LET ANAHEIM’S PEOPLE VOTE… on a 2% “Gate Tax” already!

Let’s cut to the chase here: Item 12 on this Tuesday’s Anaheim Council agenda will be whether or not to put, ON NOVEMBER’S BALLOT, the question of a modest 2% entertainment tax (or “Gate Tax”) on venues that seat 15,000 or more (that would include Disney, Honda Center, Angel Stadium) which would bring our cash-strapped city $55 million to $88 million a year. I could go on as to why I think this Gate Tax is a necessary and fair idea, and I will, but whether or not our six Councilmembers favor the tax, THEY SHOULD ALLOW THE PEOPLE OF ANAHEIM TO HAVE OUR SAY ON THIS.

If they don’t – if any of them vote NO on Item 12 Tuesday – they would be voting to protect multi-billion dollar corporations like Disney – and protecting such a TINY FRACTION of their profitability! – rather than the people of Anaheim, our right to vote, and fiscal sanity as well. God forbid any of the six councilmembers do that, but just in case, write them an e-mail letting them know what you think – just copy and paste the following addresses:

jmoreno@anaheim.net, jodiaz@anaheim.netsfaessel@anaheim.net,

To begin with, this great city is $1.6 BILLION IN DEBT and growing, hurtling toward bankruptcy, due to decades of mismanagement and blind subservience to the resort district … but that’s depressing and boring so let’s put that off till the end of this story.

1. A 2% Gate Tax is Fair and STANDARD.

In our survey of other tourism-dependent towns, SUCH AS WE ARE, most of ’em have entertainment taxes of 5% or more. Pasadena, home of the Rose Bowl, has 5%. The state of Florida, where lies Disneyworld, has 6%. There is nothing excessive or burdensome about our proposed 2%.

Disney, the Honda Center, the Angels, will likely tack the added cost onto their tickets. OR NOT. They don’t have to. Disney is plenty profitable as we’ll detail later. But your average Missouri family that saves up all year to fly out here and enjoy Disneyland is not going to notice an extra 2% anyway.

Every time we try to get a Gate Tax in Anaheim – 30 years now – we get warned that “they’ll have to raise their prices and then nobody will come.” Nonsense. They raise their prices all the time anyway, and have you STOOD in one of those crowds?

The fact that a 2% Gate Tax in Anaheim is considered radical or unthinkable shows the degree to which we’ve become a “COMPANY TOWN.” Well, we don’t want to be a company town. Just as Pinocchio wanted to be a Real Boy, Anaheim wants to be a Real City, run in the interests of its PEOPLE.

2. No we don’t hate Disney or the Angels.

This is not to hurt or punish Disney. We just want them to be good corporate citizens. Bless their hearts, they bring joy to millions of people, and profit greatly from it – $27.5 BILLION PROFITS in 2019 (before Covid), and even DURING Covid $21.5B in 2020 and $22.2B in 2021.

But do we look like a town that generates such profits? Our libraries are still open for very limited hours, and we only have one public swimming pool, in this blistering summer, with even more limited hours, on weekends only. Have you tried making reservations at the Pearson Pool for your kids or grandkids? I have. It’s so in demand, you have to reserve time weeks in advance! In a town of 350,000 that hosts Disneyland, the Angels, and the Honda Center.

Speaking of the Angels, the City / Chamber propaganda brochures boast about how many millions flock to that Stadium every year. But they don’t say what revenue the City gets from that. It’s hard to get the insiders to cough up THAT info. The answer is, we break even – some years we lose money on having the Angels here, some years we get a little. A 2% Gate Tax would change that.

3. Think of the REVENUE!

A 2% Gate Tax, if passed by voters this November to begin in January, would get us from $55 million to $82 million a year. For one thing, we could be paying off our $1.6 billion debt rather than constantly adding to it. But there’s a lot more we could do:

  • Another swimming facility would cost us from 5 to 15 million.
  • A community center, about the same.
  • A senior center would cost us 2.5 to 5 million.
  • A gymnasium would cost about the same.
  • Another dog park would cost us from 300K to a million.
  • Lighting up one of our one-acre parks would cost about 200K.
  • And how about FREE CITYWIDE WI-FI?

But how do we get 5 or 6 of our Councilmembers to vote to ALLOW us to vote for this revenue, especially the 3 who stubbornly said NO to any sort of campaign finance reform last week? I propose:

  • A Gloria Ma’ae Public Swimming Pool;
  • A Jose Diaz Senior Center;
  • A Trevor O’Neil Dog Park;
  • A Steven Faessel Gymnasium;
  • and an Avelino Valencia Community Center!

Well… it’d be worth it.

4. The Magical-Thinking Kingdom.

Moorlach v. Flint: Do we really want Bankruptcy?

