City leaders agreed on July 17 to authorize a Nov. 6 sales tax ballot initiative in an effort to maintain community service levels and generate profits for Culver City’s coffers.
Faced with a projected $8 million deficit, the city council proposed placing a half-cent tax hike over 10 years before the voters in the fall.
City Manager John Nachbar said municipalities often look to a variety of revenue generating sources during difficult economic times. “It is common for cities to increase revenues during a fiscal crisis, usually after major expenditure reductions have been accomplished, like we have done,” Nachbar told the News after the meeting.
Nearly all of the contenders for city council in April talked about the need to bring in additional revenue to the city’s coffers.
Mayor Andrew Weissman, in an interview for his candidate profile with the News, talked about the importance of involving Culver City’s residents in addressing the possibility of a revenue enhancement.
“We’re no longer realistically in a position to be all things to all people all the time,” he said candidly. “At some point in time, we’re going to have to have that honest dialogue with the community, and the community is going to tell us what it is that they want us to do, and it’s going to involve the all important revenue word.”
Chief Financial Officer Jeff Muir said the proposition if approved, is expected to bring approximately $8 million.
Councilman Jim Clarke said while the council still has the responsibility of seeking approaches to sources of new revenue, the ballot proposition now turns the discussion into a joint venture between the city’s elected leaders and the public over whether certain programs will be saved or certain services may be cut.
Cities such as Santa Monica and Inglewood have also sought half-cent sales tax hikes to offset budget problems.
Clarke thinks the proposition has a good chance of passing.
“I think there will be good acceptance,” the councilman said.
There is empirical data that indicates that Clarke could be right.
A survey conducted by the consulting group Fairbanks, Malsin, Maulin, Metz & Associates suggested that a plurality of Culver City residents realize that further budget cuts could have a deleterious effect on the city and recognize that additional funds are needed.
But while the survey also indicated that one in five residents believe the city has a “great” need, which the consultants say suggests that many are not aware of Culver City’s current financial constraints.
For that reason, Clarke recognizes that city officials will need to sell the ballot initiative to the public in campaign-style fashion.
“We will have an active campaign, going door-to-door, much like I did in my own campaign,” pledged Clarke, who works for Mayor Antonio Villaraigosa and was elected to the Culver City Council in April.
Nachbar said the type of levy that Culver City officials will be asking their voters to pass is not an uncommon request.
“Sales tax has been the most common approach in my experience, regardless of which state I’ve worked in,” he stated. “It is usually the one most palatable to voters.”
Cities like San Bernardino, Stockton and Mammoth Lakes have recently opted for bankruptcy after declaring fiscal emergencies. Clarke acknowledged that Culver City also declared a fiscal emergency, but not for the same reasons as the aforementioned cities.
“In order to put (the sales tax measure) on the ballot, it was necessary to take that technical step,” he explained, adding that the city is not going bankrupt.
Clarke noted that the city had not fully funded its infrastructure needs, a position that many find municipalities themselves in during the global economic downturn.
“One way to do that might be through an infrastructure assessment district,” the councilman said.
Special districts were also discussed during the city council campaign.
Approximately 3,3000 of these entities exist throughout California, according to the local government committee. They typically generate revenue through tax benefit assessments and service charges. They are considered limited purpose governments and can only provide the services that are allowed by state law and that are supported by their residents.
Clarke said the repercussions were stark in the sales tax initiative is not approved.
“The consequences would be very dire,” he said.
