By Eric Engelbert
If you have been watching Santa Ana's city council approve one massive development project after another with little resistance, there is a reason. The city is staring at a financial cliff. A voter-approved sales tax surcharge called Measure X, which generates roughly $83 million per year for city services, begins sunsetting in 2029. When it does, Santa Ana loses approximately $30 million in annual revenue almost overnight. By 2039, the tax disappears entirely. With an existing $19 million structural deficit already in place for the 2026-27 fiscal year and a ballot measure to renew the tax heading to voters this November, the city's finances are under more pressure than most residents realize. Understanding Measure X explains a lot about why Santa Ana has been moving with unusual urgency to attract large-scale development, and what the approval of projects like Related Bristol and The Village Santa Ana actually means for the people who live there.
What Is Measure X and What Does It Fund?
Measure X is a 1.5% local sales tax surcharge that Santa Ana voters approved in November 2018. It took effect April 1, 2019, under the full name: the Santa Ana Neighborhood Safety, Homeless Prevention and Essential City Services Enhancement Measure. The name tells you what the city promised voters the money would be used for, and broadly speaking, it has delivered on that promise.
Measure X funds are classified as a general tax, meaning the city council has discretion over how they are allocated each budget cycle rather than the money being locked into a single restricted purpose. In practice, the funds have supported street and pothole repairs, park maintenance, graffiti removal, public safety staffing, homelessness and housing services, senior programs, and after-school programs. These are not optional amenities. They are the baseline services that make a city functional for the people who live in it.
At its peak, Measure X generated approximately $83 million in a single year. For context, that represents a meaningful share of Santa Ana's total general fund budget of roughly $786 million. The services funded by Measure X are visible in daily life: the parks that get maintained, the response times when someone calls 911, the crossing guards at elementary schools, and the youth programs that keep kids engaged after school hours. When that revenue disappears, those are the line items that get cut first.
The Numbers: What Happens When Measure X Sunsets
The timeline is straightforward and the math is unforgiving. Measure X was designed as a temporary measure when voters approved it in 2018. Beginning April 1, 2029, the 1.5% surcharge drops to 1.0%. That step-down costs the city approximately $30 million per year in lost revenue starting in fiscal year 2029-30. The remaining 1.0% portion then phases out entirely by 2039, at which point the full $83 million in annual Measure X revenue is gone.
Santa Ana is already running a $19 million structural deficit for the 2026-27 fiscal year, meaning the city spends more than it takes in even before Measure X starts to wind down. City staff has been explicit with council members: without either a voter-approved renewal or deep spending cuts, the deficit will widen dramatically beginning in 2029. Cutting $30 million from an annual budget that already has a $19 million hole in it is not a minor adjustment. It requires eliminating programs and reducing services that residents depend on.
The city's own planning documents acknowledge the problem directly, noting that officials will have to start planning now for the revenue drop by controlling spending, modernizing services, and growing the city's tax base through new development. That last phrase, growing the tax base through new development, is the key to understanding every major project approval the Santa Ana City Council has made in the past two years.
What Has Already Been Cut and What Is on the Table
The budget pressure is not hypothetical. The city has already had to make cuts in the current fiscal year to close a gap that started at $13 million and was ultimately reduced to near zero through a combination of spending reductions and revenue adjustments. The process was painful and public.
City staff put the following items on the chopping block during budget deliberations: art programs, crossing guards at schools, after-school programs, senior services, police radio upgrades, and council member aide positions. Five non-mandated city commissions were dissolved, including the youth commission, the parks and recreation commission, and the arts and culture commission. Ambulance coverage was reduced from a 24-hour unit to a 12-hour unit to save $250,000. The Public Works Department absorbed more than $3 million in cuts. The Police Department absorbed approximately $2 million in reductions, though the department's overall budget still grew year-over-year due to staffing costs.
These are the decisions a city makes when it is managing a deficit before the major fiscal cliff has even arrived. The cuts so far are relatively modest compared to what a $30 million per year revenue drop in 2029 would require. City officials have been candid that if Measure X is not renewed and if new development revenue does not come online at scale, the scope of future cuts would be substantially larger.
The November 2026 Ballot: Santa Ana Voters Face a Decision
City leadership is actively considering placing a measure on the November 2026 ballot to renew the 1.5% sales tax at its current rate. If voters approve renewal, the city buys itself additional time to build a more sustainable revenue base through development and other economic growth strategies. If voters reject renewal, the clock to 2029 begins ticking with no safety net in place.
