SANTA MONICA—On Tuesday, July 13, the City Council unanimously approved a measure that will appear on the November ballot, which, if it passes, will initiate a one-half percent “transaction and use tax.” The new tax must receive a simple majority vote (50 percent plus one) in the November election in order to pass. Money raised from the tax will fund crucial local government services.
At the July 6 council meeting, City Manager Rod Gould explained that a transaction and use tax, for most purchases, looks like a sales tax. It would raise the current rate from 9.75 percent to 10.25 percent. Santa Monica residents would also pay this tax on major purchases that require registrations, such as cars, regardless of where they buy them. However, in order to preserve local auto sales, non-Santa Monica residents would not have to pay the additional tax on automobiles purchased within the city of Santa Monica. At the July 13 meeting, Gould further clarified that the transaction and use tax would only be applicable to items that are currently subject to sales tax; medication and food will still not require any tax.
Representatives from the Santa Monica-Malibu Unified School District and some members of the council would like to see a full 50 percent of the estimated $12 million a year in new tax funds go towards the SMMUSD. They suggested that an advisory measure be placed on the ballot next to the new tax measure asking citizens whether they would like to see the money allocated in such a fashion. Regardless of the outcome of the advisory measure vote, distribution of the funds will still be entirely at the council’s discretion.
Mayor Bobby Shriver was the only member of the council initially opposed to the measure. He feels the council should primarily focus on reducing expenditures, rather than raising new sources of income. Since state and federal revenue sources have been cut back dramatically in recent years, he stressed the importance of local government succeeding economically where state and federal government have fallen short.
“It’s really very important to make the local voters feel that we are handling the money in a very disciplined way,” he told the council.
He also pointed out that sales taxes tend to have a greater impact on the poor than on the wealthy. However, after hearing several community members express overwhelming support for the measure at the City Council meeting, Shriver ultimately voted to put the measure on the ballot, stating, “The people should have the chance to decide this.”