With Anaheim planning to balance its budget with borrowed money for the next few fiscal years, Councilman Jose Moreno wants to let city voters decide whether to put a 2% tax on tickets to theme parks and other large venues – a move that could potentially raise from $55 million to $82 million a year for city services and projects.
That money could mean building a second public pool, restoring seven-day-a-week library services, hiring more police and firefighters, or building and staffing a dedicated senior center to serve residents, Moreno said.
He’s been trying to get the council to look at a “gate tax” for several years; with the May resignation of former Mayor Harry Sidhu – who with majority support blocked discussion of the issue – now he can. The potential tax measure is on Tuesday’s meeting agenda.
But Anaheim never having charged such a tax before, that it would require voter approval, and that it would need five of the six council members to agree to even put it on the fall ballot, doesn’t point to a clear path forward for the proposal.
The idea of a gate tax has been the third rail of Anaheim politics for years. A 1996 city agreement with Disney exempted the company’s theme parks from ticket taxes until at least 2016, and the ongoing stadium lease with Angels Baseball – crafted in 1996 when Disney owned the team – includes a clause that if any such tax is imposed on Angel Stadium admissions, the city would rebate the proceeds to the team.
In 2015, as the theme park exemption was set to expire, the City Council (in a vote that split 3-2) opted to extend it for three more decades in exchange for Disney’s pledge to invest $1 billion in and around its parks.
But three years later, with a luxury hotel tax incentive and the gate tax agreement having become “a flash point for controversy and dissension in our community,” as then Disneyland Resort President Josh D’Amaro described it, Disney asked Anaheim to tear up that agreement.
Moreno said Friday he was “floored” by staff’s estimate of how many millions a 2% tax would generate.
HIs proposal would apply the tax to tickets sold by privately operated or managed venues with a capacity of more than 15,000 people (it would exclude the convention center, which the city owns and manages). The bulk of the revenue would come from Disneyland and Disney California Adventure admissions, with a little from the Honda Center, a city venue with outside management.
Moreno said he looked at ticket tax policies in 13 other cities, including Pasadena and Monterey, and most of them add a 5% surcharge. Adding 2% would mean a visitor would pay about $2 more for the cheapest one-day ticket to a Disney park. People spending more on theme park upgrades or luxury boxes at the arena would pay more tax, which Moreno said he thinks is more equitable, and a percentage charge would adjust with inflation.
“To me it’s a great opportunity for a revenue stream that we know we’re going to need,” Moreno said, noting that last year, the council voted to issue more than $130 million in bonds to close a projected multi-year deficit following the pandemic’s hit on revenue.
Hotel taxes – one of the city’s main revenue sources – have rebounded faster than expected after falling off a cliff for the first year or so of the pandemic, but the bonds will need to be paid back and there’s still little room in the budget to expand city staffing or services.
Officials with Disney and the Honda Center declined to comment on the proposed tax.
If the council were to agree, Anaheim voters would see the 2% ticket tax measure on the November ballot. But that seems unlikely, given that Moreno needs four other votes.
Asked about his apparently low odds of success, Moreno said he hopes his generally anti-tax colleagues “would understand that this isn’t about whether they themselves support the tax – it’s about whether they believe the people should have the right to vote on a tax.”
As Moreno sees it, he said, there’s value in talking about the idea publicly, even if it gets rejected, because that’s what democracy is about.
“Even if I don’t have the votes, I just want to give the benefit of the consideration,” he said. “I don’t want to sit in the back room and decide.”
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