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Voters living in the City of Orange could decide this November if they want to raise sales tax on themselves in order to keep the city’s budget afloat.
It comes as city officials grapple with an expected $8.7 million spending deficit – down from the initial $19 million projected after city council members made a series of budget cuts and targeted new revenue streams.
“When looking at historical General Fund revenue and expenditure averages, General Fund revenues have not kept pace with the expenditures needed to maintain the services our residents have come to expect,” reads a staff report for Tuesday’s city council meeting.
[Read: City of Orange Marches Closer to Sales Tax Increase to Patch Bleeding Budget]
City staff say the budget crisis was more than a decade in the making, stretching back to the Great Recession.
Since then, staff notes, the city instituted a series of hiring freezes and pushed back critical maintenance projects, like roads and parks.
At Tuesday’s upcoming 6 p.m. meeting, Orange City Council members are expected to consider asking voters this November if they want to raise taxes on themselves to keep the city’s budget afloat.
It comes as nearby Orange County cities grapple with rocky budget outlooks.
[Read: New Taxes? Increasing Revenue in Orange County Amid Budget Shortfalls]
In Santa Ana, officials are discussing a cigarette tax in order to bring in new revenue before the city’s increased sales tax starts sunsetting.
Santa Ana has one of the highest sales tax rates in Orange County at 9.25%, along with Westminster and Los Alamitos.
Officials in Fullerton have long grappled with stagnant budgets and are considering raising hotel taxes in the face of a $9.4 million deficit.
In Orange, city council members are slated to consider a .75% and a 1% sales tax increase, each with a sunset clause of 10, 15 or 20 years.
There’s also a 1% increase proposal that would stay until voters decided to end it.
Depending on what council members decide to send to the ballot, voters in the City of Orange could be deciding whether or not to raise their sales tax to 8.5% or 8.75%.
Cutting the Spending Gap
Earlier this month, Orange City Council members made nearly $5 million in budget cuts, including rolling out a hiring freeze on city hall employees, along with the fire department.
But they refused to put the same freeze on the police department, drawing the public criticism of one councilwoman.
“I just think it’s highly irregular and unfair for us to single out one department over the other in terms of protecting the health and safety of our residents,” Councilwoman Arianna Barrios said during the June 11 meeting.
The police and fire departments, when combined, make up nearly 70% of Orange’s general fund budget – the most flexible pool of money available that can pay for things like after school programs and library upgrades.
Councilman Denis Bilodeau also tried pushing his colleagues to cut some of the police spending by placing a hiring freeze on five officers at the June 11 meeting.
“I’ve been told specifically by the police chief and the fire chief that they don’t need to fill those vacancies at this moment so there will be no reduction in service,” Bilodeau said.
Mayor Dan Slater echoed a majority of the city council’s sentiment at the June 11 meeting on refusing to cap the number of sworn police officers to 165 instead of 170.
“If we don’t keep the original number and we reduce it to 165, we’re going to have fewer police officers, potentially, and that’s all I need to say about it.”
City Manager Tom Kisela – the city’s former police chief – reminded city council members that police employees are the city’s most expensive.
“You have to realize we can cut 40 people that make $5 an hour and we’re keeping people that make $25 an hour – the math isn’t going to work out, but that’s what we’re here for.”
Spencer Custodio is the civic editor. You can reach him at scustodio@voiceofoc.org. Follow him on Twitter @SpencerCustodio.
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