By Jonathan Friedman
Lookout Staff

July 1, 2010 -- The City is polling residents this week to determine their interest in a half-cent sales tax measure that could go before voters in November. Questions about a potential tax are among several being asked in a poll regarding City finances. Additional inquiries are being made about how the Santa Monica officials “prioritize funding.”

Santa Monica consumers currently pay a 9.75 percent sales tax. This includes 8.25 percent that goes to the State, with the remainder going to the County. There is no direct city sales tax, although some of the State and County revenues are handed down to support local programs.

Assistant City Manager Kate Vernez stressed the poll of 500 residents “is simply a barometer to test voter opinions, it is not a done deal. It’s far from a done deal.”

Vernez said the City needs revenue enhancements for two reasons: to overcome a structural deficit and to curb the effect of predicted future State government raids on the City’s treasury. Sacramento has taken $40 million from Santa Monica in the past six years, Vernez said. This includes $21 million this year from the Redevelopment Fund. A court ruling gave the State the OK to take local governments’ redevelopment money. That decision is currently on appeal.

“We know from all the experts that because of the State fiscal crisis, their raids on local and county revenues are going to continue, which is why we’re looking at discussing first in this poll and then with the community potential revenue solutions,” Vernez said.

The City was able to balance its budget for the 2010-11 fiscal year, which begins today, despite a $13.2 million structural deficit. It did this by cutting spending (although with no major program decreases) increasing fees for certain City programs and by taking $2.7 million from the City’s $8.2 million Economic Uncertainty Fund. But City officials say it will not be possible to continue operating on a structural deficit without making major program cuts in the future.

City Manager Rod Gould said at a press conference last month that his staff is looking at other ways to eliminate the deficit, including increasing the property transfer tax, which is assessed to those selling properties. That would also require voter approval. Also, City management is in negotiation with the various labor groups about cost sharing on rising pension and health care costs.

The poll is “staff-initiated” and the approximate cost of $27,000 is coming from the City Manager’s fund. After the initial polling is completed by the Santa Monica-based consultant Fairbank Maslin Maullin Metz & Associates, the results will be analyzed. Staff will determine “whether it’s worth” approaching the City Council with the information, Vernez said. And it will possibly make a recommendation for a tax measure. This must be done prior to Aug. 6 for the item to go before voters in November.

If a City tax is approved for the November election, it could be one of two local-level tax proposals. A committee is currently meeting about a possible Santa Monica-Malibu Unified School District (SMMUSD) parcel tax measure. The SMMUSD last month saw a $198-per-parcel measure defeated when it failed to gain the necessary two-thirds support for passage. It would have passed by a slim margin had the election only taken place in Santa Monica. The SMMUSD also has a significant structural deficit.

“We know from all
the experts that
because of the State
fiscal crisis, their raids
on local and county
revenues are going
to continue, which is
why we’re looking at
discussing first in this
poll and then with the
community potential
revenue solutions,”
   Kate Vernez,
   Assistant City Manager