Voters in another Orange County city could soon weigh in on whether they pay more in taxes to keep their municipal budget afloat as elected leaders across the region grapple with poor financial forecasts and widening budget gaps.

[Read: Orange County Cities Scramble to Patch Budget Gaps]

Officials in a host of Orange County cities last year asked voters to consider paying more in sales taxes as city spending steadily outpacing revenues year after year – threatening public services like public safety, city events and local libraries

Now, voters in Fullerton – a city that has long struggled financially –  may be next to decide on increasing sales taxes after officials directed staff in May to prepare two special sales tax measures.

Last month, city council members directed staff to reconvene their fiscal sustainability ad-hoc committee with potentially new members to help formulate two 0.5% tax measures – one to fund infrastructure improvements like road repairs and another for public safety.

Mayor Fred Jung said a general sales tax measure has been previously opposed by the committee and residents.

“That said, the two tax measures as a special tax were supported by the majority of this council – I think unanimously if I’m not mistaken,” he said at the Nov. 18 city council meeting.

Councilman Ahmad Zahra said he can’t say if he supports either of the proposed tax measures yet until everything’s fleshed out publicly and suggested the council hold a study session on the issue.

“The devils in the details as they say,” he said at the Nov. 18 meeting. “I think every single council member should have input to make sure that this is properly done. If any input is needed it would be a resident driven ad-hoc committee of some sort.”

People walk by Fullerton City Hall on Tuesday, April 11, 2023. Credit: JACK SUNDBLAD, Voice of OC

Fullerton is facing a projected $9.3 million deficit next fiscal year that, if left unchecked, could go up to $10 million by the end of the decade, according to the city budget.

Amid the budgetary concerns, city officials backed away last month from launching a $100,000 immigration legal defense fund and a $100,000 immigrant rent and grocery assistance program with money from their reserves.

[Read: Fullerton Officials Back Away From Aiding Immigrants For Now]

Bleak Budgets Across OC

Voters in Buena Park, La Habra and Seal Beach approved sales tax increase measures last November to help bring in more revenue into their general funds.

[Read: Here’s Where OC Voters Stand on Sales Tax Increases in 2024]

That same year, a special sales tax increase ballot measure that would have earmarked millions of dollars in funding for sand replenishment projects in San Clemente also failed.

Officials in Orange also asked residents in 2024 to approve Measure Z – a ballot measure that would have raised the city’s sales tax from 7.75% to 8.25% but voters rejected the sales tax increase.

This year, paid consultants told city officials that they are heading towards municipal bankruptcy if they don’t make radical changes.

[Read: An End to The ‘Orange Way’: Scrambling to Prevent Municipal Bankruptcy]

Orange isn’t the only city grappling with budgetary issues.

In Anaheim, officials grappled with a $60 million budget deficit earlier this year – closing the gap through a mix of bonds and one-time spending.

In October, city officials there tabled a proposed ballot measure that if approved by voters would institute a 3% admission tax and 10% parking tax on the Disneyland park and potentially generate up to $164 million annually.

[Read: Anaheim Officials Put Disneyland Gate Tax Proposal on Ice]

In Santa Ana, officials are bracing for a projected $30 million deficit in a few years with the sunset of Measure X – a 1.5% sales tax measure approved in 2018, starts to sunset in 2029.

Hosam Elattar is a Voice of OC reporter. Contact him at helattar@voiceofoc.org or on Twitter @ElattarHosam.

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