“In this world, nothing is certain but death and taxes.”
— Benjamin Franklin
Last Tuesday, the City Council approved a ballot measure that will permanently add another half percent to the current 9.75 percent sales tax on taxable items purchased, delivered or registered in Santa Monica — if “OK’d” by more than 50 percent of voters in November. A companion, non-binding advisory ballot measure will ask voters whether the revenues generated should be shared with the Santa Monica-Malibu Unified School District.
School supporters have wholeheartedly endorsed the new tax measure because they visualize splitting up to half the additional net $12 million in annual revenue. City Hall’s financial staff estimates the half-cent increase could also result in a 10 percent reduction in the city’s taxable sales or a $268 million loss. Restaurants, consumer goods and drug categories will be hardest hit. Jobs will be lost and businesses will close.
City Hall paid the district $7.644 million last year in a Facility Use Agreement, a net $1.5 million for programs and services at district school sites and another $27 million for school and community-based youth programs, according to a Feb. 6, 2010 council information item.
Suggestions that City Hall is in dire need of money and may have to slash essential services including police and fire are nonsense because residents won’t tolerate it.
This has all the earmarks of a back-room deal worked out by Santa Monicans for Renters’ Rights leaders, school and City Hall honchos to float another tax measure that would add more money to city coffers and generate $6 million annually for the school district — coincidentally, nearly the same amount as the district’s failed parcel tax measure would have raised
Nimish Patel, a member of the school district’s financial oversight committee and a likely school board candidate, commented in a letter to this newspaper (Letters to the editor, July 13, page 4) and again before City Council, that “25 percent of the tax will be paid by nonresidents and tourists.” As if residents paying three-quarters is a good deal. He postulated that the more than $13 million the half-cent levy will annually raise will “be used to minimize cuts to critical city services and to fund our public schools.”
Patel mentioned City Hall’s polling showed a vast majority of the community support this tax. I was interviewed and never experienced a more leading poll. It was strictly designed to “hard sell’ a tax increase not to gather honest data.
Controlling spending is obviously something that school administrators, school cheerleaders and city politicians want to avoid at all costs. They’d rather continually raises taxes. And, because the city if Malibu is not increasing its sales tax, we’ll also wind up subsidizing Malibu schools even more.
However, Patel is correct in advocating for independent revenue streams including naming rights for school facilities (Can you imagine Yahoo Barnum Hall or Samo-Fox Marching Band?).
During Tuesday’s council meeting, Mayor Bobby Shriver said, “The city is rich -- in the worst economy in the history of everybody in this room” and said that concerns “the city is in some sort of financial extremis is just not borne out by fact” — a statement school cheerleaders and Councilwoman Gleam Davis disagreed with even through Shriver is “dead on the money,” so to speak.
In response, Davis lamented a “self-imposed” 1.5 percent budget reduction by social service providers including meals for seniors. She continued, “With the sales and use tax there is an element of discretion and if it proves to be a burden to someone, they can reduce their consumption.” In other words, go without? Or, shop out of town?
“A parcel tax is not a consumption tax. Unless you live in your house and own your property, the only way to get out from under the parcel tax is to sell your house and move out of Santa Monica,” she intoned. Oh, my. Let them eat cake?
Attorney Neil Carrey, who heads the school tax and bond feasibility committee, told council the sales tax proposal “would make more sense” and be “easier to pass than a parcel tax” referring to the two-thirds vote required to approve a parcel tax measure wherein a sales tax increase only requires majority approval. Note: “Easier to pass!”
However, there’s nothing in either ballot measure that guarantees one thin dime will go to the schools. Although this present council will probably share the wealth, future City Councils could turn off the tap at any time for any reason.
This sales tax proposal is another in a long series of regressive taxes promulgated by the municipal “plutocracy." There is no compelling need to increase taxes and give even more money to City Hall and a school district that believes taxing residents out of their homes and jobs is the only option.
Bill can be reached at mr.bilbau@gmail.com.
