Proponents of Measure Z say the opposition is misleading the public with the "no new taxes" message on campaign signs citywide.

"When you print a sign that says 'no on Z, no new taxes,' I think it's not a stretch of the imagination to infer that they're misleading the public into believing that a yes vote somehow means a new tax," said Mayor Don Hansen, who initiated the movement to repeal the tax and led the efforts that gathered enough signatures to place the measure on the November ballot.

But those against the measure, which seeks to overturn the collection of a penny and a half on every $100 of assessed property value, say Measure Z would leave the city with a $4.2-million shortfall, a gap that would have to be closed somehow.

The city, they assert, has few options: shut down libraries and eliminate police and fire services or raise fees and taxes to make up for the loss, said Councilman Keith Bohr, who is one of two council members and about a dozen former mayors leading the anti-Z efforts.

"It's not a new tax, it's an old tax," Bohr said. "If you get rid of the old tax and you don't want to get rid of services, then you're going to need new taxes or new fees; ... most people say fees are new taxes."

Bohr said that as soon as enough signatures were gathered to place the measure on the ballot, some council members were suggesting raising the hotel bed tax, or TOT, to make up for some of the loss.

"[Councilwoman] Connie Boardman proposed to increase the TOT by 2% to replace this should it go away," Bohr said. "We held off until the election."

But Hansen said it's simple: A yes on Measure Z repeals the tax, which goes toward safety employees' retirement benefits.

"Yes on Measure Z gives the voters the chance to speak up loud and clear that it's time for the employees to pay their fair share, and it's time for these threats to end," he said.

Hansen said the measure's opposition is stretching the facts and using scare tactics to lead people into believing that everything will fall apart, including things that are not even within the scope of the city budget, like Fourth of July celebrations put on by the city.

"They know what they were doing," he said. "It's intentional, and it's just one piece of their campaign of misinformation ... "

Hansen said that nowhere in their materials do the opponents of the measure say that getting the employees to pay their fair share of retirement costs would close the gap.

Repealing the tax doesn't automatically mean that the employees will pay their full contribution — the city and employee groups have been gradually increasing it through contract negotiations — because Huntington Beach is bound by those contract agreements.

But even if the employees paid their full share, it would still leave the city with a $1.3-million gap.

"The city had a $2.2-million surplus in its budget last year after they said we have a deficit," Hansen said.

Bohr said the city has capped the tax at a penny and a half to ensure that future council members won't increase it at any time and has been working with employee groups.

Bohr pointed to the fact that thousands of residents and dozens of community stakeholders and former mayors are opposing the measure as a grassroots effort for the sake of the city's stability.

But Measure Z supporters have had to seek the financial support of outside developers, including the more than $20,000 given by Signal Landmark, the developer behind the Ridge Project near the Bolsa Chica Wetlands, to get the word out, Bohr said.

Campaign finance records show that Mission Viejo-based Signal Landmark gave Hansen's Huntington Beach 2020 Vision PAC $24,000 in September.

mona.shadia@latimes.com

Twitter: @MonaShadia