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Costa Mesa council votes to place business license reform on Nov. 3, 2026 ballot
Summary
After staff and a consultant presented polling and a five‑year fiscal outlook, the council voted 5–2 to put a revised business license reform measure on the Nov. 3, 2026 ballot; staff recommended not pursuing a transient occupancy tax increase at this time.
The Costa Mesa City Council voted to place an updated business license reform measure on the Nov. 3, 2026 general election ballot after staff presented polling and fiscal analyses supporting the proposal.
Mayor Stevens moved to accept staff’s recommendation and Mayor Pro Tem Chavez seconded; the motion carried 5–2. City Attorney Kimberly Hall Barlow read the resolutions that would order the measure to the ballot, provide the draft code amendment for voter approval, and set procedures for written arguments and rebuttals.
Staff said the revised ordinance would maintain current rates for businesses with $500,000 or less in annual gross receipts (about 72% of local businesses), establish a rate of $0.50 per $1,000 for businesses above that threshold and set a maximum annual tax of $15,000. Finance staff estimated the change would generate approximately $5.6 million annually — an increase of roughly $4.6 million over current business license receipts.
Consultant Dr. Richard Bernard presented a follow‑up June survey showing broad initial support for the refined ballot language: “63% said either definitely, probably, or lean yes,” he told the council, and he said targeted education could raise that support in simulations. City Attorney Barlow emphasized legal particulars for the ballot and the vote threshold, saying the proposition’s adoption under the referenced rules would require a 0.667 vote of the council to implement the ordinance after voter approval.
The council debate reflected both fiscal urgency and concern for small businesses. Supporters called the update responsible after 41 years without change; opponents urged additional cost‑reduction analysis before adopting a permanent revenue source.
Next steps: the council’s adopted resolutions will be transmitted for consolidation with the statewide general election and the clerk will publish the ballot label and related materials; if voters approve, the city council will certify results and then implement the ordinance as provided by the measure.
