EDITORIAL:Tax issue is a matter of trust

City officials — and voters — were apparently unaware that a half-cent sales tax increase for special purposes in Laguna Beach would also be applied outside the city.

The Measure A tax was approved by a solid margin of 56% of voters last year following the devastating impact of the Bluebird Canyon landslide on city finances.

The tax proceeds were designed to offset losses from emergency expenditures resulting from the landslide, to the tune of some $10 million at last count.

Things have improved greatly since the tax was placed on the ballot.

At the time, the Federal Emergency Management Agency (FEMA) was refusing to fork over any funds for the repair of city infrastructure destroyed by the landslide.

City officials were beside themselves with worry about how the local municipality could come up with enough money to restore the canyon neighbor- hood and allow rebuilding by private property owners.

The answer was to ask locals and visitors to pay a little bit more each time they bought a meal or a T-shirt — or a car — in Laguna Beach.

The tax was designed to “sunset” in six years, or sooner by Council action, unless it was placed before voters again and approved.

Little did they know that resident voters would actually be charged the half-cent extra when they stepped outside the city to buy a boat, car or other major purchase.

Apparently worried that the out-of-city taxation issue would come back to haunt them, city staff asked the Measure A Oversight Committee to endorse a rebate on the tax charged for high-ticket items outside Laguna Beach.

But the committee decided that it would be unfair to local merchants if the tax was forgiven outside the city, and rejected the rebate idea.

Resident shoppers, they also reasoned, should be willing to pay an extra half-cent on the dollar — wherever the purchase is made — to help the city weather the Bluebird situation.

But we have to wonder if the tax would have been approved at all if voters knew they’d be taxed outside the city.

There is also the issue of trust in the ballot measure process, when rank-and-file voters aren’t made fully aware of the ramifications of their ballot box choices.

It’s an embarrassment, to say the least.

Perhaps the best thing the city can do at this point is halt the special tax as soon as it is fiscally prudent to do so.