Santa Monica City Hall (File photo)

Santa Monica City Council is set to cut the city’s budget by up to 25% as coronavirus decimates the hospitality and retail sectors that generate most of its tax revenue. 

City Council will discuss the budget Tuesday afternoon after meeting two weeks ago to restore $6.4 million in funding to programs that city staff had proposed eliminating. Under the proposed budget, all city departments except the Santa Monica Police Department and Santa Monica Fire Department would see significant funding cuts, which city staff say are needed to avoid a $224 million budget deficit over the next two years.

SMFD would see a 4.4% increase in its budget with a proposed $46.9 million allocation next fiscal year, and the records and elections services department would also receive increased funding to facilitate the November election.

The city would raise SMPD’s budget by 5.6% to $103.8 million, which would make up 30% of the city’s operating discretionary budget. 

Los Angeles Mayor Eric Garcetti responded to calls from activists to defund the department by proposing last week that $150 million of the Los Angeles Police Department budget be reallocated to community programs in black and Latino neighborhoods. Even with the proposed budget cut, the city would still allocate 51% of its discretionary budget to LAPD.

Santa Monica officials have not proposed cutting police spending. Under the city’s proposed budget, SMPD would eliminate just one vacant officer position and cut some jobs in animal control. 

The department decided not to lay off crossing guards stationed around local schools, which was proposed last month as a cost-saving measure. A petition Friends of Sunset Park President Zina Josephs created last week to save the crossing guards has amassed nearly 2,000 signatures.

Josephs noted in the petition that the 40 crossing guards are paid an average of $27,000 annually, while nearly 60 SMPD officers earn more than $300,000, including overtime and benefits.

SMPD’s total payroll would be $98.5 million next fiscal year — an average of more than $230,000 per employee. Next year, the department would employ 228 sworn officers — about 28 per square mile of the city — and 196 full-time staff.

Overall, Santa Monica’s discretionary budget will shrink by 11.5%, which will be enough to keep the general fund in the black for the next five years.

Its total budget of $614 million will be 24% smaller than last year’s and its workforce will be reduced by 18.6% to just over 1,800 full-time equivalent positions.

The city’s community development, community services, library and public works departments would receive a total of $113.6 million, or roughly 36% of the $348.2 million discretionary budget.

The City Council, city manager, city attorney, records and election services, finance department human resources and information services would spend a combined $45.4 million, or 13% of the discretionary budget.

The remaining 11% of the discretionary budget would be non-departmental. 

As Santa Monica’s traditional revenue sources — sales tax, hotel tax and parking fees — suffer amid the pandemic and recession, the city may put a measure on the November ballot to raise the tax property owners pay when selling luxury properties or apply a smaller tax hike to all real estate sales. 

A city-commissioned research firm conducted a survey of Santa Monica voters on potential tax measures and found that more than 60% of voters support raising the real estate sales tax by $3 per $1,000 for sales price for properties worth more than $5 million. The current real estate sales tax on all properties is $3 per $1,000.

The proposed tax measure would generate an additional $3 million annually based on historical averages, but only $1.5 million annually in the short term because of the pandemic and recession, according to the staff report. 

City Council will meet Tuesday at 3 p.m. via teleconference.

madeleine@smdp.com

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