Tax on Disneyland tickets falls short in Anaheim council vote

A proposal to ask voters to impose a 2% gate tax on Disneyland and the Honda Center failed Tuesday to get enough votes from the Anaheim City Council to gain a spot on the November ballot.

After more than an hour of public debate, the proposed gate tax failed, with none of the five other council members supporting the measure proposed by Councilman Jose Moreno. The council usually has seven members, but Mayor Harry Sidhu stepped down in May after being accused of bribery, fraud, obstruction of justice and witness tampering.

Most of the more than two dozen residents who spoke voiced support for the gate tax, saying the extra revenue is needed for city services. The debate became so boisterous that Mayor Pro Tem Trevor O’Neil had to call a five-minute recess to quell the shouts from supporters of the gate tax.

Had the measure been put on the ballot and approved by a majority of voters, the gate tax would have generated $55 million to $82 million a year to be deposited in the city general fund account, according to a city report.

The proposal was pushed by Moreno, who said he hoped the gate tax money would bolster a city budget that he said has been stretched thin. He suggested Tuesday night that the funds could be used to pay for a city pool, more lighting for parks and support code enforcement programs and senior services.

Moreno argued that Disneyland and the Anaheim Ducks raise their ticket prices regularly, but the city doesn’t benefit from those increases. Moreno, who is serving his last year on the council, has been a vocal critic of tax breaks for Disneyland.

“Disney is going to raise their prices. We are just saying, ‘Shouldn’t the voters decide on raising it a bit for the city?’� he said.

O’Neil said he worried the gate tax could discourage Anaheim tourists who already pay a 15% hotel occupancy tax, one of the highest in the state.

“This can increase the already high tax burden and negatively impact tourism for our city,� O’Neil said.

Councilman Avelino Valencia said the gate tax might be charged against nonprofits that hold fundraising events at large city venues. Moreno said he was open to amending the measure to exempt charitable organizations.

A spokesperson for Disneyland Resort declined to comment on the proposal. A representative for the Honda Center, home of the Anaheim Ducks, did not return calls seeking a comment.

A daily ticket to Disneyland ranges from $104 to $164, depending on the day of the week. A 2% gate tax would have added $2.08 to $3.28 per ticket.

Moreno pushed for the gate tax to generate more revenue, but the city’s primary revenue sources — sales taxes and occupancy taxes charged on hotel guests — have rebounded dramatically since the pandemic struck in 2020 and forced the closure of Disneyland Resort for more than a year and pushed hotel occupancy to near-record low levels.

The city is projected to collect $167 million in hotel occupancy taxes in the current fiscal year, surpassing the previous record high of $163 million in 2018-19, according to city budget records. Ten of the city’s largest hotels, including three Disneyland Resort hotels, generate about 50% of all the city’s hotel occupancy revenues.