Last month, city council members initially held off on moving forward with placing a one-cent tax increase on the November ballot as they keep struggling to quell a longtime structural deficit that, if not addressed, threatens to lead to deeper cuts to core city services.<\/p>\n
[Read: Orange Holds Off on Sale Tax Measure Amid Looming Cuts to Public Safety<\/a>]<\/p>\n Late Tuesday night, Orange City Council members voted 5-2 to direct staff to come back with a 1% sales tax ballot measure that, if approved, would expire in 10 years and would include a plan on how the additional revenue is spent.<\/p>\n If the tax increase passes, Mayor Dan Slater said officials should review whether they want to extend the measure after eight years and stressed there needs to be a plan, priorities and rules on how the money is spent as well as an oversight committee.<\/p>\n \u201cIf we can convince the taxpayers that we\u2019re going to wisely spend this money and that these are the priorities, then I think that the citizens will say, \u2018yes, that makes sense,\u2019\u201d he said.<\/p>\n Councilwoman Arianna Barrios questioned if 10 years was too short of a time but voted in favor of the direction after the city manager said they could continue to debate the measure\u2019s length when it comes back.<\/p>\n \u201cEverything we\u2019ve seen so far said that the 10 year is not going to be near enough so I\u2019m worried that we\u2019re just spitting in the wind,\u201d she said.<\/p>\n Councilman John Gyllenhammer and Councilman Dennis Bilodeau were the dissenting votes.<\/p>\n Bilodeau said voters already rejected a sales tax measure in 2024.\u00a0<\/p>\n \u201cWe asked the voters this question and it was answered, and that was at a half a cent and I know in my council division it failed miserably, so I\u2019m going to pass on this one,\u201d he said.<\/p>\n Tuesday\u2019s vote comes after the same elected leaders two years ago struggled to get consensus on a proposed sales tax increase<\/a> before deciding in the 11th hour to place a 0.5% sales tax measure that ultimately failed.<\/p>\n If this year\u2019s proposed measure is approved by voters, it is expected to bring in $37 million to city coffers.<\/p>\n The deadline to place measures on the ballot is July 14.<\/p>\n Sales Tax<\/p>\n Gyllenhammer said he doesn\u2019t believe the city needs a sales tax increase while giving his own over 30 minute-long optimistic analysis of the city\u2019s financial standing.<\/p>\n \u201cWe are not flush with cash but we have shown our cash and cash investments to have moved up over time,\u201d said Gyllenhammer, who works as a regional director for Amazon.<\/p>\n \u201cWe have shown our operating budget \u2013 although we have voiced massive deficits \u2013 to actually end in small surpluses, at least the last budget cycle, and inside those we are repaying the debts.\u201d<\/p>\n He also said there are still opportunities to pull back on spending before going to residents for money.<\/p>\n \u201cWhenever we tax our residents we\u2019re asking for their money. I do think we have work to do at the city to continue to demonstrate our resolve around spending other people\u2019s money as efficiently as possible,\u201d Gyllenhammer said.<\/p>\n \u201cI would put the collective $37 million expense on our residents if I believed we needed that today. I do not believe we need that today.\u201d<\/p>\n A couple of his colleagues questioned his analysis, with Barrios initially calling his presentation misleading, arguing in part it only went back 12-years and did not capture the impact of the 2008 recession.<\/p>\n She said his analysis of CalPERs returns didn\u2019t go far back enough to show a long term trend.<\/p>\n \u201cMy problem is there is some specific information in here that is misleading and relative to the later question that is really important that we get right, because if we don\u2019t address some of it now, we\u2019re going to have a problem later,\u201d she said, later adding parts of his analysis was valuable.<\/p>\n Last year, city hired consultants warned Orange would face bankruptcy in a couple years if they didn\u2019t adopt a sales tax increase, cut 12% of their general fund and attract new businesses to the city.