The Orange City Council will hold a special meeting Friday afternoon to decide whether to ask voters to approve adding a local sales tax – Friday is the deadline to add such a measure to November’s ballot, according to the city clerk.
The new fiscal year starts on Monday, and, after weeks of deliberation, the City Council finally signed off on a budget Tuesday. Still, the approved budget projects a roughly $8 million general fund deficit.
The shortfall remains even after officials agreed earlier this month to make millions of dollars in cuts to numerous city services, including freezing many city staff positions.
On Tuesday, councilmembers also voted to nix previously spared city-funded community events after July 10 unless private sponsors step up to finance them. That means this 3rd of July fireworks show could be the city’s last. Concerts in the park, Halloween’s Treats in the Streets and the Christmas tree lighting ceremony all are on the chopping block unless the city can find outside funding to keep them alive.
Combined, the special events cost the city about $500,000 annually.
“The cuts tear my heart out to do, but if we’re gonna be serious about cuts, any event that does not get picked up by a sponsor needs to go,” Councilmember Jon Dumitru said. “It has to be draconian because if we’re gonna tell the public we have financial issues then we have to rightsize everything.”
A list of other approved budget reductions as of June 25 is available on the city’s website.
Councilmember John Gyllenhammer was the sole representative who rejected the budget. He argued that the city needs to make more cuts, including potentially to public safety positions that have been spared thus far.
The city’s budget ad hoc committee, on which Gyllenhammer sits, will continue to meet and continue to make recommendations on cuts, Mayor Dan Slater said.
After approving the budget, the city turned its attention to the prospect of a local sales tax to generate additional revenue.
Councilmembers heard a presentation from consultants who surveyed more than 800 likely voters in Orange in late May and early June to gauge the political feasibility of a 1% sales tax measure winning approval on the November ballot.
The consultants from Fairbank, Maslin, Maulin, Metz & Associates said their data suggests getting the measure to pass would be a close call, with about a 1:1 ratio of people surveyed saying they’d “definitely vote yes” to those saying they’d “definitely vote no.”
The consultants pointed out that public perception of the tax could continue to change as the city raises awareness about its financial woes.
After the presentation, members of the council raised five different motions for various sales taxes. All of them failed. But they felt it was important to continue the conversation and possibly vote again on a tax measure Friday in light of what continues to be a stark budget deficit amid dwindling city emergency reserves drawn down over years of Orange budget deficits.
Slater called for a half-cent tax that would expire in 12 years, but got now support. Councilmember Denis Bilodeau called for a half-cent tax sunseting in 10 years. Only he and Slater supported it.
“I’ve never voted for a tax measure that’s been on the ballot,” Bilodeau said. “But based on our revenues, we cannot maintain this level of public safety.”
Councilmember Arianna Barrios called for a three-quarter cent tax until ended by voters, another proposal that drew no support from other councilmembers.
Then, Councilmember Ana Gutierrez motioned for a 1% sales tax, a measure that only she and Barrios supported.
After all of those proposals, a 4-3 majority of the council voted in favor of a half-cent tax to sunset in 15 years, but it requires five votes in favor to put a tax measure to the ballot. Councilmembers Kathy Tavoularis, Dumitru and Gyllenhammer voted no.
“A tax is an absolute last resort,” Gyllenhammer said, adding that he believes there is still time for Orange to find more cuts and raise more revenue before committing down that road.
City staff said Friday’s meeting will start at 4:30 p.m., but the official agenda has not yet been released.
