WEST HOLLYWOOD—During a West Hollywood City Council meeting on Monday, July 6, members voted in favor of putting a measure on the November 3 ballot to increase the city’s 9.5 percent sales tax to 10.25 percent.
This increase in sales tax was requested by City Manager Paul Arevalo in order to help the city after the impact the coronavirus pandemic had on the city’s budget.
“The City of West Hollywood is experiencing financial difficulties due to the significant
loss of revenues from the broader economic impacts of COVID-19. During the fiscal
year that just concluded on June 30, 2020 (FY20), staff estimates that city revenues
were down by approximately $15 million dollars, or nearly 15% of total general fund
revenues. In the fiscal year starting on July 1, 2020 (FY21), staff estimates that
revenues will be down by approximately $20 million, or nearly 20%. These revenue
declines are significant and severe, and have led to a reduction in contracted services,
the furloughing city employees, the need to lay-off temporary city employees, the need
to freeze the hiring process for vacant city staff positions, the need to secure new longterm debt to complete current capital projects, and the drawdown of city emergency
reserves in order to make up for the revenue losses in FY20 and FY21.
At the same time, the city is seeing a greater need for many of the critical services that the city provides, such as social and senior services, the cleaning and upkeep of public areas,
assistance in retaining businesses and jobs in the City who have been hard hit by the
economic impacts for COVID-19, continued work to address homelessness, as well as
ongoing measures to respond and recover from the coronavirus,” said Arevalo in a memo.
The sales tax increase would increase city revenues by $11 million a year. West Hollywood currently only utilizes 1 percent of the 9.5 percent sales tax, as the rest goes to the state and county.
Four of the five City Council members must support the measure for it to be put on the ballot. The measure must then be approved by a majority of the voters for the sales tax to increase to 10.25 percent.
Cities of Santa Monica, Culver City, and Burbank have already increased their sales tax to 10.25 percent, which is the maximum rate allowed under California law.
