Foreseeing another challenging fiscal year characterized by rising costs outpacing revenue gains, the Orange City Council is considering three different tax measures to put before voters in the fall.<\/p>\n
The city\u2019s general fund faces an underlying structural deficit driven by debt, about $17.9 million for bonds<\/a>, which city staffers hoped to combat with a series of spending slashes, including hiring freezes, \u201cservice reductions, deferred capital projects and one-time internal fund transfers,\u201d a city staff report to councilmembers said.<\/a><\/p>\n But \u201cthese measures are not sustainable long-term solutions,\u201d the report said. \u201cWithout additional ongoing revenue, future budget balancing will likely require deeper service reductions, deferred infrastructure investment, and increased pressure on public safety and quality-of-life services.\u201d<\/p>\n The council, during it Tuesday, May 12 meeting, considered revenue options that staffers said would help the city find financial footing<\/a>, including a sales tax, \u201ctransient occupancy tax, utility user tax, vacant property tax, cannabis gross receipts tax, parking operator tax, documentary transfer tax, the potential sale of the city\u2019s water and sewer utility systems, as well as modernizing the city\u2019s business license tax.\u201d<\/p>\n After much discussion, the council whittled that list down to three options before asking staffers to conduct more research before the council decides whether to put those choices before voters.<\/p>\n Councilmembers expressed interest in increasing the city\u2019s transient occupancy tax, or a tax on hotel beds, from 10% to up to 15% for hotels with more than 10 rooms and asked staffers to solicit feedback from local hoteliers.<\/p>\n The city\u2019s existing 10% tax on hotel beds is on track to bring roughly $6.3 million into city coffers by the end of this fiscal year, and a 1% increase to that rate could bring in just over $600,000 annually, according to city estimates.<\/a><\/p>\n \u201cWe are the closest thing to Disneyland, and I can\u2019t believe this hasn\u2019t been touched,\u201d Councilmember Kathy Tavoularis said, arguing that Orange should mirror Anaheim\u2019s 15% bed tax. \u201cThe $3 million more a year is needed.\u201d<\/p>\n Councilmembers also decided to explore another sales tax; the council asked voters in 2024 to approve a half-cent local sales tax measure, but the idea was narrowly rejected.\u00a0<\/a><\/p>\n