What a terrible time to make permanent a “temporary” tax increase. But that’s what the Santa Ana City Council is looking to do with the city’s sales tax. The base state sales tax rate is 7.25%, which is layered with Orange County’s 0.5 percentage point tax for Measure M transportation needs.
Adding to the burden, in 2018 city voters approved, by a 58% to 42% margin, Measure X, which imposed the 1.5 percentage point added tax. That brings the rate to 9.25% for Santa Ana residents and people who buy things in the city limits. Under Measure X, that 1.5% boost is set to drop to 1% in 2029 and completely sunset in 2039.
Rather than let Measure X take its course, the city wants to skip the agreed-upon sunset timeline and just make the tax permanent now.
As the Register reported on March 23, the council directed staff to prepare wording and explanations for the November 2026 ballot based on “the results of a December poll judging support for the potential ballot measure.” Or, in other words, figure out how best to word the measure so the government can continue taxing sales.
Santa Ana’s 9.25% tax already can be avoided by driving across its Tax Iron Curtain to enjoy a 7.75% rate in Tustin, Irvine or Orange.
Santa Ana’s real budget problems are not due to a lack of revenues, but a lack of fiscal prudence. In 2024, it gave the police a hefty $27 million pay increase, with 4% boosts each in 2024, 2025 and 2026. How many residents got 12% pay increases in that time?
Indeed, as Voice of OC reported at the time, “Cops in Santa Ana are getting a pay raise as part of a new three and half year contract with the Police Officers Association that will cost the city over $27 million. The raises come amid concerns that city revenue will drop by $30 million in five years.” That would be the phase out of Measure X.
Instead of getting wiser with the money city voters voted to fork over to them on the condition that it’s temporary, the Santa Ana City Council has spent as though this revenue stream were eternal. That is no way to govern.
Measure X was passed on the assumption it would expire. A permanent tax extension before the sunset is a bait-and-switch. Any move should be rejected as such, either by the council or the voters.