Costa Mesa City Council Study Session June 9, 2026

The City of Costa Mesa held a City Council Study Session on June 9, 2026, focused primarily on discussing two potential revenue measures: a business license rate reform and an increase in the transit occupancy tax (TOT). The finance manager and consultants presented detailed analyses of the current business license tax structure, which has not been updated since 1985, and proposed a modernization based on gross receipts with a minimum flat rate and a capped maximum rate. The council discussed protecting small businesses from increased fees and considered a rate of 50 cents per $1,000 gross receipts with a cap around $12,500 to $15,000. Regarding the TOT, the council reviewed current rates compared to neighboring cities and debated potential impacts on hotel occupancy and competitiveness, especially with nearby Irvine. The council requested further economic impact analysis from Travel Costa Mesa and emphasized the need to regulate short-term rentals to capture additional TOT revenue. Public safety, infrastructure, and parks maintenance were highlighted as key funding priorities. The council directed staff to refine the ballot language, incorporate educational outreach, and provide additional data on business impacts and facility needs ahead of a July 21 meeting to consider placing these measures on the ballot.