Sales tax revenues increased year on year for the first quarter of 2015, but the pace of growth at the county and regional level exceeded local levels.
Receipts for the quarter were more than 3 percent higher than the same quarter last year but accounting for payment aberrations, actual sales grew by 1.2 percent between January and March of 2015 (the most recent dates available). Taxable sales rose 3 percent in Los Angeles County and 3.2 percent in the Southern California region.
Gigi Decavalles-Hughes, Santa Monica’s Director of Finance, said sales tax figures fluctuate based on many factors but over time, Santa Monica is on par with nearby agencies.
“It’s not necessarily meaningful to make judgments based on a single quarter’s results,” she said. “Revenues in a particular quarter might be affected by many things such as one-time adjustments to revenues, seasonality, weather, the City’s business mix, businesses moving in and out of the City, and various other factors. While revenues in individual quarters may either exceed or trail regional results, projections are that City revenues will trend relatively close to regional revenues over the next few years.”
Despite the gap in growth, sales per capita in Santa Monica remains high at more than three times the county or state level.
When broken out by industry, most industries saw growth. Receipts from fast-casual restaurants, such as Chipotle, grew by 25.3 percent to $223,800, home furnishing receipts increased by 22.5 percent to $203,700 and specialty stores grew by 21.2 percent to $292,200. Casual dining, fine dining and quick-service restaurants all experienced double digit growth.
According to HdL Companies, the organization hired to conduct the analysis, restaurant figures were boosted by late arriving receipts from the prior sales period but new restaurant openings did add to actual sales.
“New retailer openings also added to general consumer totals but temporary adjustments inflated group gains,” reads the report. “The food and drugs increase was consistent with regional trends.”
Service stations saw the largest decline in sales, dropping 28.1 percent to $230,900. Women’s apparel dropped 14.1 percent to $172,300. Plumbing/electrical supplies dropped by 6 percent to $164,300.
HdL said lower prices at the pump caused to the fuel and service station drop. A misallocated payment received a year ago caused the business and industry decline. Adjustments for business closeouts cut building and construction receipts.
Santa Monica’s most profitable industry, new vehicle sales, saw a marginal decline of 0.4 percent to $1,238,800.
HdL said the auto and transportation group actually showed ongoing interest by consumers in buying and leasing new vehicles however a one-time tax payment last year impacted their growth figures.
Data from department stores remains confidential in Santa Monica due to the composition of the business community.
“Sales tax information on individual businesses is confidential per the State Revenue and Taxation Code,” said Decavalles-Hughes. “In the case of department stores, the number of businesses included in the department store category in Santa Monica is small enough whereby the entire category is deemed confidential.”
Gross receipts for all accounts and allocations totaled $8,581,500 for the first quarter.
Consumer goods accounted for 29 percent of revenue, auto/transportation was 23 percent, restaurants were 22 percent, pools were 11 percent, business/industry spending was 5 percent, food/drugs were 4 percent and miscellaneous industries made up 6 percent.
Sales tax is the largest source of revenue for the General Fund.
“Sales taxes are deposited into the City’s General Fund and used for a variety of general services including police, fire, paramedic and emergency services, school and afterschool programs, library programs, programs for the homeless, parks and recreation programs, environmental protection and other general fund activities,” said Decavalles-Hughes.
The top 25 sales tax generators, in alphabetical order, are:Apple, Audi Leasing/Bentley Leasing, Bloomingdale’s, Classic Car Auction, Daimler Trust, Fairmont Miramar Hotel, Ferguson Enterprises, Hornburg Jaguar/Land Rover, Intervision Systems Technolg, Key Code Media, Lexus Santa Monica, Nordstrom, Santa Monica Audi, Santa Monica BMW, Santa Monica Ford/Lincoln, Santa Monica Honda,Shutters on the Beach, Simonson Mercedes Benz, Snyder Diamond, Tesla Motors, Toyota Lease Trust, Toyota Scion Santa Monica, Urban Outfitters, Volkswagen SantaMonica and Vons.