Regular Adjourned Costa Mesa City Council Meeting July 22, 2026

The City of Costa Mesa held a regular adjourned City Council meeting on July 22, 2026, focusing primarily on potential revenue measures to address the city's long-term financial and infrastructure needs. Staff and consultants presented updated community polling and financial analyses related to a proposed business license tax reform measure, which aims to modernize the tax structure while protecting small businesses. The revised proposal would set a rate of 50 cents per $1,000 of gross receipts for businesses with revenues above $500,000, with a maximum annual tax of $15,000, and is estimated to generate approximately $5.6 million annually. The council discussed the measure's potential impacts, including comparisons with neighboring cities, and the possibility of future council discretion to adjust rates by business type. The council decided not to pursue an increase in the transient occupancy tax due to concerns from the hotel and business community. After deliberation, the council voted 5-2 to place the business license reform measure on the November 3, 2026, ballot, with two members voting against. Additional analysis on business types and profit margins was requested for future consideration. The meeting also reviewed the city's long-term financial outlook and capital improvement needs, including facility, parks, and IT infrastructure assessments, highlighting a projected budget shortfall and the need for increased funding to maintain services and infrastructure.