Laguna Beach delays tax increase proposals until 2028

Laguna Beach officials are putting off a proposed tax increase while they continue studying revenue options for a possible November 2028 ballot measure, according to Voice of OC.

The decision keeps open several tax options as the Orange County coastal city weighs funding needs tied to wildfire mitigation, public safety and other city services.

Voice of OC reported that the City Council voted unanimously at its July 7 meeting to continue reviewing tax options rather than move ahead now with a ballot measure.

The city had examined three proposals: increasing the transient occupancy tax from 12% to 14%, revising the business license tax from a $1,650 maximum to 3% of revenue and raising the sales tax from 7.75% to 8.75%, according to Voice of OC.

The hotel tax increase was estimated to generate about $3 million annually. The business license tax proposal could bring in $8.6 million, while the sales tax increase was projected to produce $7.8 million a year, Voice of OC reported.

A poll of 400 likely voters presented at the July 7 meeting found 56% support for the hotel tax, 43% for the sales tax increase and 23% for the business tax, according to Voice of OC.

Councilmember Bob Whalen said the results were discouraging given the city’s funding needs. “It is disappointing to me, given all the conversation we’ve had about the needs, and the capital, and the 100 year-old infrastructure – very little of which is going to get funded out of our current budget,” Whalen said, according to Voice of OC.

Councilmember Hallie Jones said the city should look for ways to draw revenue from visitors. “I think it goes without saying that we’d like to recapture dollars from our daytrippers. I think it’s a priority of this council, and certainly for the community,” Jones said, according to Voice of OC.

City officials said more research and public education are needed before asking voters to approve any tax increase.