People throughout the country have a greater affection for their cities than any other level of government. They may not know their mayor or council members by name, but they most positively embrace the services and value that these local-est of governments provides.
And this affection is not unwarranted. People feel that they can get more done at the local level.
Even Thomas Jefferson noted this as he said, “The government closest to the people serves the people best.”
But a big question that will come out of this COVID-19 crisis is whether our cities will survive. I don’t mean to be a scaremonger, but cities went into this crisis already in fragile shape. Revenues are restricted, expenses continue to grow, and pension debt compounds. All of this leads to budget pressures at the local level. That is why you have seen so many cities across the state and right here in Orange County, ask their voters to raise local taxes to fund general city services.
Just over the last two election cycles, seven of the 34 Orange county cities raised their sales tax, with Santa Ana pushing the envelope to establish the highest local tax increase to 9.25%, up another 1%.
Where do cities get their money? Most Orange County cities get their funding from a small portion of the property tax, a penny of the sales tax on purchases made in that city, and other small revenues from places like business fees, cable fees and the like.
Some cities have the luxury to have great revenues from a hotel bed tax. Anaheim, Huntington Beach, Laguna Niguel and others see this source as a powerful funder of local services. But this leads me to my point – what happens when these revenues slow, drop or STOP?