About Measure C
The Costa Mesa Fair Business License Reform, Small Business Protection Measure
Measure C is a City-sponsored ballot measure placed on the November 2026 ballot by the Costa Mesa City Council. According to the City, the measure would modernize Costa Mesa's business license tax system, which has remained largely unchanged for more than 40 years. The measure is designed to increase business license taxes on larger businesses while protecting most small businesses from tax increases. Measure C would not impose any new taxes on residents.
The measure will appear on your ballot like this:
City's argument in favor:
According to the City of Costa Mesa, Measure C would create a more proportional business license tax structure and generate additional funding for local services.
Under Measure C:
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Businesses with $500,000 or less in annual gross receipts (approximately 72% of Costa Mesa businesses) would see no increase in their business license tax.
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Businesses with more than $500,000 in annual gross receipts would pay 50 cents per $1,000 in gross receipts.
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The annual business license tax would be capped at $15,000 for businesses with gross receipts of $30 million or more.
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The City estimates the measure would generate approximately $5.6 million annually for general municipal services.
A chart comparing the current and proposed business license tax rates is provided below.
According to the City, revenue generated by Measure C could help support:
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Public safety and crime prevention
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Police, fire, and 911 emergency response services
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Homelessness programs
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Street and infrastructure maintenance
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Keeping public areas safe and clean
The measure also requires annual independent financial audits and public disclosure of expenditures, with all funds remaining under local control. In addition, the City Council would have the authority to reduce tax rates for particular business categories if economic conditions warrant.
Summary of the Argument Against Measure C:
Opponents argue that Measure C would substantially increase business license taxes on larger businesses without first demonstrating that the City is managing existing revenues efficiently.
While acknowledging that businesses with annual gross receipts of $500,000 or less would not face a tax increase, critics contend that the measure is based on gross receipts rather than profits. They argue that a business's revenue does not necessarily reflect its ability to pay because operating expenses such as payroll, rent, insurance, inventory, and utilities can significantly reduce profitability.
Opponents also note that some businesses could experience significant increases compared to the current business license tax structure. They argue that higher taxes could reduce funds available for hiring, expansion, capital improvements, or investment in local operations, and could potentially result in higher prices for consumers.
Although opponents recognize supporters' claims that Measure C would modernize an outdated tax system and provide funding for important City services, they maintain that annual audits and spending disclosures are not a substitute for fiscal discipline. They argue that the City should first demonstrate stronger cost controls and spending efficiencies before seeking additional tax revenue.
Bottom line: Opponents believe Measure C places an unfair burden on larger businesses, taxes revenue rather than profitability, and should be rejected until the City demonstrates stronger financial stewardship.
Orange County Register Editorial Board Position
The Orange County Register Editorial Board has endorsed a No vote on Measure C. The newspaper argues that Costa Mesa's financial challenges are primarily the result of spending and fiscal management decisions rather than a lack of revenue. The editorial contends that businesses should not be asked to pay higher taxes until the City demonstrates greater budget discipline and more responsible management of taxpayer funds.
City Attorney's Impartial Analysis:
Ballot Argument in Favor:
Note that no opposing ballot argument was submitted.
