City Manager’s Office
www.santa-ana.org/cm
Item # 22
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
July 7, 2026
TOPIC: Consider Ballot Measure to Remove Sunset on Local Sales Tax
AGENDA TITLE
Consider Ballot Measure to Remove Sunset on Local Sales Tax
RECOMMENDED ACTION
1. Adopt a Resolution calling for the placement of a measure on the November 3, 2026 General Municipal Election ballot to remove the rate reduction and sunset on the local general sales transactions measure in Santa Ana.
RESOLUTION NO. 2026-XXX entitled A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF SANTA ANA GIVING NOTICE OF A GENERAL MUNICIPAL ELECTION TO BE HELD IN THE CITY OF SANTA ANA ON NOVEMBER 3, 2026 AND CALLING FOR THE PLACEMENT ON THE BALLOT OF A
MEASURE FOR SUBMISSION TO THE QUALIFIED VOTERS OF A
PROPOSED ORDINANCE AMENDING THE LOCAL GENERAL
TRANSACTIONS AND USE TAX TO REMOVE THE RATE REDUCTION AND
THE SUNSET PROVISION
2. Adopt a Resolution authorizing written arguments for or against the above- referenced measure.
RESOLUTION NO. 2026-XXX entitled A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF SANTA ANA AUTHORIZING WRITTEN ARGUMENTS FOR THE BALLOT MEASURE SUBMITTED FOR THE NOVEMBER 3, 2026
GENERAL MUNICIPAL ELECTION REGARDING AMENDING THE LOCAL
GENERAL TRANSACTIONS AND USE TAX TO REMOVE THE RATE
REDUCTION AND THE SUNSET PROVISION
GOVERNMENT CODE §84308 APPLIES: No
DISCUSSION
On November 6, 2018, the City’s voters approved Measure X to impose a local 1.5-cent transactions and use tax (referred to as local sales tax) which became effective April 1,
Consider Ballot Measure to Remove Sunset on Local Sales Tax July 7, 2026
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2019. The voter-approved local sales tax Ordinance includes a rate decrease to 1-cent on April 1, 2029, and a complete sunset on April 1, 2039.
Annual local sales tax collection peaked at $86.8 million in FY22-23 and has been decreasing towards an expected collection of $82.8 million in FY25-26. Local sales tax has funded park maintenance, graffiti removal, pothole repairs, 911 response, homelessness mitigation, City streets and sidewalks repairs, and much more. Local sales tax is an important revenue source for the City, as it currently accounts for 20% of the General Fund budget.
There are 3 other cities in Orange County with a local sales tax add-on of 1.50% resulting in a total 9.25% sales tax rate: Los Alamitos (no sunset), Seal Beach (no sunset), and Westminster (1.00% sunsets in 2043 and 0.50% has no sunset).
Cities in Los Angeles County have much higher sales tax rates, as the base countywide rate is 9.75%. Examples of cities with high rates include Long Beach (10.50%), Pasadena (10.50%), Santa Monica (10.75%), and Torrance (10.25%).
On March 17, 2026, City Council approved the staff recommendation to prepare public information materials regarding local sales tax, develop a November 2026 ballot measure to eliminate the local sales tax rate reduction and sunset, and to conduct a tracking survey.
The City’s survey and ballot measure consultant worked with staff to prepare public information materials available in three languages on the City’s website at:
https://www.santa-ana.org/localfunding/.
The tracking survey was conducted at the end of May with 508 completed surveys. The complete report is attached at Exhibit 3. Tracking-survey results vs. the December survey results follow.
December 2025 Survey Tracking Survey
Initial ballot test 64% definitely or probably
yes
64% definitely or probably
yes
After presenting positive
arguments, ballot retest
67% definitely or probably
yes
64% definitely or probably
yes
After presenting negative
arguments, ballot retest
63% definitely or probably
yes
61% definitely or probably
yes
A resolution with the proposed November 2026 ballot measure and Ordinance is attached to this staff report as Exhibit 1.
The proposed November 2026 ballot measure to maintain the 1.5% local sales tax rate permanently requires a simple majority vote to pass.
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Staff recommends the City Council adopt the proposed Resolution to ask Santa Ana voters to decide whether the rate reduction and sunset should be eliminated from the local sales tax.
Additionally, Elections Code Section 9280 provides that the legislative body may direct the city elections official to transmit a copy of the Measure to the city attorney. The city attorney shall prepare an impartial analysis of the Measure showing the effect of the measure on the existing law and the operation of the Measure. The analysis shall be printed preceding the arguments for and against the Measure. The analysis shall not exceed 500 words in length.
Pursuant to the requirements at Section 9282 of the California Elections Code, the legislative body may authorize any member(s) of the City Council to write arguments for or against any measure. In addition, Elections Code Section 9285 provides that the author or a majority of the authors of an argument relating to the Measure may prepare and submit a rebuttal argument or may authorize in writing another person or persons to prepare, submit, or sign the rebuttal argument. Any rebuttal statement shall be filed no later than ten (10) days after the final filing date for the primary argument.
The second resolution provides City Council the ability to designate a member or members to author and file an argument in favor or against the Measure on behalf of the City Council. Arguments will be due no later than 5:00 P.M. on Monday, July 20, 2026. Rebuttal arguments will be due no later than 5:00 P.M. on Thursday, July 30, 2026.
ENVIRONMENTAL IMPACT
There is no environmental impact associated with this action.
FISCAL IMPACT
The estimated election cost for the proposed ballot measure is up to $17,000. If City Council approves the staff recommendation, FY25-26 expenditure savings will be recommended for carryover to FY26-27 to fund the election cost at 01107031-62300.
EXHIBIT(S)
1. Proposed Resolution to Place Measure on Ballot
2. Proposed Resolution Authorizing Written Arguments
3. True North Summary Report for Tracking Survey dated June 2026 Submitted By: Kathryn Downs, Assistant City Manager
Approved By: Alvaro Nuñez, City Manager