City Council considers hotel bed tax increase
Facing its own economic uncertainties, the City Council on Tuesday decided against committing extra funding to the school district.
The consequences of the council’s inaction could be felt soon, as a large, powerful group of school supporters intend to move forward with its plans to force a measure onto November’s ballot that, if passed, would require City Hall to pay a minimum of $6 million a year to the school district.
School supporters waited anxiously in Council Chambers at City Hall on Tuesday to hear elected officials’ response to their plan. When it was finally discussed around midnight, City Council members agreed they can’t commit to anything more than the $3 million City Hall currently contributes. They said they hoped they could give another $2.25 million in one-time funds, as they’ve done in the past, but given an anticipated $4 million budget shortfall this year, council members are hesitant to commit.
“The $2.25 million doesn’t exist in the real world right now,” said Councilman Mike Feinstein. “We’ve been there for the school district because we have managed our money well and we have gone over and above that stability unlike any other city has done, with the exception of Beverly Hills.”
The goal of school supporters is to provide a stable and predictable source of funding to the district. And while the City Council agrees education is a top priority in Santa Monica, it’s too soon to predict whether City Hall will have enough cash to hand over without making serious cuts to staff and community services.
455,“It’s not that easy to find more money,” said Councilwoman Pam O’Connor, adding she predicted last year that the council’s extra “one-time contribution” of $2.25 million would become expected every year. “It’s digging a hole and that’s what the state is doing.”
Find the money
Elected officials said it would be irresponsible to fund the district indefinitely without a new revenue source, which could possibly be an increase to the local hotel bed tax — a 12-percent assessment on room rates throughout Santa Monica. The city has strategically kept its bed tax lower than that of Los Angeles (14 percent) and other surrounding cities as an incentive for tourists to come here.
The City Council is now considering putting a measure on November’s ballot asking voters to increase the tax, but by how much remains unclear.
While city staff researches the bed tax possibilities, “Community for Excellent Public Schools,” a grassroots organization with several hundred members, is moving forward with its own plans to save what they believe is a financially faltering school district.
It’s the state’s fault
Santa Monica-Malibu Unified School District John Deasy told the council that he expects the district will have to close a $3.5 million budget shortfall for the next school year. The shortfall is caused by Gov. Arnold Schwarzenegger’s proposed state budget, as well as the district’s own increased costs such as a growing student population and salary increases for teachers and staff.
Deasy’s analysis indicates that the district’s projected shortfall is calculated with City Hall’s $5.25 million contribution and $385,000 from Malibu remaining intact. Should either city lower their contributions to the schools next year, the projected shortfall and ensuing cuts facing SMMUSD would increase accordingly.
“Every year it’s the same thing, school budgets get slashed, expenses rise, programs are cut and children suffer,” said PTA Council President Maria Rodriguez. “Our district has been smart with its money so far — and determined not to let any child slip through the cracks — but we just can’t absorb more cuts. These cuts and the next round and the rounds after that will take years to be felt by our city. By the time residents start wondering why drop-out rates and youth crime rates are on the rise, or why property values are starting to erode, it will probably be too late to fix education.
“Every year it’s the same thing, school budgets get slashed, expenses rise, programs are cut and children suffer.” — — MARIA RODRIGUEZ SMMUSD PTA Council President
“The time to do that is now, and the only option we see is a partnership with the cities we serve.”
Going local
Earlier this month, CEPS filed a proposal in City Hall to amend the Santa Monica charter. The amendment would pump a dedicated portion of City Hall’s general fund into the district indefinitely, creating a stable and predictable funding source to ensure excellent education in Santa Monica and Malibu.
School supporters would rather see the City Council come up with a long-term plan that will provide the school district with an ongoing source of funding every year. It was an ultimatum of sorts — either establish a permanent funding source for the school district, or let voters decide how taxpayers’ money should be spent.
But after CEPS members listened to the council for more than five hours, keeping themselves awake with chocolate and pizza, it became clear shortly after midnight that the group would have to press on with the ballot measure, despite their pleas to the council.
Rick Gates, former PTA president, told the council that, despite California being one of the largest economies in the world, it ranks at the bottom in literacy and the state government continues to ignore the problem.
“I don’t envy you. There is always a big pull between the short-term and the big picture,” Gates said. “I spent 10 years trying to get the state to move on this issue. The needs of our classrooms are only going to get met locally.”
The City Council feels like the group is trying to force government’s hand. Feinstein called CEPS’ initiative a “bad budget amendment and it undermines city finances.”
“It’s something for nothing,” he said. “It’s an unrealistic mandate.”
Councilman Bob Holbrook asked City Manager Susan McCarthy if giving an extra $2.5 million this year would create a high anxiety level for staff to balance City Hall’s budget.
“There is a fair level of apprehension already,” she replied. “But if you say go find it, we’ll go find it.”
That would probably mean cutting staff and service levels to the community, a notion that worries Lauralee Asch, president of a coalition of nine employee associations that represents all non-sworn city employees.
“Members of the coalition support excellent public schools, but we also support excellent city services and the preservation of community health and safety,” she told the council. “School supporters should be working with the council and staff to establish new revenues that can be used to educate our children, not proposing to eviscerate city services in order to funnel more money to the school district.”
Originally published in the Santa Monica Daily Press print edition on January 29, 2004. Read the original PDF.