Tax Debate to Continue as Council Faces Ballot Deadline

The City Council on Monday will continue discussion on sending two tax measures to the Nov. 3 ballot — a parking occupancy tax and a parcel tax to fund fire department infrastructure and street maintenance.

The debate resumes after last week’s meeting, when council members reviewed five possible revenue measures before narrowing the field. Eliminated were proposals for a quarter-cent transaction and use tax expected to generate about $11 million annually, a real property transfer tax projected to raise about $26 million, and a modernized business tax estimated to bring in $10 million to $15 million a year.

That leaves two proposals still under consideration: a 10% parking occupancy tax expected to generate about $5 million annually and a parcel tax projected to raise roughly $30 million each year.

However, the council now faces a tight timeline. A final decision must be made by Aug. 3 to meet Los Angeles County’s Aug. 7 deadline for measures to qualify for the November ballot.

The parcel tax would require approval from two-thirds of voters because it is a special tax dedicated to specific purposes.

If the measures make the ballot, convincing voters may prove to be the council’s biggest challenge.

Pasadena voters approved parcel taxes for libraries in 2022 and for the Pasadena Unified School District, while residents have also absorbed increases in water, sewer and electric rates in recent years.

This November’s ballot is also expected to include 14 statewide propositions, including about $44 billion in bond measures competing for voter attention.

City officials argue additional revenue is needed to address long-term financial pressures.

A staff report presented last week said the city’s expenditures continue to grow faster than revenues, creating a widening structural deficit, although the report does not specify the size of the gap. The council approved a balanced General Fund budget on June 15 using one-time revenues and reserves for the third consecutive year, and the Finance Committee later requested additional discussion of a possible November revenue measure.

Under the proposed fire parcel tax, property owners would pay 24 cents per developed square foot. Staff estimates the measure would generate approximately $30 million annually to fund a 10-year investment plan.

The plan includes rebuilding at least two aging fire stations, constructing an additional station, purchasing new rescue ambulances, fire engines and trucks, hiring the personnel needed to staff them, expanding paramedic services and providing year-round brush clearance.

If council members provide direction Monday, staff is expected to return with final ballot language on July 27 or Aug. 3, giving the council one final opportunity to place the measures before voters ahead of the county deadline.