Anaheim officials are expected to discuss asking city voters to consider a gate tax on Disneyland and other large entertainment venues like the Honda Center – a move that one councilwoman says will keep the city’s budget above water.
It’s a tax proposal previous city council members have routinely dismissed or rejected in Anaheim – a city where Disneyland resort interests spend heavily on local elections even after a major corruption scandal.
But that might change years after federal agents and independent investigators concluded Disneyland Resort interests hold outsized influence on policymaking at city hall.
In early September, Disney-backed City Councilwoman Natalie Rubalcava called for the debate after the city council struggled to patch an over $60 million budget gap earlier this year – having to lean on a mix of bonds and one-time money to fill the gap.
[Read: Anaheim Might Ask Voters to Consider a Disneyland Gate Tax]
When the gate tax proposal came back at the tail end of September, Rubalcava asked city staff to kick the debate to the end of October so that they could bring back more comprehensive details and information on the item.
[Read: Anaheim Delays Disneyland Gate Tax Proposal]
“I know there were questions, and many people assume that Disney called to ask me to delay it. That is not the case,” she said at the Sept. 23 city council meeting.
“We delayed it so that we could come back and have a thoughtful discussion with as much information as possible for the council to really consider this very important initiative.”
The city council is expected to debate the issue at Tuesday’s 5 p.m. public meeting.
City Councilman Carlos Leon said in a Thursday text message that he was looking forward to the discussion and he had not met with Disney representatives about the proposed gate tax.
Rubalcava and the rest of the city council members did not respond to requests for comment on Thursday.
Councilwoman Natalie Rubalcava during her remarks regarding the FBI probe on Aug. 15, 2023. Credit: JULIE LEOPO, Voice of OC
Tuesday’s meeting comes on the heels of LAist reporting last week that a former Anaheim purchasing agent is accusing Anaheim’s top finance official of wasting millions of taxpayers dollars, lying to the city council and protecting a known sexual harasser.
About two weeks after the proposal surfaced, Disneyland executives announced they would be raising their prices for most daily tickets and some annual passes.
The Walt Disney Co. did not respond to a request for comment Thursday.
Last year, Suzi Brown, a spokesperson for Disneyland, said in an email response to questions that the best way to generate revenue for the city was for the company to continue to invest in the Disneyland resort – pointing to their theme park expansion dubbed DisneylandForward.
“The last seven decades prove that when Disney invests in theme park experiences, jobs and revenue are created that the City can count on to fund vital resident services,” she wrote.
“DisneylandForward is the single best way to generate a consistent and new revenue stream for the City’s future.”
City council members approved the project last year and it is estimated to bring nearly $2 billion to Anaheim over the next decade despite concerns from some residents of a rushed process and the sale of public roads to the company.
Stephanie Mercadante posed for a photo after talking to officials and expressing her concerns regarding Disneyland Forward on April 10, 2024 in Anahein, Calif. Credit: Fashion Castillo-Delgadillo
Stephanie Mercadante, a resident who opposed the Disneyland Forward project, lambasted the company for raising ticket prices while opposing the tax.
“While Disney squeezes every last dollar from its guests, it has the audacity to oppose a modest gate tax proposed by the residents of Anaheim, a tax that would help fund our infrastructure, public safety and housing,” she said at the Oct. 14 city council meeting.
Not everyone supports placing a gate tax measure on the November ballot in Anaheim next year.
The OC Register Editorial board is opposing the proposed tax measure, pointing to an influx of about $120 million in revenue expected to free up after the city pays off the bonds from the 1997 Disneyland expansion.
“The city seems to have a structural problem – and one that could get worse with a potential recession, declining tourism and rising public-employee costs,” reads a Sept. 18 article by the editorial board.
“The extra funds from the bonds’ phase-out is good news, but with those bond dollars becoming available it’s almost inconceivable that it’s looking at raising taxes again.”
When the idea was first proposed, Rubalcava said leaning on hotel bed taxes alone won’t close the budget gap.
“We are growing but our budget is not growing,” she said during the Sept. 9 meeting.
The councilwoman also said the 1997 bond repayment money – expected to hit the general fund in a few years – might not be enough to keep the budget afloat.
“I know that we talk about the LPMR (bond repayment) funds, we have had a chance to review the back of the napkin look and it is exhausted and there are ongoing expenses,” Rubalcava said.
Like the OC Register editorial board, Disney-backed Councilwoman Natalie Meeks in September also pointed to the bonds and said the city should look at diversifying its revenue sources when Rubalcava first proposed the tax.
According to council member calendars, Meeks was the only elected official to speak with Disney in-house lobbyist Karalee Darnell about the admission tax last month.
Disney-backed City Councilman Ryan Balius spoke to Disney lobbyist Larry Labrado the day before Meeks, but the disclosure does not specify in his calendar if the discussion was about the admission tax proposal.
As of Thursday morning, the city had not released their lobbyist disclosure reports for July through Sept. 30 on their website.
A family looks at the Disneyland directory map outside the Anaheim, Calif. park Friday, July 8, 2022. Credit: Renee Elefante / Voice of OC
Putting the proposal on the ballot next year would continue a seemingly shifting dynamic between city officials and Disneyland resort interests as city council members begin to lean on the entertainment juggernaut to help address Anaheim’s affordable housing needs.
[Read: Tourists Could Soon Help House Disneyland Resort Workers]
City officials estimated a 2% entertainment tax could generate $55 million to $82 million in annual revenue the last time the gate tax debate popped up in Anaheim three years ago.
Mercadante said that Disney has long benefited from Anaheim thanks to pay to play politics tilting city council votes to their favor.
“Here’s the harsh truth, Disney always wins. The residents always lose. The city bends over backwards to accommodate the resort,” she said. “While families struggle to afford a single day of magic, Disney gets the glory. Anaheim gets the bill.”
Mercadante added residents should benefit too.
“If Disney truly believes in magic,” she said “It’s time they stop hoarding it and start sharing it with the people who make it possible.”
Hosam Elattar is a Voice of OC reporter. Contact him at helattar@voiceofoc.org or on Twitter @ElattarHosam.
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