There are nine local ballot measures before voters in November. Two-thirds are new taxes in some fashion, two strengthen rent control protections for tenants and one is an administrative item. In looking at all nine, we think some are worthy of support (including a couple of new taxes), a couple are outright rejections and, for the rest, personal politics is really your guide.
CS (Transient Occupancy Tax) — Yes
Transient Occupancy Tax is paid by visitors to hotels and services like Airbnb; it’s not a fee paid by residents. While Santa Monica’s seems high at 14%, it’s on par with our neighbors and this proposal would increase that to 15% for hotels and 17% for homeshares. The measure is estimated to create about $4 million annually.
Aside from generic anti-tax sentiments, there’s no organized opposition to this measure because it has very little, if any, downside to residents.
The measure claims it’s going to fund public safety and infrastructure but those are just words. If passed, Council will establish an advisory committee that will provide non-binding recommendations on the use of the additional revenue. Non-binding recommendations are a waste of time because the money will be spent wherever the current Council thinks is needed so this provision isn’t great but you should still vote YES on this measure.
GS ($56 per $1,000 Transfer Tax) — No
DT/DTS ($25 per $1,000 Transfer Tax) — No
Both GS and DT/DTS target the same revenue stream, adding a fee to the taxes paid when a property sale occurs.
GS establishes a third tier transfer tax rate of $56 per $1,000 of value for property transfers of $8,000,000 or more which amounts to over a nine-fold increase from today. Its primary purpose is to build affordable housing but to do so it will rob city coffers long term and result in reduced funding for public safety, libraries, infrastructure and other key city functions due to the reduced carrying value on property tax roles.
DT is more modest and adds an additional incremental tax of $25 per $1,000 of the value in excess of $8 million, excepting transfers: per State law, involving tax-exempt charitable organizations, and certain ground leases; providing an estimated $12-25 million annually. It is earmarked for certain priorities but it really is to fund general expenses. DT would sunset in 10 years and has additional protections to allow for new construction/renovation.
These are two very different taxes. Seemingly they both start at the $8 million property value level, but GS is not progressive, it is retroactive, i.e. it would apply to the entire value of the property not just the amount above $8 million. This creates an absurd situation where selling a property for $1 more could trigger $400,000, or 9.3 times additional tax.
Additionally, GS has no sunset clause. All measures have unintended consequences but with this one we are stuck with them forever. Only a new ballot measure could modify GS.
While GS is truly bad for Santa Monica long term, neither measure is a good idea. Transfer taxes are deducted from the value of the home when establishing property taxes so these measures aren’t so much an increase in tax revenues as they are stealing from Peter to pay Paul because over time the revenue from the transfer taxes will be offset by losses in the property tax revenues.
In summary, DT is the far lesser of two evils. You can nickel and dime the two as to which details are better or worse but you should save yourself the time and just vote NO on both.
PB (Personnel Board) — Yes
This is another measure with no opposition because it doesn’t have any negative consequences. The measure expands the number of people who can serve on the Personnel Board to include city residents and county residents who have an economic interest in the city. It also reduces the term from five to four years. These changes align the Personnel Board with the City’s other boards and commissions. It’s an easy YES.
HMP (Cannabis Tax) — Yes
Santa Monica’s cannabis regulations are woefully behind the times. The City has long delayed any kind of dispensary in the City and to this day lacks any local stores (two medical dispensaries have filed paperwork and will open soon). Measure HMP establishes a 10% tax on cannabis sales in the City including the not-yet-allowed non-medical usages and unless the City plans to stay stuck in a scene from Reefer Madness, we should absolutely have the regulatory infrastructure in place to tax these products. YES.
RC (3% adjustment cap) — Yes/No
EM (adjustment prohibition in an emergency) — Yes/No
Measure RC reduces the maximum annual rent increase from 6% to 3% for rent controlled units. Measure EM allows the Rent Control Board to suspend or modify the maximum increase during a declared state of emergency.
Measures RC and EM have the same logic. If you believe in rent control then you should vote Yes on both of these measures. If you don’t, then it’s a No. The arguments for and against each are the same as the arguments for and against the concept of rent control.
Measure RC reinforces everything that people either hate or love about rent control as it limits housing costs for renters while shifting the costs associated with inflation to property owners. Landlords hate the limitations on their ability to raise rents and tenants love the security of artificially low rents.
Measure EM will allow officials to reduce or eliminate rent increases when there’s an emergency. That will make life easier for renters but landlords have the same costs, if not more, during an emergency.
There are some truly insane arguments being thrown out about these issues but voters should ignore all of them and just focus on the core question: Do you support the concept of rent control in Santa Monica?
SMC (SMC Bond) — Yes
Measure SMC is a $375 million bond to fund continued projects at the campus including housing for low income students and modernization of some old and temporary buildings on campus. Measure SMC joins four other community college bonds in the Los Angeles area this election cycle, all attempting to fill the existing gap between what has become a caste system in the United States, those that attended a four-year college and those that haven’t. According to the Social Security Administration, a college graduate earns $630-$1 million more than a non-college grad over a lifetime.
The SMC bond building improvements will not increase density on campus. Education is shifting to a hybrid of online/in-person model, so there will be less classroom space in the new buildings and more facilities to support online recording and instruction. The buildings that are planned for improvement have been hosting expiring trades like auto repair. The building was built to the demographics of an era where only men learned these types of trades resulting in things like 8/1 men/women bathrooms, and need updating.
Unlike all of the affordable housing we are building that must be offered to all LA County residents, the student housing SMC would build at the Bundy campus can be prioritized to Santa Monicans.
It’s probably the hardest and easiest decision to make depending on your personal politics. Higher education is one of the most valuable tools to raise people out of poverty and trying to restrict access to that education is among the most elitist actions possible. However, SMC is not the only community college in existence and there’s no moral obligation for residents to perpetually subsidize its growth for students from outside of Santa Monica.
Last time an education bond was put to the community we said we thought the City had reached a saturation point for these kinds of measures and we were resoundingly wrong. You can vote for this measure without guilt if you’re willing to shoulder the costs because SMC does provide excellent programs for students and services for the wider community. You can also vote against it because we’re in a world of skyrocketing inflation and there comes a point where residents just don’t have the disposable income to support continued institutional support.
We think SMC provides a great service to the community. In the last SMC poll of residents, 56% of households that completed the survey said that someone in their household had used the academic services of the college in their lifetime. The updates planned for this bond are not vanity projects and are in line with larger goals of equity and inclusion. For this reason, we think it’s a YES on SMC.
