Santa Ana voters to decide whether to make sales tax increase permanent

Santa Ana’s Measure X — a 1.5% sales tax — is scheduled to decrease starting in 2029, meaning the city could lose out on $30 million in revenue. Voters will decide in November whether to let that happen or make the tax permanent.

The City Council approved bringing a ballot measure to voters at Tuesday night’s meeting. Councilmembers Jessie Lopez and David Penaloza voted against the proposal.

The tax measure was approved by voters in 2018 with plans to reduce the rate to 1% by 2029, then eliminate it in 2039. Money from the tax has helped the city fund street maintenance, public safety, youth services and homelessness services.

Santa Ana, like most Southern California cities, is dealing with a tight budget. The tax provides more than $80 million annually, according to the city. Officials warned the council that the tax accounts for about 20% of the general fund. If it were to sunset, major cuts to services would be necessary, they said.

“By allowing voters to decide in 2026, we will have three years to pivot, if needed,” Kathryn Downs, assistant city manager, said. “If Measure X were to be made permanent, we should expect to have a fairly small structural gap to address each year, less than 2%.”

At Tuesday’s meeting, Mayor Valerie Amezcua called the timeline placed on the tax measure in 2018 ridiculous. And if the measure doesn’t pass in November, she said, “Whoever's sitting up here in 2029 … Good luck, because I don't know how you'll keep the lights on.”

“Do you like the QOLT (Quality of Life) teams? Do you like your graffiti removed? Do you like your fire department responding? Do you like your potholes filled? Do you like the services that you're seeing? Do you like the new parks?” Amezcua added. “Because the conversation will be then, where do we cut and who do we cut?”

Lopez said that in 2018, Measure X was presented to voters as temporary.

“I strongly feel like I can’t break that deal with our constituents,” Lopez said.

Councilmember Phil Bacerra said he reluctantly supported leaving it to voters but that the city can’t continue to rely on Measure X.

“Measure X is not going to be enough for us to continue to provide even just the current level of services in the future,” Bacerra said. “To have to cut 20% services across the board. I don't want to have to do that … but we've got to do more. This is not going to be enough.”

The city has until early August to file official ballot language with the Registrar of Voters.