A little-known pact struck nearly two decades ago has kept city leaders from levying a so-called entertainment tax on Disneyland and Disney California Adventure tickets.
That deal expires in 2016, and City Councilwoman Kris Murray wants to ask voters to make it tougher to enact new taxes in Orange County’s most populous city.
Murray said she didn’t know about the agreement, which was quietly tucked within a $546 million contract adopted in 1996 to pay for infrastructure improvements tied to the opening of California Adventure, Downtown Disney, the Grand Californian Hotel and a Convention Center expansion.
The councilwoman said the timing of her proposed Anaheim Taxpayer Protection Act is a coincidence.
“This isn’t about any one tax; it’s about protecting our residents from all taxes, whether it’s utilities or sales or anything else,” Murray said. “There are people who want to increase taxes in our city, and I think it’s unfortunate that they won’t embrace this measure.”
On April 7, the City Council is to debate Murray’s proposal. If placed onto the November 2016 ballot by the panel and approved by residents, the measure would require that two-thirds of the council, instead of a simple majority, agree to put any tax initiative before voters.
Opponents, including a former Anaheim City School District board president, Jose F. Moreno, said the measure would “bind the hands” of future councils.
The pact dates back to when California Adventure was on the drawing board, with a surrounding commercial neighborhood that had deteriorated into a seedy one with worn roads.
As a condition to get the park built, the City Council in 1996 unanimously agreed to pay up to $546 million for a new parking garage on Disney property, repaved streets, landscaping and renovated utilities. The work was to be funded by $395 million from city bonds underwritten by Disney, along with federal, state and county transportation funds.
Another condition was that the city agreed not to levy an entertainment tax on tickets sold at either of the Disney theme parks through June 30, 2016. If a ticket tax was adopted for entertainment venues in the city, the contract said all the money collected at the theme parks would be reimbursed to Disney until the deal expires.
The entertainment tax ban originally was intended to last forever, said Mayor Tom Tait, who sat on the council in 1996. Tait said that he persuaded his colleagues and Disney to reduce the term to 20 years.
“It was a pragmatic decision because there was a big benefit to fixing up the resort area,” Tait said. “The overall good of the agreement was outweighed by the objectionable parts.”
Several cities across the state, including Inglewood, Pasadena and San Francisco, levy admission taxes.
The notion of charging admission taxes to Disneyland has been debated for decades.
A proposed 5 percent tax on Anaheim’s entertainment venues gained momentum in 1975, but the City Council changed course after facing heavy opposition from Disneyland and the Angels.
The idea came up again in 1991, when Anaheim officials suggested that revenue generated by an admissions tax could help pay for building Disney’s second theme park.
At the time, Disney officials threatened to kill the project if a tax was imposed.
Disney continues to oppose taxes based on ticket sales, Disneyland spokeswoman Suzi Brown said.
“One of the key reasons that Anaheim has been such a success story is due to its policies and initiatives that encourage investment in the city and allow businesses to grow,” Brown said. “It is important that those practices continue to ensure the ongoing vitality of a vibrant community fueled by a strong economy.”
Moreno, who lost a bid for the City Council in November, said he found it “suspicious” that Murray wants to make it more difficult to enact new taxes in Anaheim just as the agreement between the city and Disney is about to end.
“We really have to wonder where this idea is coming from and how she came up with it,” Moreno said.
According to city and state campaign filings, Disney Corp. contributed at least $655,216 during the past two years to five pro-business political action committees.
Four of those PACs spent at least $211,984 to support Murray’s re-election to the City Council in November.
Disney also donated in 2012 to Councilman Jordan Brandman, who has signaled his opposition to Murray’s proposal.
Murray said the funding didn’t influence her. Disney officials said they have not lobbied Murray.
“I don’t make public policy based on who supports my campaigns,” Murray said. “I did my own homework.”
Contact the writer: 714-704-3769 or amarroquin@ocregister.com
