Anaheim council rejects state plan to tap local taxes for high-speed rail

Anaheim's City Council voted unanimously Tuesday to oppose a California High-Speed Rail Authority proposal that would divert future local property and sales tax growth from developments near the city's ARTIC transit center to fund state rail construction, according to Voice of OC.

The unanimous vote puts Orange County's largest city in direct conflict with the state rail authority over control of future tax revenues from one of Southern California's most active entertainment and transit corridors, with city staff warning the plan would severely threaten funding for essential public services.

The California High-Speed Rail Authority has proposed establishing Tax Increment Financing districts within a half-mile radius of proposed station locations. Under the scheme, future growth in property and sales tax revenues from nearby development would flow to the state rail agency rather than city governments. In Anaheim, the targeted zone covers the ARTIC transit center near the Honda Center — the same corridor where the OC Vibe entertainment complex is currently under development.

Councilman Ryan Balius, who spearheaded the council's opposition, said the city spent years planning the district to produce revenue for residents. "We've put these developments in there to generate sales tax for our residents and if the state comes in here and starts to either take property and/or sales tax from us, then we have to make up that revenue somewhere else," Balius said at Tuesday's meeting, according to Voice of OC. City staff determined the proposal would severely threaten funding for infrastructure, public safety, parks and housing.

Two council members voiced support for high-speed rail in principle while drawing a firm line at the financing mechanism. "I do think we should definitely talk about how we support public transportation and the importance of it as a tourism-heavy economy, but we oppose the tax," Councilwoman Natalie Rubalcava said, according to Voice of OC. Councilwoman Natalie Meeks struck a similar tone: "We have prepared and implemented and we are ready to accept high speed rail if it ever gets here, but you can't take the benefits away from us," she said.

Councilwoman Norma Kurtz raised concerns not only about the substance of the proposal but about how Sacramento is advancing it. "Even the way the state is moving this is a little odd. Instead of going through the legislative process as it normally would, it's just being attached to the budget," Kurtz said, according to Voice of OC. The proposal is moving as a trailer bill through the state budget process, bypassing standard legislative review.

Anaheim's opposition is part of a broader statewide pushback. The League of California Cities, California State Association of Counties, California Special Districts Association, Rural County Representatives of California and Urban Counties of California signed a joint opposition letter dated March 2. The groups argued the TIF proposal violates the California Constitution by diverting local tax revenues to a state entity. The letter also objected to provisions that would grant the rail authority zoning and land-use permitting powers within the half-mile station radius — authority the groups say belongs exclusively to local governments under the state constitution.

High-Speed Rail Authority CEO Ian Choudri did not appear at Tuesday's council meeting. The agency's draft 2026 business plan identifies tax increment financing as a key funding mechanism for the proposed Southern California extension that would terminate in Anaheim — a project whose timeline and financing remain deeply uncertain.