CITY HALL — The City Council on Tuesday moved toward placing a half percent sales tax increase before voters, deciding by a 6-1 vote to draft a ballot measure for this November’s election.
The proposed measure would raise an estimated $13 million per year for City Hall by adding a half-cent transaction and use tax onto Santa Monica’s 9.75 percent sales tax, raising the rate to 10.25 percent.
As a “general tax” that would raise revenue to be allocated at the council’s discretion, the measure would require a simple majority vote to pass, rather than the two-thirds super majority needed to approve special taxes that direct revenue to specific uses.
The council will make its final decision about placing the tax increase measure on November’s ballot at its next meeting on July 13.
With the exception of Mayor Bobby Shriver, who voted against the proposed measure, members of the council on Tuesday voiced strong support for the idea, saying it was a way to maintain services at a time when the state budget crises is adding to fiscal concerns caused by the recession.
California’s legislature has taken back $40 million in funding originally earmarked for redevelopment projects and other uses in Santa Monica in the past six years, according to City Hall. If current trends continue, the city’s “structural deficit” could grow to $53 million by 2015, Finance Director Carol Swindell has said.
Before the vote, the council received a report on a poll of 500 likely Santa Monica voters conducted last week that showed substantial support for the proposed measure.
Fifty-nine percent of respondents said they would support the measure, the poll found. After hearing additional information about City Hall’s fiscal distress and the types of public safety, education and social services programs the tax increase could support, 64 percent of respondents said they would approve the measure.
In supporting the tax increase measure, Mayor Pro Tem Pam O’Connor said she believes local governments in the future will have to take greater responsibility for generating revenue.
“This is us taking it into our own hands,” she said of the proposal. “And hopefully the voters will agree that it’s the right thing to do.”
Explaining his vote against the proposal, Shriver said the council had not cut costs enough in its most recent budget, so it was inappropriate to ask voters for more revenue.
“You’re not very likely to cut costs when your revenues increase,” he said.
Councilwoman Gleam Davis proposed placing a “companion measure” on the ballot that would ask voters whether half of the revenue raised from the tax hike should be transferred to the Santa Monica-Malibu Unified School District.
If approved for the ballot, the companion measure would serve as a non-binding advisory to the council; Santa Monica’s elected representatives would still have complete authority over how to spend the money.
Although voters in May rejected Measure A, a $198 per parcel tax to support local schools, it’s clear education supporters are a powerful local voting block. Measure A received 64.25 percent of the vote from Santa Monica and Malibu voters — just short of the two-thirds the measure needed to pass but enough to constitute a landslide in a general tax election. Santa Monica voters were more likely to back the tax, with 66.7 percent of voters here approving Measure A, compared with 51 percent in Malibu.
The school board is contemplating placing a new funding measure before voters in November but has yet to make a decision. The district has already cut $7.1 million from its budget and laid off 58 teachers.
On Tuesday, school supporters rallied around the possibility that City Hall’s potential sales tax increase measure could generate additional funding for the school district.
They also hinted it would be in City Hall’s best interest to cooperate with the SMMUSD.
“I think the support of the school community could be very important” in passing a sales tax increase, said Neil Carrey, who chairs a committee that is looking into a new school district parcel tax.
“My fear is that if both bodies put measures on the ballot in November, we’ll both lose, which will hurt everybody,” Laurie Lieberman, a candidate for school board, told the council.
City Hall already pays the district about $7 million each year. But in City Hall’s recent poll, respondents said their greatest concern was a lack of funding for local schools, so tying the measure to the schools could provide a boost in the election.
The concept of a companion measure advising the council to spend a portion of new revenue on the schools was not on the agenda Tuesday night and was not discussed in detail.
The council s expected to make a decision about a possible companion measure when it takes a final vote on the proposed sales tax increase July 13.