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# Sales tax revenue down but news not all bad
- URL: https://www.smdp.com/sales-tax-revenue-down-but-news-not-all-bad/
- Published: 2003-04-26T15:00:00.000Z
- Updated: 2026-10-23T02:05:59.000Z
- Author: John Wood
- Tags: Business, Promenade, #archive-import

Overall, 2002 sales tax revenue for Santa Monica was less than the year before, though it’s not as bad as it sounds.

Consumers in Santa Monica spent more than $2.2 billion last year. That translates to $22 million — or one percent of total sales — in sales tax revenue for the cash-strapped city, said Mark Richter, head of the city’s department of resource management.

While sales tax revenue in the city as a whole dropped 2 percent compared with 2001, bright spots did emerge.

Sales tax revenue from stores on the Third Street Promenade jumped 2.3 percent — and a whopping 17.5 percent in the fourth quarter alone.

The jump clearly indicated a bounce back in retail sales and tourism, Richter said.

The figures showed that Santa Monica is doing slightly better than L.A. County at large, which was down about 3 percent overall, Richter said.

Some other areas of the city also fought through the recession to post sales tax gains in 2002.

Merchants along Lincoln Boulevard posted 4.3 percent more sales tax revenue for the year and 7.8 percent more in the fourth quarter. The abundance of gas stations on the street and the rising cost of gas and may have affected those numbers, Richter said.

Shops along Montana Avenue, where Richter said there are virtually no vacancies, reported a 3.6 percent gain in sales tax revenue on the year and a 6.2 percent jump in the fourth quarter.

In general, Richter said restaurants and service stations produced more in sales tax in 2002 than in 2001, while department store and auto sales were down.

Richter said areas of town that target affluent customers seemed to have improved despite the recession.

“It’s an upscale clientele and that’s what sells,” he said. “That end of the market is virtually recession-proof.”

City officials said the good sales tax news won’t change the status of this year’s $12 million budget deficit. Budget decisions will still be approached conservatively, they said.

“It’s too early to celebrate,” said City Manager Susan McCarthy. “A fortuitous uptick in Promenade sales during the holiday season does not mean that everything is rosy on the sales tax front.”

Robert York, a consultant for the Bayside Corporation, which manages downtown with the city, said to expect a great deal of turnover in downtown merchants during the next few months.

While some are leaving, York said other businesses are interested in vacant spots. Overall, occupancy rates should remain steady.

“We’re holding our own,” he said, adding that it will be several months before any major gains are made.

The demise of dot-coms at the east end of Colorado Avenue contributed to a 14 percent drop in 2002 sales tax from that area. Santa Monica Place mall posted an 11 percent drop in sales tax revenue.

Auto sales along Santa Monica Boulevard also fell in 2002, dropping 1.3 percent.

While revenue from Ocean Avenue, the Santa Monica Pier and hotels downtown dropped slightly from 2001, fourth-quarter revenues were up 16.1 percent.

Los Angeles County, which receives sales tax from the unincorporated areas of the county, expects to post a 3.8 percent gain from the 2001-2002 fiscal year to 2002-2003, said John Redmond, principal analyst for the county’s chief administrative office.

*Originally published in the Santa Monica Daily Press print edition on April 26, 2003.* [Read the original PDF.](https://s3.us-east-1.amazonaws.com/smdp%5Fbackissues/042603.pdf?ref=smdp.com)