A proposed half-cent sales tax to repair the city’s crumbling streets will not go before voters this fall, after a divided City Council voted 3–2 to shelve the measure rather than place it on the November 2026 ballot.

The vote ended, at least for now, a years-long push to find a dedicated funding source for a road system that staff acknowledged is the worst-rated in Orange County. It also exposed a sharp split on the dais — not over whether the streets need fixing, but over whether a council still dogged by a $2.9 million budget error and eroded public trust had any business asking residents for more money.

Mayor Fred Jung and Council Member Dr. Shana Charles voted to advance the measure. Mayor Pro Tem Nicholas Dunlap, Council Member Dr. Ahmad Zahra and Council Member Jamie Valencia voted to “receive and file” it — a procedural move that killed the item. Because the council’s only August meeting falls after the county’s Aug. 8 ballot deadline, the vote was effectively the measure’s last chance for this election cycle.

Presenting the item, Deputy City Manager Daisy Perez and City Engineer David Grantham laid out a measure modeled on the city’s existing infrastructure fund, established in 2020. At least 75% of the new revenue would have been dedicated to streets until the city’s Pavement Condition Index reached 80 — the “golden number,” in Grantham’s words, that would let the city shift money toward other infrastructure such as buildings and parking lots.

Grantham did not sugarcoat the city’s position. “Everyone knows we’re not doing very well,” he told the council, noting Fullerton had “dropped again to be the worst in the county.” Asked by Jung how long it would take to reach a PCI of 80, Grantham answered: “at least 10 years” — meaning a 15-year sunset would leave only a five-year cushion.

Staff estimated the tax would raise about $15 million a year, or roughly $225 million over 15 years, against a repair backlog pegged at about $200 million in current dollars. The council was offered two versions: one with a 15-year sunset, one with no sunset at all.

Special counsel Mark Mandel walked the council through the unusual mechanics of a special tax, which is earmarked for a specific purpose. Placing it on the ballot required only a simple majority, he explained, but the enabling ordinance ultimately needed a four-fifths council vote — and voter approval by two-thirds — to actually take effect. “You end up in a strange situation,” Mandel noted, where a measure could sit on the ballot even though the tax could never be levied.

Much of the council’s questioning centered on accountability. Zahra pressed on why oversight would fall to the Infrastructure and Natural Resources Committee (INRAC), an advisory body he noted has no subpoena power and “does not have any authority to look at receipts.” He also asked pointedly whether the independent audit would be handled by “the same audit firm … that did not discover the $2.9 million for five years,” and raised the absence of a maintenance-of-effort clause that would stop the city from quietly cutting existing street spending and backfilling it with the new tax. Mandel said such clauses are rare and can lock budgets into formulas that grow “more and more inappropriate” over time.

More than a dozen residents spoke, both in the chamber and online, and the comments ran the full range from enthusiastic support to flat rejection — with trust in the council the recurring theme.

Several urged the council to simply let voters decide. “If the voters don’t want it, they will vote no. Give them that choice,” said Karen Lloreda of District 2, who backed the 15-year sunset. A District 5 resident named Roger echoed the point: “I’m not sure what you are afraid of … I would suggest you trust them.”

The streets themselves drove some of the most vivid testimony. Shirley, a 23-year District 4 resident, described replacing tires and repairing cars, and watching neighbors — including one in a wheelchair — struggle on broken pavement. “My neighborhood is in complete and total disrepair,” she said, noting her streets had been slurry-coated just “once in 23 years.”

Others argued accountability had to come first. Elijah Manasero, who said he’d advocated for a general sales tax, opposed this one on principle: “Most Fullerton residents would agree with me that accountability should come before an increase in taxes.” One speaker pointed to the string of leadership problems and the misplaced $2.9 million, arguing the measure would ultimately backfill salaries and pensions rather than roads. Zee, a longtime resident, ran through a list of Orange County cities charging the same 7.75% sales tax with better roads: “It’s not a money issue. It’s a management problem.”

A recurring thread was lost revenue from cannabis, with multiple speakers noting that dispensary tax dollars now flow to cities like Santa Ana instead of Fullerton. Manish, the INRAC chair, spoke in support of a sunset-limited infrastructure tax while acknowledging the city had underinvested in economic development “over the last 10 or 15 years.”

The deliberation laid bare an unusual alignment: two of the members voting to shelve the tax said they support the idea of it — just not now.

Jung, who said he had supported prior tax efforts, conceded the timing was poor with the $2.9 million error “still cycling through the public,” but framed the city as staring down “a fiscal cliff.”

Charles made the most forceful case to move forward, arguing the council was conflating two separate problems: the general-fund deficit and the streets backlog. Invoking the economic concept of sunk costs, she said past mistakes shouldn’t dictate a forward-looking decision. She defended the sales tax as the fairest option — broader and less regressive than a property-owner-only bond, and exempting food, rent and utilities — and noted polling near 67%. “You miss 100% of the shots you don’t take,” she said, quoting Wayne Gretzky. “There’s a real hunger for this.”

Zahra, who has championed a tax measure in the past, said the problem now was behavior, not funding. “It’s not just enough to admit fault. I think there needs to be accountability,” he said, citing five city managers, a CalPERS hiring settlement and a $10 million deficit reduction “through efficiencies” that he found suspicious. Trust, he argued, “has to be built over time, because it has been eroded over time.” He suggested 2028 as a better target and stressed his opposition “has nothing to do with anything personal.”

Valencia struck a similar note: “I am not for the tax measure at this time; I am for a tax measure in the future,” pointing to the need for better outreach and vetting.

Dunlap, who moved to receive and file, objected to seeking a tax before addressing spending, and called the timeline rushed — “third and goal from the one-yard line, let’s punch it.” He wanted 100% dedicated to streets and a firm sunset, citing “a three-decade history of … increases in taxes not going to our roads and streets, but instead going to labor costs.”

Result: The motion to receive and file passed, 3–2 (Jung and Charles No). The measure was not placed on the ballot.