A legal immigrant defense fund, fixing streets, more than two dozen police officer jobs, graffiti removal, teams to address homelessness and a city homeless shelter, a Vietnamese community liaison, arts and culture events and maintaining and improving the Zoo.
These are just some of the things Santa Ana officials have been able to help fund since voters approved Measure X, a 1.5% sales tax increase, in 2018.
But that funding is going to start to disappear in three years when Measure X begins to sunset in 2029 – striking a roughly $30 million a year blow to their annual revenue before completely dissipating in 2039.
City staff is now warning officials that they will have to start making steep spending cuts unless voters decide to keep the sales tax increase that generated about $83 million last year alive at the ballot this November.
“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.
Last year when those officials approved their budget, they said it would be the last big spending plan they do for a while before they start tightening the spending belt.
But now city leaders are looking to voters to help keep up current city services.
On the heels of staff’s warning, Santa Ana City Council members voted 5-2 this month to direct staff to prepare a tax measure ballot to cancel the sunset of Measure X and maintain it indefinitely.
Mayor Valerie Amezcua said it will be up to the voters if they want to keep the sales tax measure and maintain current city services.
“That’s what’s really exciting for me, personally, it’s up to the voters if they want to keep the services that we have,” she said at the March 17 meeting
“You’re talking about the ability to afford increasing fire contracts, faster investigations, added street lights again, bus shelter maintenance, cleaner, safer parks, Vietnamese outreach, translation, business expo, the Defense Fund for immigration assistance – there’s so many things.”
To view the entirety of what Measure X helps fund, click here.
Councilmembers Jessie Lopez and David Penaloza, who are both running for State Assembly, were the dissenting votes.
Lopez called for a special stand alone study session meeting on Measure X and the ballot proposal to have a discussion for the public on what their budget would look like without the tens of millions of dollars that bolster it from the sales tax.
“If the city is prepared to lose $30 million then what is not going to be included in the budget,” she said at the March 17 meeting. “I would love to see staff bring back a budget that doesn’t include these dollars, because I want the voters to be fully prepared for what this is going to look like.”
Councilman Phil Bacerra said that discussion will already play out when they start to debate the next fiscal year budget and they should discuss other ways to grow revenue rather than always asking residents to cover their shortfalls.
“If our only way of growing revenue is taxing people, that’s not a sustainable model,” he said at the March 17 meeting, criticizing city council members from 2018.
“We saw that the council back then put little to no effort, and they just went right straight to the voters pockets. I opposed Measure X, I’m proud that I did, because I looked at it at the time as something that that council was lazy and wasn’t willing to do the necessary work with staff,” Bacerra continued, ultimately voting in favor of preparing the ballot measure.
Councilman Penaloza didn’t speak to his opposition to preparing the ballot measure.
Preparation of the tax measure in Santa Ana comes as leaders in other OC cities are also expected to ask voters to bolster their municipal budgets through tax increases this year.
[Read: More Tax Increases Could be on the Ballot This Year]
Officials have been grappling with balancing their budgets in recent years as city spending across OC is steadily outpacing revenues – threatening services like public safety, city events and local libraries.
In the City of Orange, officials are debating asking voters to consider making the town a charter city and including tax increases in the proposal after voters shot down a sales tax increase measure two years ago.
In Fullerton, officials are expected to add tax measures to this year’s ballot amid a stark revelation that staff erroneously accounted for over $10 million in reserves that was actually already allocated and that they may nearly deplete their reserve by next year.
In November, Santa Ana officials voted to pay a research company up to roughly $200,000 to conduct a poll to test a potential ballot measure to maintain Measure X indefinitely.
Of the over 620 potential voters surveyed, more than 60% were in favor of the measure, according to the poll results.
Ahead of the ballot measure debate at the March 17 city council meeting, officials dropped a planned discussion to give city executives annual salary range boosts tied to increases in the local consumer price index following Voice of OC reporting.
[Read: Santa Ana Considers Giving Executives Annual Pay Range Raises Amid Budget Struggles]
Amezcua said she is glad the city is preparing for the sunset of Measure X now and if they lose the sales tax money they will be left with the “bare bones” of the budget and facing similar financial problems to other OC cities.
“I don’t want to be like other cities where whoever’s sitting up here is saying, ‘oh gosh, now we’re looking at bankruptcy or how do we fix this the year of.’”
Hosam Elattar is a Voice of OC reporter. Contact him at helattar@voiceofoc.org.
