Eliminating an end date for Santa Ana’s local sales tax will be on the Nov. 3 ballot for voters to decide whether to make the local revenue source permanent.
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The measure will require a simple majority in support to pass in November, and if approved by voters, would eliminate the scheduled rate reduction that was baked in when the 1.5% local sales tax was approved in 2018 as Measure X.
If voters don’t agree to making the sales tax permanent in November, then the tax drops to 1% in 2029 and then would go away completely in 2039.
Purchases in Santa Ana include 9.25% in sales tax, which incorporates the base 7.25% collected statewide, a half cent that is collected in Orange County and goes toward transportation, and the 1.5% that goes to the city’s coffers.
City officials said the phase out of the local sales tax would eliminate about $30 million in annual revenue in 2029, and roughly $65 million annually once the tax sunsets in 2039.
Councilmembers voted 5-2 on Tuesday, July 7, in favor of placing the measure on the November ballot. Councilmembers Jessie Lopez and David Penaloza were opposed, saying voters had already made a decision.
“Santa Ana voters were told that this tax was temporary,” said Lopez. “I can’t break that deal with my constituents.”
Funds from the Measure X sales tax currently account for roughly 20% of Santa Ana’s general fund and has paid for things such as pothole repairs, graffiti removal, park and playground maintenance, police and fire response, and homelessness mitigation.
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Councilmember Benjamin Vasquez pointed to cleaner streets, new parks, and rapid pothole repair as evidence the money is working, while Councilmember Phil Becerra said he didn’t want the tax, but warned that losing the revenue would force 20% cuts to essential services across the board.
“We’re not increasing. We’re just going to keep it the way it is,” said Mayor Valerie Amezcua. “Whoever is sitting here in 2029, the first $30 million [to drop], I don’t know how you’ll keep the lights on.”
A poll of 508 likely Santa Ana voters, conducted for the city in late May by True North Research, indicated the tax measure begins with comfortable, but not guaranteed support, according to a report to the City Council. Prospective voters said they value the services provided through the funds, but economic instability and tightened household budgets could affect the outcome for voters already worried about inflation and daily expenses.
And while a majority of voters appeared to back the measure, those who opposed or were unsure most commonly cited the belief that city funds are misspent or mismanaged.
Santa Ana’s Measure X oversight committee, a citizen panel legally mandated to review the spending of the more than $82.6 million in taxpayer funds raised by the tax, has struggled with having enough members and reaching a quorum and went at least seven months without meeting to review last year’s spending audit or offer recommendations for the upcoming budget.
The measure remains feasible, the True North survey found, but only if the city can convince skeptical voters the money won’t be misspent.
Santa Ana is also not the only Orange County city with a local sales tax add-on — 10 other cities collect their own tax, mostly 1%. Los Alamitos and Seal Beach also have 9.25% sales tax with no sunset, according to a staff report.
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