At the risk of sounding like a broken record, Californians already pay the highest statewide sales tax rate in the nation, and the highest gas tax, so why do five Orange County cities have a sales tax increase on their November ballot?
The cities of Buena Park, Orange, La Habra, Seal Beach, and San Clemente are all facing sales tax increases in November. Out of these five cities, four are general use sales tax increases with only San Clemente placing a specific/dedicated tax increase on the ballot.
In Buena Park, (Measure R) residents face a 1% sales tax increase placed on the ballot by a unanimous vote of the City Council. This tax increase is estimated to cost residents an additional $20 million annually. If approved, the city’s sales tax rate would be 8.75%, tying for the second highest sales tax rate in the county. This tax has no sunset date and will continue unless voters repeal the measure.
In Orange, (Measure Z) the city previously reported a $19 million deficit, which it has since whittled down to about $6 million. The council increased spending by almost $31million (since 2021-2022 budget) just on salaries and benefits. One councilmember likened the budget discussions to rearranging deck chairs on the Titanic, unless they were willing to address the structural staffing deficit. The tax increase is expected to cost taxpayers around $20 million annually and will sunset in 10 years.
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In La Habra, (Measure V) Councilmembers Daren Nigsarian, Jose Medrano, and James Gomez each sought election to the council on a platform of “No New Taxes.” The council repeatedly insisted the city’s budget was sound and have laid the blame for their budget problems at the feet of the Los Angeles County Fire Authority’s significant price increase. They fail to mention the council unanimously voted for the contract extension they couldn’t afford without getting competing bids from other agencies. This tax increase is estimated to cost taxpayers an additional $15.6 million annually, and like many other cities, has no sunset date and will continue unless voters repeal the measure.
In Seal Beach, (Measure GG) their current tax rate is already 8.75% placing them well above the countywide rate of 7.75%. The city’s recent economic analysis showed that consumers were spending less on any non-essential items. In short, just as the city published a study showing that residents are hurting financially, they also unanimously voted to place a sales tax increase on the ballot, further increasing costs to their residents. If measure GG is passed by the voters, local sales tax will increase to 9.25%. This sales increase does not have a sunset date and will continue unless voters repeal the measure.
The city of San Clemente (Measure BB) is the only city with a specific, dedicated sales tax on the ballot. If passed, the tax barely generates half the funds the city needs for sand replenishment and coastal infrastructure projects. While we know that tourism drives many of these local economies, and you can’t have tourism without nice, sandy beaches—voters must wonder if this is the right solution.
The county of Orange successfully brought 45,000 cubic yards of sand from our clogged flood channels to Capistrano Beach – saving taxpayers at least $3.5 million. This sand nourishment project repeated this summer, and the project was expanded to include North Beach in San Clemente. Supervisor Katrina Foley has been an outspoken critic of the tax and cites her role in helping to secure more than $250 million in funding for San Clemente beaches from the federal government.
One truth about each of these sales tax measures: Residents will be hurt by this tax increase as they are forced to pay more for most goods purchased in the city, raising the prices of some food, goods, and of course, the price of gas. While each of these councils claim the increase is for public safety, in truth, it is a general tax increase and there is no requirement that all the funds be spent on public safety.
When considering a local tax increase, it is our hope that voters will ask themselves whether they want to pay more for goods, including higher gas prices, and whether their council has done everything in their power to lower costs before considering a tax increase? I’m guessing the answer is a resounding NO.
Sara Catalán is executive director of the Orange County Taxpayers Association.
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