Culver City Half Cent Sales Tax Increase to Appear on November Ballot

The City Council unanimously agreed Monday night to place a half-cent sales tax increase – with a 10-year sunset clause – on the November ballot.

The move comes following five in-depth community meetings where City Staff laid out an overview of the City’s finances, revealing that the only way to combat the City’s growing deficit was to either raise taxes or cut services.

During the staff presentations, CFO Jeff Muir noted that the five year forecast for the General Fund would result in a loss of 7 to 8 million dollars per year and the City’s emergency reserves would be completed depleted by 2017 if the status quo is maintained.

Muir said to maintain the City’s current level of services, increasing revenue was the best option and that a sales tax would ensure that those monies would be spent in Culver City. Muir cited both Santa Monica and Inglewood as having successfully implemented a half-cent local sales tax increase.

In agreeing to place the sales tax increase on the ballot, the City had to vote unanimously to declare the existence of a fiscal emergency in Culver City. That resolution and the vote were crucial because the item has to be approved by the end of July in order to meet the County deadlines to appear on the November ballot.

If residents approve the measure in November, it will not become effective until April 2013 and the City will not receives any funds until July 2013.

Following the Council’s vote, Chamber of Commerce member Kevin Lachoff told Patch, “This proposed tax will be a vital source of funds for the City in our post-Redevelopment Agency environment. I like that it has a 10 year life – we can re-evaluate our needs a decade from now and vote again if we find we still need the additional source of revenue.  From attending several of the finance / budget meetings, we need to address our City’s deficit. If the measure doesn't pass, we will all feel the effects of the cuts and lower levels of service (city services, parks & recreation, likely police and fire / safety, etc.). There will be a number of similar measures on the November ballot - I hope Culver City bands together to support our own need for this tax.

Chamber of Commerce President Steve Rose and Chairman Goran Eriksson had hoped for a five-year sunset clause, and had urging the City to follow its suggestion.

 However, several council members felt 10 years was a safer bet. Councilmember Meghan Sahli-Wells said she didn’t feel five years was long enough for the City to get back on its feet financially. 

The Council also agreed to place an item on an upcoming agenda to discuss the establishment of a financial oversight committee for the funds. Former City Treasurer Crystal Alexander floated the idea earlier in the evening during public comment.

Click on the PDF to the right of this article to see the City Staff Finances report in its entirety.

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