ballot measure allows voters to decide the level of city services they desire, including graffiti removal, bus benches, pothole repairs, and funding for youth and senior programs.
Measure X, approved by approximately 58% of voters in 2018, was originally set for a 20-year term, with a gradual reduction to 1% halfway through and full elimination by 2039. Since its implementation in 2019, the 1.5% increase has funded initiatives such as homeless mitigation, public safety, park and street improvements, youth programs, council aides, a Vietnamese Community Liaison, and the city's legal defense fund for immigrants.
Last year, the sales tax increase generated around $83 million. Assistant City Manager Kathryn Downs noted that while the tax helps, even with its continuation, elected leaders will likely grapple with projected deficits for the next ten years, though these gaps would be less drastic than without the tax.
City staff previously warned of a projected $30 million deficit in 2028-29 if the tax rate were to drop as planned. If Measure X is made permanent, the projected deficit for 2028-29 is estimated at $13 million. Downs explained that rising costs are expected to continue outpacing modest revenue increases.
Councilman Phil Bacerra expressed reluctance to keep the tax but acknowledged that avoiding drastic cuts to city services was preferable. He stressed the need for the city to focus on generating more revenue, stating that continued reliance on the sales tax is not a long-term solution to structural deficits.
For the upcoming year, officials approved approximately $11 million in spending cuts and secured $2 million in additional revenue to balance the budget. These cuts included park maintenance, a police after-school program, eliminating vacant positions, and reducing spending on part-time roles. The city also dissolved five resident-run commissions, saving $38,000, while maintaining the council members' combined $420,000 budget for political aides and nearly $80,000 travel budget. Penaloza reiterated calls for greater financial responsibility in managing taxpayer funds.
This report was originally published by voiceofoc.org.
