Santa Monica Sales Tax, Minimum Wage Increase Saturday

By Jonathan Friedman
Associate Editor

June 30, 2017 -- When July begins on Saturday, some people in Santa Monica will get a raise and everybody will pay a higher amount at the register.

July 1 marks an increase in the Santa Monica minimum wage for most non-hotel employees from $10.50 to $12 per hour. And that day is also the debut of a new half-cent sales tax via the the County voter-approved Measure M to fund public transportation projects.

The minimum wage increase is part of a gradual journey to $15 per hour in 2020 that was approved by the City Council last year (“Santa Monica City Council Votes to Hike Hourly Minimum Wage to $15 an Hour by 2020,” January 14, 2016).

It will rise to $13.25 next year and then to $14.25 in 2019 before reaching the goal in 2020. Businesses with 25 or fewer employees are on a different track and will not have to reach the $15 rate until 2021.

Hotels will begin paying most employees $15.66 on Saturday.

The tax increase raises Santa Monica’s rate to 10.25 percent. That is the highest rate allowed by State law. This increase marks the second tax hike for Santa Monica spenders this year.

The rate went up half a percent in April with the introduction of the Measure GSH tax.

That tax was approved by local voters in November. In the same election, voters approved Measure GS recommending the tax revenue be used to fund public schools and affordable housing programs.

The City Council is not obligated to use this tax money for the purposes recommended by the voters. But it is highly unlikely they would not do that.