Anaheim is in 1.6 BILLION DOLLARS IN DEBT and growing, $715 million of which is “unrestricted net deficit.” Last year’s state auditor’s report listed us as the eighth-most-at-risk, fiscally, in the state. Eighth worst, putting us below 476 other California cities. We’re by far the LARGEST of the twelve cities to receive the dread “red light” warning, putting us in the company of Calexico, El Cerrito and Compton. This red light signifies a “high risk for the potential of waste, fraud, abuse or mismanagement, or [having] major challenges associated with [our] economy, efficiency, or effectiveness.” 

Last month, fabled conservative former Senator and Treasurer John Moorlach, best known for having predicted this County’s 1990’s bankruptcy, wrote a piece in the Register entitled “The Tragic Kingdom of Anaheim,” warning that we would soon have to make the choice of declaring bankruptcy OR [drum roll please] passing a Gate Tax. I don’t think any of us want to declare bankruptcy, and have to sell off our buildings and our prized public utility. I especially don’t think our unions are going to want that, as it’ll enable us to renegotiate the city’s obligations, particularly to our its police and firefighters unions.  (So let’s see some public safety support for the Gate Tax option as well!)

Quoting The Moorlach:

“The torches and pitchforks are out in Anaheim. The mayor has resigned.  The city council is in disarray.  But that’s just the headlines over news that the city has been the plaything of major corporations, government unions and consultants. Buried in sometimes obscure city documents is evidence of deeper rot, the effects, you might say, of long-term corruption.

“Anaheim’s latest annual financial statement reveals an unrestricted net deficit of $715 million, among the worst of California’s 482 cities. That red ink would require every one of the city’s residents – including children, retirees, and the undocumented – to fork over $2,022 just to balance the city’s accounts. By contrast, the neighboring city of Cypress has unrestricted net ASSETS of $1,816 per resident…

“…The normal course of action is to request voters of a city to raise the sales tax rate, as was done in recent years in cities like Stanton and Fountain Valley. But, just as Orange County voters rejected Measure R in 1995 to bail the county out of bankruptcy, Anaheim residents will do the same. They are tired of subsidizing the resort area. So other measures are available and should be considered by Anaheim and the other cities at the bottom of the Orange County city rankings…”

John goes on to present a stark choice between a Gate Tax and declaring bankruptcy, and the longtime conservative critic of public employee unions nearly salivates while describing what could be done under Chapter 9 bankruptcy:

“In bankruptcy, the city can renegotiate its obligations – including corrupt deals it made, with Disney’s support, to buy off powerful government union leaders in the city, especially its police and firefighters unions. Together, Disney, government union leaders and officials of both parties ran the city into the ground. Chapter 9 is the opportunity to end their reign over this tragic kingdom.

“The city of Stockton used Chapter 9 to eliminate $500 million in retiree medical-benefit obligations.  It also defaulted on its Pension Obligation Bonds, stiffing investors.  That’s what a federal bankruptcy court can do.  Stockton now has a very strong balance sheet.

“Perhaps Anaheim could reform the defined-benefit pension plan that is the product of the legal corruption at the heart of its relationship to government unions. It could, for instance, adopt a shared-risk retirement plan – a system in which, like a 401k plan, city employees and taxpayers share in the ups and downs of the city’s investments. The state of Wisconsin followed this strategy and is regularly at the top of annual Pew Charitable Trust lists of the best-funded state pension plans in the nation… The old Chinese proverb that a crisis is an opportunity lies in front of the city of Anaheim.”

A gauntlet like that thrown down by The Moorlach could not be ignored even by a cabal-in-disarray, so a response WAS produced, with the clunky title “Tragic Misreading of Anaheim’s Financial Health.” It was signed by the Mayor Pro-Tem, but it sounds exactly like the pieces Cabal Master Jeff Flint used to write for Harry Sidhu, so I assumed it was really Flint writing from an “undisclosed location.” (Donna and I were there when he was shamefacedly moving his digs from the Chamber offices.)

You can read that response if you want, but it is substanceless cheerleading. It boasts of how big our city is, and how many visitors have been streaming in to our tourist attractions, but it is silent on what revenue we the people actually get from that. It is Magical Thinking, which is why I had planned a final response called “The Magical-Thinking Kingdom,” but fuck it, Moorlach’s original piece stands on its own.

Jeff Flint ran this city for decades and probably still does, from an undisclosed location. Jeff and Todd Ament told our Mayor and Council what to do, every day and every week. Jeff Flint is a LOBBYIST for Disney and the Angels. And you wonder how we got to where we are?


About Vern Nelson

Greatest pianist/composer in Orange County, and official troubador of both Anaheim and Huntington Beach (the two ends of the Santa Ana Aquifer.) Performs regularly both solo, and with his savage-jazz quintet The Vern Nelson Problem. Reach at vernpnelson@gmail.com, or 714-235-VERN.