Seal Beach voters are slated to decide on a proposed 0.5% sales tax increase this November in an effort to patch a $6 million budget deficit plaguing the city.
It comes as Seal Beach City Council members grapple with where to make cuts in the budget – from police and fire departments to senior services, parks, street repairs and other essential services.
“I think we have to be realistic about the inexorable fact that overhead is going up faster than revenue,” said Councilman Joe Kalmick during Monday’s city council meeting, in favor of the sales tax increase ballot proposal.
It comes as Orange City Council members narrowly voted late last month to send a 0.5% sales tax increase proposal to city voters there in an effort to patch a multi-million dollar deficit.
[Read: Orange Asks Voters to Raise Taxes To Bail Out City Budget]
Seal Beach’s upcoming ballot proposal comes six years after city voters approved a 1% sales tax increase.
If approved this November, the sales tax rate in the city would be 9.25%.
That would place Seal Beach among Orange County cities with the highest sales tax – along with Westminster, Santa Ana and Los Alamitos, according to the California Department of Tax and Fee Administration.
Seal Beach officials anticipate further cuts for police and fire services, pothole repairs, park maintenance and other essential services as part of their five-year budget outlook if the city cannot generate new revenue.
“We’re not proposing additional services, but to provide to maintain current service levels,” said Barbara Arenado, Seal Beach’s finance director at Monday’s meeting.
On Monday, Seal Beach city leaders – a conservative majority – unanimously voted to put a ballot measure in November asking voters to raise sales tax for the city’s general fund.
All council members agreed revenue needs to be increased despite how some feel about raising taxes.
“The conservative in me is anti-tax, small government and that sort of thing, but this is local government,” said Nathan Steele during the regular meeting.
He later added, “We don’t have the ability for new developments, we don’t have a lot of new revenue sources” compared to other neighboring cities.
“I don’t think anybody is going to avoid Seal Beach’s stores for 50 cents on a hundred dollars – nobody will notice,” Steele said.
Councilman Kalmick pointed out that when Seal Beach voters back in 2018 passed Measure BB – a 1% sales tax increase – that it only bought them five years before considering another tax raise.
“There were cries that ‘We’re all going to die’ and that didn’t happen, fortunately,” he added.
Like his colleagues, Councilman Thomas Moore said he’s initially combative toward the idea of a tax hike, but supports the ballot measure proposal to address the city’s need for failing infrastructure – something he’s noted in the past.
“My priority is to make decisions that best serve our community interests and while I’m inclined to oppose this measure, I would consider supporting it under certain conditions.” Moore said.
Councilwoman Lisa Landau echoed similar concerns and said “it’s very challenging” to find new revenue sources in the small coastal town.
Mayor Schelly Sustarsic agreed the sales tax increase – if approved by voters – will help city coffers.
“It’s hard the position we’re in now, but I think this would provide a good amount [of money] to get us back into a healthy thing instead of trying to scrabble some small things together,” Sustaric said.
Hugo Rios is a Voice of OC reporting fellow. Contact him at hugo.toni.rios@gmail.com or on Twitter @hugoriosss
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