The political dynamics around a renewal vote are not simple. Measure X passed in 2018 with a clear mandate because voters understood what the money would fund. A renewal campaign will need to make the same case, with the added complication that some critics have argued the city has not been sufficiently disciplined about spending in the years since the tax took effect. A counter-narrative published by New Santa Ana, a local watchdog publication, described the deficit as a spending problem rather than a revenue problem, pointing to the city's $786 million total budget as evidence that the issue is prioritization rather than a genuine shortage of funds.
The debate is more nuanced than either side presents it. Both things can be true: the city could tighten spending meaningfully, and the Measure X sunset could still create a structural gap that spending cuts alone cannot close. Whether voters are willing to extend the tax depends heavily on how the next several months of local political conversation unfolds and how effectively city leadership makes the case for renewal.
As a homeowner or buyer in Santa Ana, this vote directly affects the quality of city services you can expect to receive. The outcome of a November sales tax vote is worth following closely regardless of where you stand on local tax policy.
Why Big Developments Are Part of the City's Fiscal Answer
Even if voters renew Measure X in November 2026, the city's leadership understands that a permanent, structural solution to Santa Ana's revenue challenge requires growing the long-term tax base. That is where the development projects come in, and it is why council votes on Related Bristol and The Village Santa Ana were unanimous despite projects of that scale and density typically generating significant community resistance elsewhere in Orange County.
Consider the numbers side by side. The South Coast Plaza Village site currently generates just over $500,000 per year in property and sales tax revenue for the city. Once The Village Santa Ana is fully built out, that same 17-acre site is projected to generate $5.5 million per year, nearly ten times more. Related Bristol, transforming 41 acres of aging retail on Bristol Street, is projected to generate $500 million in net new revenue to the city over the first 30 years of operation. That averages out to more than $16 million per year in new, permanent, non-sunset revenue flowing from a single project.
Together, these two developments represent a meaningful structural offset to the Measure X cliff. They will not replace the full $83 million overnight. The projects take decades to build out and tax revenue scales with occupancy and economic activity across each phase. But by the time the final tranche of Measure X revenue disappears in 2039, a substantial portion of the revenue gap could be covered by the property taxes, sales taxes, and hotel taxes generated by the new development on Sunflower and Bristol. In just the past six years, Santa Ana's development activity has already added approximately $23 million in ongoing new annual tax revenue. The Related Bristol and Village Santa Ana approvals are the next, larger chapter in that same strategy.
This is not an accident. It is a deliberate fiscal policy, executed through land use decisions. The council members who voted unanimously to approve these projects are not simply urban planning enthusiasts. They are managing a budget problem with the tools available to them.
What Measure X and the Development Pipeline Mean for You
If you own a home in Santa Ana, the Measure X story has direct implications for the quality of services your property taxes and city government support. A well-funded city maintains parks, responds quickly to emergency calls, repairs streets, and invests in the neighborhood infrastructure that protects and improves property values. A city cutting its way through a structural deficit does the opposite. Watching how the November 2026 ballot measure performs, and watching how Related Bristol and Village Santa Ana progress through their construction phases, gives you a real-time read on the fiscal trajectory of the city where your asset is located.
If you are considering buying in Santa Ana, the fiscal picture is more nuanced than a simple positive or negative signal. On one hand, a city with a structural deficit and a sunsetting revenue source carries risk for service quality in the near term. On the other hand, a city that has attracted nearly $5 billion in committed private development investment over the past two years, with 5,300 new homes, a hotel, senior living, and tens of thousands of square feet of retail approved and in progress, is a city that institutional capital has bet on heavily. That level of investment confidence from developers like Related Companies, the firm behind Hudson Yards in New York, and C.J. Segerstrom and Sons, the family that built South Coast Plaza, does not happen in cities without a future. It happens in cities that are being repositioned for the next generation.
The Measure X cliff is a real fiscal challenge. The development pipeline is the city's structural answer. Buyers who understand both of those dynamics are better positioned to make informed decisions about when, where, and at what price to enter the Santa Ana market.
The Smart Move Is Knowing What Is Coming Before Everyone Else Does
Measure X, the November ballot, Related Bristol, The Village Santa Ana. These are not separate stories. They are one story about a city working through a fiscal transition and making decisions right now that will shape the next 20 years of life in Santa Ana. Buyers and homeowners who understand the full picture are better equipped to make decisions that hold up over time.
