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# Santa Monica gives chamber a ‘heads up’ on possible taxes, fees
- URL: https://www.smdp.com/santa-monica-gives-chamber-a-heads-up-on-possible-taxes-fees/
- Published: 2002-12-03T16:00:00.000Z
- Updated: 2026-10-23T01:02:40.000Z
- Author: Carolyn Sackariason
- Tags: Business, Santa Monica, #archive-import

*Officials hear good, bad and ugly of budget woes*

Cutting costs aren’t the only way the city plans to crawl out of its multi-million budget deficit — raising fees and taxes are also on the minds of elected officials.

Santa Monica City Manager Susan McCarthy met with chamber of commerce officials Monday to give them what she called a “heads up” on possible revenue generators for the city, including raising parking meter fees, parking ticket fines, the bed tax on hotels and business license fees.

And while the increases are only ideas at this point, they could bring in millions of dollars for the city’s near-empty coffers. The city faces an $8 million shortfall this year and a possible $15 million deficit next year.

In order to close the gap between expenditures and revenues, the city has embarked on a five-year budget projection process that doesn’t look too promising if the current economy falters any-more than it already has.

The city is trying to remain flexible in its financial position as more acts of terrorism and a looming war with Iraq are on the minds of consumers and business owners, city officials said.

McCarthy spent the first part of her discussion with chamber officials explaining the dire situation the city is in and what cuts have been made from the budget already. Between $5 million to $8 million in services has been slashed and more than $20 million in capital improvements have been put off to deal with the current economic problems. McCarthy also said the city is examining each department to see how it can run more efficiently and cost effectively.

But to address the long term, the city has to begin looking at ways to increase revenues. That could include raising parking meter rates from 50 cents to $1 an hour in high demand areas, and from 35 cents to between 50 cents and 75 cents an hour throughout the rest of the city.

McCarthy noted that parking meter rates haven’t been raised since 1991\. Business license fees, which vary depending on the type of commerce, also haven’t been raised in more than a decade, McCarthy said.

The city’s bed tax, which is 12.5 percent on the price of a hotel room in Santa Monica, is less than many other cities in the region, she said.

“For the longer term, it’s fair to say that we’ll look at (increasing) the hotel tax,” McCarthy said.

But to what point people will agree to tax themselves is the big unknown. That’s why the city is beginning to reach out to the community to gauge support, she said.

“In terms of achieving a vote of the community, obviously there is lower hanging fruit but the city wants to work with the business community and neighborhood groups to look at tolerances,” McCarthy said.

“We are looking at everything and we know there is an aggravation factor that could run counter to the overall objective,” she said. “We see ourselves very much in a recovery mode and we don’t want to do something precipitous to hurt that recovery mode.”

> “We see ourselves very much in a recovery mode and we don’t want to do something precipitous to hurt that recovery mode.” — — SUSAN MCCARTHY Santa Monica City Manager

McCarthy acknowledged that if the city was to raise metered parking, parking would have to become more convenient for people. However, based on the fact that cities like Pasenda and Beverly Hills charge more than here, the affluence of Santa Monica should be able to absorb such an increase, she added.

Gorton Vallely, owner of Al’s Tire Supply Co. Inc., said raising fees and taxes actually hurts the business owner and could prove counter productive since commerce is what makes the city thrive. He wondered why the city doesn’t do more to cut its own expenditures instead of making it more difficult to do business in Santa Monica.

“I haven’t heard a tremendous amount of conversation on how to stop the bleeding,” he said. “I’m not real happy hearing the numbers coming out of this. The city needs to slow down on spending, cut down on the bleeding and help the business community get stronger.”

*Originally published in the Santa Monica Daily Press print edition on December 3, 2002.* [Read the original PDF.](https://s3.us-east-1.amazonaws.com/smdp%5Fbackissues/120302.pdf?ref=smdp.com)