Santa Monica voters will have a few options when it comes to taxing high-end real estate deals on the November 2022 ballot.
The first option will charge $57 per $1,000 of value for real estate deals in town, on properties worth $8 million or more. The measure would continue in perpetuity until such time as a future city council decides to remove it.
The second option will charge $25 per $1,000 of value, also for real estate deals valued at or above $8 million. This tax measure would expire after 10 years, with an optional extension of five additional years if a supermajority of council agrees on the extension during year eight.
Each of these options is a “third tier” atop already existent document transfer taxes of $3 per $1,000 of value on properties valued under $5 million and $6 per $1,000 of value on properties valued at $5 million and above.
And there’s always the third option: to vote “no” on both and maintain the status quo.
The two competing measures have stirred up frustration on city council, which voted to approve both for the midterm ballot despite disagreements.
With the first option, which was placed on the ballot via an initiative petition signed by at least 6,930 residents, parameters of how to spend the revenue are firmly established: money collected is allocated toward “homelessness prevention, affordable housing, and schools.” Money allocated toward schools would remain in Santa Monica in the event the current school district is cleaved.
The second option, penned by city council members, is less set in stone. Although it would come with an Advisory Measure allowing residents to weigh in on how to spend the revenue, all funds collected would go to the City’s general fund and not be locked into specific funds or programs.
Despite this, council members have spent hours over the past several weeks determining how they would like to see the money from this proposed measure spent.
The final list of priorities for the tax measure came down to:
“Allow for at least 30% of the funds to be allocated for housing assistance”
“Services to address homelessness and behavioral health”
“Public safety and emergency response teams to address safety concerns on City streets and in parks”
“Reopen and staff Santa Monica public libraries”
“Provide after-school programs for public school children”
“Crossing guards near public schools”
Most councilmembers expressed confidence that funds allocated toward specific interests would actually go toward them, despite the example of school-directed tax revenue being redirected toward the city’s general fund during the COVID-19 crisis.
“You can always say, ‘Well, an Advisory Measure is just an Advisory Measure,’ but I think, absent that one issue and happened because of COVID, this city has honored the wishes, if you will, of the electorate and continued to spend the money as it has advised, if you will, in connection with these Advisory Measures,” Councilmember Gleam Davis said.
Santa Monica Mayor Sue Himmelrich, the sole dissenting vote against the latter measure and one of the authors of option one, the initiative petition — formally called The Funding for Homelessness Prevention, Affordable Housing, and Schools measure — called the second option a “slush fund for the city council to hang ornaments on its special little city council tree.”
Both measures will appear on the Nov. 8, 2022, ballot, alongside a measure to establish a business license tax for cannabis-related businesses and another to increase transient occupancy tax — hotel tax — citywide.
emily@smdp.com
