DOWNTOWN — With a school district activist and a Chamber of Commerce leader heading the effort to pass Measure Y, the ballot initiative that would increase the local sales tax by a half percent, backers are portraying the tax hike as a needed revenue booster that has broad based appeal.
For school supporters and those concerned about protecting City Hall’s robust array of services as costs increase, the benefits of the measure are clear.
The tax hike would generate roughly an additional $12 million per year, $6 million of which could go to the Santa Monica-Malibu Unified School District if voters approve an “advisory measure” that would urge City Hall leaders to commit half of the new funding to the district. The measure is not legally binding, but if approved the council is expected to dedicate half of the tax measure to schools..
The education angle figures prominently with both co-chairs of the measure’s campaign committee, Shari Davis, president of the Santa Monica-Malibu Council of PTAs, and Tom Larmore, a chamber past president who has sited the benefit to schools as the primary reason for backing the tax.
“I think that it’s just absolutely critical for our schools to be able to establish a reliable source of funding,” he said in an interview.
It’s still unclear, though, how the majority in the business community view the idea of raising the sales tax as stores continue to struggle amidst a pullback in consumer spending.
Hoping to educate its members and other voters, the chamber is hosting an “informational meeting” at which Santa Monica City Manager Rod Gould will discuss Measure Y on Sept. 20 at 5 p.m. at the Martin Luther King Jr. Auditorium. Its board of directors will consider whether to back the measure Sept. 23, said Laurel Rosen, the organization’s executive director.
The chamber endorsed two recent ballot measures aimed at raising money for the schools, school bond Measure BB, which passed in 2006, and Measure A, a proposed parcel tax for the district that failed to win the needed two-thirds support in a special election earlier this year.
The proposed sales tax hike, though, has already stirred spirited discussion in the business community.
“We really recognize in this economic climate this is a challenge for businesses on one level,” Rosen said. “We also understand that many people are hoping that there will be good that will come out of this for the schools.”
While Larmore, an attorney, is backing the measure, other business people said employers are sharply divided on the tax hike.
Pat Barrett, president of Barrett Appliances and another past president of the chamber, said the tax increase would hurt retailers who deal in big ticket items the most because customers could easily choose to shop outside the city limits for major purchases to avoid the extra charge.
The tax increase, if approved, would not apply to those who make major purchases and have those items delivered to a home or business outside Santa Monica. The same goes for those who purchase cars and register them in another city.
“We have people comment every day, even now as it is, about how high sales taxes are in general,” he said.
He said Larmore’s support for the tax doesn’t reflect retailers’ attitudes. Attorneys and other professionals, he noted, wouldn’t be forced to charge their clients more if the tax increase passes.
“If they think it’s such a good idea, why don’t they push for a 10 percent tax on their professional fees?” Barrett said.
For his part, Larmore said he doesn’t expect the tax to be a drag on local retail businesses.
“I don’t think it’ll be bad for anybody’s business. The amount of additional tax that anyone would have to pay is so small that I don’t think anyone will even notice.”
He said the higher tax rate — Santa Monica’s sales tax would become 10.25 percent if Measure Y passes — could even help retailers.
“The schools have a tremendous amount of support and I think that’s going to translate into people being more likely to spend money here than elsewhere,” he said.
To Barrett, that’s a stretch.
“To raise [the sales tax] and not think it’s going to have an impact is an absolute pipe dream,” he said.
While the chamber isn’t guaranteed to take a position on Measure Y, the debate within the organization is likely to get heated.
“We’ll have an interesting discussion I’m sure,” Larmore said.