CITY HALL — With a projected budget gap as high as $53 million by 2015, City Hall officials are considering whether to ask residents to approve a half cent sales tax increase or a property transfer tax hike this November to boost revenue and avoid cuts to services.
Santa Monica’s City Council would have to decide whether to place one or both of the possible “revenue enhancements” on the Nov. 2 ballot before Aug. 6, the deadline for filing ballot initiatives with Los Angeles County.
If approved by voters, the sales tax increase could boost the rate in Santa Monica from 9.75 percent to 10.25 percent, one of the highest rates in the state. A statewide 1 percent sales tax increase the California legislature approved as a deficit reduction measure last year, though, is set to expire next July.
The property transfer tax increase being considered would add an additional $1.50 tax per $1,000 spent on property purchases, said Finance Director Carol Swindel. The potential increase, she said, would raise Santa Monica’s rate to $4.50 per $1,000, equal to the property transfer tax rates charged in Los Angeles and Culver City.
To take effect, the tax increases would have to be approved by a simple majority of Santa Monica voters, Swindel said.
Since Sunday, City Hall has been polling registered voters to gauge support for the ideas. Results of the polling, which is being conducted by the Santa Monica firm Fairbank Maslin Maullin Metz & Associates, are expected to be presented to the City Council before the Aug. 6 deadline.
“The question is ‘Would the community prefer to have the certainty of a local revenue stream to support local services, or do we need to look at other measures to resolve our budget shortfall over the long-term?” Swindel said.
The poll cost City Hall $27,195 and aims to gather the opinions of 500 registered voters. It was initiated at City Manager Rod Gould’s direction to provide the City Council with information about options to improve the budget outlook.
No estimate of how much City Hall could expect to raise from either of the potential tax increases was provided by deadline late Thursday.
Councilman Richard Bloom said the poll was a common sense step as the city considers how to shore up its long-term finances.
“Given all of the uncertainty at the state and the fact that we are facing a very real structural deficit, it is important that we take a close look at all the options we have with a view toward maintaining the high level of service and amenities that Santa Monicans have come to expect,” he said.
“We have choices to make as a community, and gathering information on what might be supported by voters is a worthwhile first step,” added Councilman Kevin McKeown.
Mayor Bobby Shriver, though, said he could not support asking the voters to approve a new tax in November, regardless of what the poll results show.
“Because we have not managed the cost side of the budget well enough, I don’t think it’s the right time to ask the people for more tax revenue,” he said.
nickt@www.smdp.com
