Bankruptcy: City of Orange Can’t Cut Its Way Out of This

August 18, 2025

By Brian Hews, Editor and Publisher. Full disclosure-I have been an Orange resident for 23 years.

Orange isn’t “on the brink”—it’s already halfway over the cliff, and the last thing we need is more magical thinking from the cut-it-all conservative (CAC) crowd.

The city’s consultant warned that without serious action, Orange is staring at a $46.5 million deficit by 2031. Last year, the CACs turned down a modest half-cent sales tax that would have brought in about $19 million a year.

City Hall then hacked away nearly $18 million from the general fund, and guess what—we still have a deficit this year. You can’t cut your way out of structural insolvency. You can, however, cut your way into slower 911 response times, closed libraries, crumbling streets, and a degraded Old Towne that strangles the very business activity everyone claims to love.

Let’s talk about the obvious fix that CACs austerity chorus refuses to say out loud: raise the sales tax. Orange sits at 7.75 percent—near the floor in the region—while neighboring cities charge more and continue to function just fine.

Pico Rivera is over 10 percent, and the sky hasn’t fallen, businesses haven’t evaporated, and residents still buy groceries and back-to-school shoes. If a half-cent had generated $19 million annually, a full one percent would close most of the gap, giving the city room to breathe. At the same time, it modernizes permitting and courts investment instead of scaring it off.

The CACs fairy tale says if we just “get government out of the way” and slice a few more positions, prosperity magically appears. The reality is the opposite: serious companies invest where streets are paved, parks are open, police and fire are fully staffed, and the planning desk can approve a project in months—not years—without being kneecapped by an overreaching design gatekeeper.

Even the consultants told Council that outsiders view our Design Review Committee as a blockade and a brick wall. Streamline it for genuine historic preservation; stop using it as a weapon against growth. That helps the long term. But none of that pays the bills this year.

Here’s another inconvenient truth the anti-tax folks won’t say: Sacramento can and does change the formulas that determine how much of each sales-tax cities keep. The state has a long history of “realignments,” swaps, and back-of-the-envelope tweaks that shift revenue around when the Capitol needs cash.

If we limp along at 7.75 percent and hope some miracle business park saves us, any small, future uptick could be erased the moment the state alters the split. A minimal increase today could be a rounding error tomorrow. A complete one-percent local transactions and use tax gives Orange a cushion against those inevitable shifts and keeps decisions about our streets, our first responders, and our quality of life local.

Meanwhile, the city should stop pretending that the money we’re losing to our neighbors isn’t real. People are already driving to Santa Ana to buy cannabis; we get the impact without the revenue. Allow a few well-regulated dispensaries in the industrial zone and capture the sales tax here—Orange shouldn’t be the moralizing charity case for other cities’ budgets.

Price parking sensibly in Old Towne so visitors turn over spaces instead of circling for twenty minutes and clogging streets. Partner with Chapman University as the asset it is, not a punching bag. None of this is radical. It’s normal adulthood.

For the pearl-clutching CACs worried that a one-percent increase will wreck small business, let’s be honest: what kills Main Street is blight, fear, and red tape, not a dime on ten dollars. Shoppers choose cleanliness, safety, and convenience. They don’t cross-shop tax rates on a latte. What they will notice are closed restrooms, broken streetlights, and fewer patrol units when the budget math finally breaks, which is precisely where the “no new taxes” folks are steering us.

Orange tried the half-measure—half a cent—and the CAcs said no. The city then tried the punishment diet—deep cuts—and it didn’t work. The numbers are still bleeding.

It’s time for a real plan: put a one-percent local sales tax on the ballot with a tight, simple spending plan that funds public safety, street repair, parks, and genuine permitting reform. Implement independent oversight, annual public reporting, and a sunset clause that requires the city to re-establish trust. That’s the accountability voters want, and the stability businesses need. Come on, it’s only $1 for every $100 spent, another 6 cents for your Starbucks frap.

Raise the rate. Fix the basics. Streamline the process. Use targeted new revenue tools like cannabis and parking where they make sense. And stop pretending that the lowest rate in the county is some badge of honor while we barrel toward bankruptcy court.

If Orange wants to stay Orange—safe, historic, and vibrant—it has to invest in itself now, before Sacramento takes a bigger bite and before insolvency takes the rest.