By Jonathan Friedman
Lookout Staff

July 14, 2010 -- Santa Monica voters on Nov. 2 will decide whether a half-cent sales tax should be used to boost the City treasury. They will also answer a non-binding question whether half the revenue from that sales tax should go to the local school district.

The City Council on Tuesday voted unanimously to place the tax measure and advisory question on the ballot. Mayor Bobby Shriver, who opposes the tax, said he supported the measure because he didn’t “want to preclude public empowerment.” All the other council members favor the tax itself for a City that has a growing divide between expenditures and revenues.

The council heard from several public speakers, including many education activists. Neil Carrey, who heads a committee that was contemplating a November parcel tax measure for the Santa Monica-Malibu Unified School District (SMMUSD), said the committee has rejected this concept in favor of getting behind the sales tax proposal. This recommendation will go to the Board of Education tonight.

“This tax would make more sense,” Carrey said. “It is easier to pass than a parcel tax.” A parcel tax measure requires two-thirds voter support for passage. The sales tax requires approval from a simple majority.

Shriver said he disagreed a parcel tax measure could not pass with a good campaign, despite one being defeated in May. He said the makeup of the electorate is different for a General Election. And he noted with a parcel tax win, the District would have the money for itself and not have to depend on the City for it.

Shriver added that tying the two groups together for this election risked creating “possible confusion of the schools’ very significant financial circumstances with the City’s significant, but manageable, financial circumstances.”

There were a couple public speakers who talked in opposition to the tax proposal. A significant one was Mark Gold, who heads the environmental group Heal the Bay. He admitted his opposition might be surprising because of his connection with progressive politics. Like Shriver, Gold favored the SMMUSD trying another parcel tax measure.

“I really think this is not a very good idea at this time to go forward with a flat tax in this manner,” Gold said. He added, “I have yet to see with all the things going on within the City of Santa Monica the urgent need for the City itself for this fee. I agree that there is a huge need for the school district.”

The debate on the dais became somewhat heated when Shriver referred to Santa Monica as a “rich” City, and not one that is financially troubled. “It might get there if it persists in doing business the same way it has done in the past,” he said.

Mayor Pro Tem Pam O’Connor responded that the City has good business practices, and that is shown with its AAA bond rating. She and Council member Robert Holbrook promoted the tax as a method to help keep the bond rating high. Council member Richard Bloom said although the City might not be in as bad shape financially as other municipalities, Santa Monica is one with a large burden.

“We work in a system … mostly at the State level that is dysfunctional fiscally,” Bloom said. “And the result of that, the City is called on to do more and more things … those are the kinds of things we ought to be looking at, if this revenue measure is successful, to do with that revenue, trying to be creative and do more things for the residents of this city, do things better than we have even in the past.”

The technical name for this item is a transaction and use tax. It will function as an ordinary sales tax with some exceptions. Large purchase items that require registration, such as automobiles, would only be subject to the tax if the buyer is registering the product in Santa Monica. Those who buy the item in Santa Monica but live elsewhere would not have to pay it, while Santa Monica residents who purchase a the product in another city would have to pay the tax. Also, large appliances and construction materials would be subject to the tax only if they are delivered to a location in Santa Monica.

There tax measure does not contain an expiration date. If approved, this measure would raise the local sales tax to 10.25 percent. Santa Monica consumers currently pay a sales tax for the State and County, although some of that money goes back to the City to support local programs. There is no existing City sales tax.

“This tax would make more sense,” Carrey said. “It is easier to pass than a parcel tax.”
    Neil Carrey

“tying the two groups together for this election risked creating possible confusion of the schools’ very significant financial circumstances with the City’s significant, but manageable, financial circumstances.”
“want to preclude public empowerment.”
    Mayor Bobby Shriver

“I really think this is not a very good idea at this time to go forward with a flat tax in this manner, I have yet to see with all the things going on within the City of Santa Monica the urgent need for the City itself for this fee. I agree that there is a huge need for the school district.”
     Mark Gold