The Westminster City Council will vote on June 8 on whether to place a 1-cent sales tax increase on the November ballot, and on $3 million in spending reductions; the current city budget is $105 million. If adopted, Westminster would have a sales tax rate of 9%, which is higher than every other Orange County city with the exception of neighboring Stanton, and La Habra.
Spending reductions can be enacted by a simple majority vote of the council; placing a tax increase in the ballot requires a four-fifths majority because Westminster is a general law city.
The council is split on how to respond to a structural city budget deficit that is largely the result of City Hall’s over-reliance on now-defunct redevelopment, rising city employee pension costs and the residue of the Great Recession.
Councilmembers Margie Rice (Republican) and Diana Lee Carey (Democrat) want to deal with the deficit by increasing the sales tax levied on residents and visitors who make purchases in Westminster. If they are successful, Westminster will have the highest sales tax in Orange County with the exception of neighboring Stanton. Stanton is facing a voter backlash against the sales tax approved by voters in 2014: a repeal initiative will be on the city’s ballot this November.
Councilman Tyler Diep has been elected on promises to voters not to raise taxes, and has publicly affirmed his intention to keep that pledge. Furthermore, he is skeptical that revenues from a sales tax hike would be spent on city employees rather than used for direct, capital expenditures such as road repair.
“Frankly I don’t trust some of my city council colleagues to not spend the taxpayer monies that we don’t have on salaries and benefits,” Diep told OC Daily.
Rice placed the sales tax increase on the June 8 council agenda, while the spending reductions were agendized by Diep.
The remainder of the council have yet to commit either way. Mayor Tri Ta’s comment’s were ambiguous, declaring the city must “live within its means” while keeping “all options” open. Councilmember Contreras advocated raising revenue through mechanisms such as increasing fees for using city facilities.
Both Carey and Contreras are running for re-election to a second term this November. If a sales tax increase is on the November ballot, where a candidate stands on it will become the central issue of the election. Some observers noted the irony of Carey running for re-election as a supporter of making the people pay more taxes for city services, given she ran for election in 2012 as an opponent of charging motorists to uses a few miles of HOV lane on the 405 freeway.
Westminster Chamber of Commerce President James G. Davidson said the chamber had not yet taken an official stance, instead waiting to see if the council indeed places a sales tax hike on the November ballot.
Davidson mentioned that he was one of five members of the city’s financial task force that examined options for dealing Westminster budget shortfall, and that the task force did not include a sales tax increase among the me the 16 recommendations presented to the city council.