<\/p>\n At the time, Gyllenhammer disagreed with their assessment but consultants pushed back, arguing that even the city\u2019s own finance department was raising alarms.\u00a0<\/p>\n \u201cAt a certain point you either have to determine I\u2019m going to believe my finance function, I\u2019m going to believe an objective, outside CPA firm, or I\u2019m going to hold to my own assumptions,\u201d said Shawn Stewart, one of the consultants, during a meeting last year. \u201cYou\u2019re welcome to do whatever you\u2019d like to do.\u201d<\/p>\n [Read: Orange On Track for Bankruptcy in Three Years Without \u2018Radical\u2019 Change<\/a>]<\/p>\n During Tuesday\u2019s meeting, City Manager Jarad Hilldenbrand said staff would analyze Gyllenhammer\u2019s presentation and financial assumptions.<\/p>\n Councilwoman Kathy Tavoularis pointed out the city has about $400 million in various obligations they have to pay off and that she spends Saturday mornings picking up trash in her district because the city can\u2019t afford to.<\/p>\n \u201cWhen people are coming up to me and saying, you don\u2019t have a problem, I\u2019m having a little bit of a panic attack, because I can\u2019t get anything done for years,\u201d she said.<\/p>\n Tavoularis added while other cities in the county flourished, nothing has really improved in Orange.<\/p>\n \u201cWhile Garden Grove \u2013 or when I was in high school they called it Garbage Grove \u2013 is now like the best part of the Anaheim Resort and has all this money, we are just the same little Orange and you have Kathy Tavoularis picking up trash and gloves and needles on Saturday mornings, just so her neighbors are happy,\u201d she said.<\/p>\n Hotels, Cannabis and Other Measures<\/p>\n On Tuesday, city council members voted 6-1 to direct staff to bring back a ballot measure to increase the hotel tax from 10% to up to 15% and speak to local hoteliers to get their input.<\/p>\n Bilodeau was the lone dissenting vote and did not speak to his opposition.<\/p>\n According to a staff report, the city is expecting to generate $6.3 million in revenue by the end of June from their current hotel-bed tax and each additional 1% increase on the tax is expected to generate more than $600,000.<\/p>\n Raising the hotel tax to 15% would tie the city with Anaheim as having the highest hotel bed tax in Orange County and bring in an estimated roughly $3 million in revenue annually.<\/p>\n Officials also voted 5-2 to direct staff to come back with more information on legalizing cannabis.\u00a0<\/p>\n Gyllenhammer and Bilodeau were the dissenting votes.<\/p>\n Slater said marijuana can help cancer patients and he rather see people smoke cannabis than take opioids.<\/p>\n \u201cQuite frankly, I\u2019d rather see him use it rather than alcohol, and I\u2019d much rather be sitting in a car next to someone that may have smoked cannabis instead of had too much to drink. Not that either one are good, but at any rate, there is a lot of potential revenue here,\u201d he said.<\/p>\n Council members also voted 6-1 Tuesday to begin the process of putting a measure on the November ballot that if approved would make Orange a charter city \u2013 an idea proposed by Tavoularis as part effort to help address their financial crisis.<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/05\/ORANGE-CITY-COUNCIL-2025-LEOPO-1343.jpg\")
Mayor Dan Slater listens to public speakers during the July 22, 2025, Orange City Council meeting. Credit: JULIE LEOPO, Voice of OC<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/05\/ORANGE-CITY-COUNCIL-2025-LEOPO-0540-2.jpg\")
Councilmember John Gyllenhammer during the July 22, 2025 Orange City Council meeting Credit: JULIE LEOPO, Voice of OC<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/05\/ORANGE-CITY-COUNCIL-2025-LEOPO-1519.jpg\")
Councilwoman Kathy Tavoularis during the July 22, 2025, Orange City Council meeting. Credit: JULIE LEOPO, Voice of OC<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/05\/CivicPictures_2026_April_Grube-2.jpg\")
City of Orange\u2019s Civic Center in Orange, Calif., on April 16, 2026. Credit: Nora Grube, VOICE OF OC<\/p>\n