Local sales tax gains still lag behind state, county
CITY HALL — Santa Monica consumers appear to be living high off the hog — buying new clothes and cars, as well as increasingly patronizing local restaurants and bars.
That’s one reading of the latest sales tax figures, which show a substantial gain in sales tax revenue in the sectors of retail, restaurants and liquor.
Overall, the sales tax revenue appears to be continuing on an upswing, posting a 5.2-percent gain in the second quarter of 2004 over the same period in 2003, officials announced Tuesday.
The figures may be misleading, however. Many of the changes were due to some businesses posting their sales tax figures late and, therefore, officials place the overall sales tax “adjusted” growth at 2.8 percent. That compares to a statewide sales tax increase of 7.7 percent and a countywide increase of 5 percent.
Almost all business types posted a gain, except auto leases, which dropped by 34 percent, mostly due to a one-time adjustment in 2003, according to city officials. Revenue for new vehicle sales went up by 6.6 percent, while revenue from service stations increased 23.1 percent, due largely to higher fuel prices.
Key regions of the city also improved. Santa Monica Boulevard, Wilshire Boulevard, Ocean Park Boulevard and the Third Street Promenade all posted hefty sales tax revenue gains. After adjustments, downtown saw a 22.4-percent gain, while the Promenade improved by 19.6 percent.
City Hall is banking on a 3.5-percent increase in sales tax revenue for the fiscal year, which began after the close of the second quarter, in July. City Finance Director Steve Stark said he remains optimistic the city will meet those projections, but added Sacramento can delay distributing some local sales tax revenues.
“The 2.8-percent adjusted sales tax growth for the quarter is somewhat lower than the rates of the last several quarters,” Stark said. “The overall strength of the economic recovery continues to be uncertain due to current economic and political events.”
Originally published in the Santa Monica Daily Press print edition on October 13, 2004. Read the original PDF.