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Another local sales tax could be on the ballot for Orange voters to decide

April 30, 2026

With the deadline to submit a ballot measure and another challenging fiscal year coming up, the Orange City Council on Tuesday night, April 28, raised the idea of again putting the question of a local sales tax to voters.

Councilmembers put a half-cent local sales tax before voters in 2024, which, if approved, would have raised about $20 million in city revenue over each of the next 10 years, officials estimated.

Now, city leaders are considering a 1% sale tax measure for the November ballot. But council members decided this week to talk again about the idea at their May 12 meeting, so they can also weigh it against other revenue options, including potentially a tax on hotel stays, cannabis and utility use — options the council had previously raised while discussing next year’s budget.

Since warnings of a $19.1 million annual budget gap, the city had slimmed the deficit to $8 million after a series of steep spending cuts.

Now, after eliminating or freezing more than 50 full-time positions, including some in the Police Department, city staffers said in a report to the council that Orange will begin the fiscal year with a projected $20 million operating deficit and is “seemingly starting right back in the same financial position as the city did during fiscal year 2025 discussions.”

“Revenue isn’t keeping pace with inflation,” said Mayor Dan Slater, who brought the sales tax discussion to his colleagues this week. “We can’t even keep up with the cost of living index, and our revenue is only increasing at 1% a year.

“I’m happy to consider other revenue sources,” he said. “However, there’s absolutely no way we are getting out of this mess without a sales tax increase.”

Sales tax in Orange is currently 7.75%, which includes the base rate collected throughout California and the half-cent tax collected in Orange County for transportation needs.

The city receives a 1% share of the 7.25% statewide sales tax; any revenue generated by an additional local sales tax would flow directly into city coffers.

If voters agree to a 1% local sales tax in November, the city could see an estimated $38 million being collected annually by 2029, according to city projections.

“A one-cent sales tax is great, but we can’t put all our apples in one basket,” Councilmember Kathy Tavoularis said. “That’s why I think it’s important that we don’t divide these discussions, but we look at everything as a menu of items.”

In March, Tavoularis launched a discussion about the prospect of Orange adopting a charter, essentially a city constitution, and the council decided to at least explore the idea — it, too, would require voter approval.

Tavoularis has said she’d like to see taxes on hotel stays and utility use folded into the charter.

The deadline for the city to file a ballot measure with the Orange County Registrar of Voters would be July 14.

Orange County Register

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Another local sales tax could be on the ballot for Orange voters to decide

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