Sales tax not really for the schools
Nice move by our City Manager “Hot” Rod Gould getting the City Council to place on the November ballot an increase of the local sales tax by one-half of a percent, saying the cash is needed to shore up future budget deficits and possibly help the struggling school district.
By placing an advisory measure on the ballot asking voters if half of the estimated $12 million to be generated by the tax should go toward the schools, Hot Rod hopes to get the support of education advocates, a powerful voting bloc in Santa Monica.
But what he’s really doing is trying to get the tax passed by any means necessary so that all of the $12 million will go to cover the shortfall of revenue at City Hall.
Please allow me to explain. The city of Los Angeles is currently experiencing a 16 percent decline in sales tax revenue. Los Angeles’ administrative officer, Miguel Santana, said, “Overall tax revenue has declined by double digits for four quarters straight. The city hasn’t seen this since the Great Depression.”
This means even if this new tax increases passes, we can expect city employees to demand the cash stay in City Hall to prevent cuts and layoffs.
Did you hear Hot Rod tell us why he believes the city of Santa Monica will not experience a similar drop in sales tax revenue that L.A. has experienced? In a letter to this newspaper, he said, “City Hall does not anticipate any revenue reduction.” Mr. Gould picked some very choice words. With this tax he does not anticipate a revenue reduction for the city because the tax will fill that gap. I love this guy.
The National League of Cities, the National Association of Counties, and the U.S. Conference of Mayors report states, “Local governments across the country are now facing the combined impact of decreased tax revenues, a falloff in state and federal aid and increased demand for social services. Over the next two years, local tax bases will likely suffer from depressed property values, hard-hit household incomes and declining consumer spending.”
Go ahead, Mr.Gould, tell the people of Santa Monica that the tax being raised is because City Hall will most likely need the money. It’s OK to be honest with the voters. Unlike the drama queens that run the budgets for our schools, at least Hot Rod is planning ahead.
It was a slick move to place a non-binding advisory measure on the ballot asking the voters if they want this tax for the schools. A majority of voters already spoke in the last special election two months ago and said they want money for the schools so why ask a question when you already know the answer? Because they want the voters to believe the money is for the schools without being required to give it to the schools. That is brilliant.
The root of the problem is the fact that our schools are terrible at budgets and planning. The district knew there was going to be a shortfall, but they failed to adequately plan for it. The people of Santa Monica were willing and able to give money to the schools. In 2008, they gave $60 million a year over the next five years to Santa Monica College in the form of bond money to build facilities for a majority of students who don’t live here and have no love for Santa Monica. They decided that the students of other cities were more important than Santa Monica’s own children because they did not know the local schools needed the money. If the people of Santa Monica gave that $295 million to our schools instead, that bond money could have funded the Measure A shortfall for almost 60 years.
The Santa Monica-Malibu Unified School District is like your teenager that suddenly needs money for something important two minutes before it is required. The fact that we gave millions to SMC shows that the people were willing to give them money if only they asked. Instead we have drama. The lack of accountability in our schools starts from the top.
Our city manager shows an impressive ability to hide in the open. Mr. Gould demonstrates his mad skills when he states “37 of the 79 cities that have enacted such a tax, have found that the increased tax has no impact on taxable sales of any business type.” Does that mean 42 of the 79 cities had a negative impact from this type of tax increase? Were these studies done under different financial circumstances i.e. before the Great Recession started and while the economy was still growing?
Hot Rod, are we going to experience a revenue drop of more than 16 percent, preventing us from collecting the $12 million you project? I strongly believe this tax increase will not bring the revenue promised, yet City Hall will spend it before it collects it. How about we collect the tax for one year, see how much is raised, and then spend only what we collect? Even if this tax passes, we should make the proposed difficult cuts now and build a rainy day fund, just in case this economic storm lasts longer than expected.
David Alsabery is a founding member of the Hot Rod Gould fan club and all around nice guy. He can be reached at alsabery@gmail.com.
