Sales, bed taxes may be raised
By Daily Press staff
Led by a surge in business at local car dealerships, City Hall raked in more than $24 million in sales tax revenue last year — making 2003 the most lucrative year in Santa Monica history.
“This is the highest year ever,” said David Carr, City Hall’s treasurer. “The thing that’s been driving it more than ever is new car sales... a lot of luxury car sales.”
Revenue from new car sales was up 21.6 percent over 2002, accounting for $5,007,307. Almost all other categories faired well too — from specialty stores to home furnishings — with only department stores and liquor sold at grocery stores taking a hit from 2002 levels.
“Most categories are up,” noted Carr. “The exception would have been department stores. Santa Monica Place is not doing so well.”
Carr feels the economy is finally recovering from 9-11.
The numbers are so good that City Hall upped its revenue estimate from sales tax earlier this year, and Carr said that estimate is likely to go up again this summer, towards the end of the fiscal year. Sales tax revenue is a key source of money for City Hall, along with property and utility taxes.
Steve Stark, City Hall’s finance director, said the sales tax returns are encouraging, but cautioned against making any quick conclusions that sales tax revenues would continue their upward trajectory. Stark said City Hall drafts its budget based on five years of economic trends.
“The goal with long-term forecasting is you don’t overreact to a short-term situation,” he said.
Local officials are considering putting a sales tax increase on the ballot this November, along with an increase to the local bed tax which is charged on all hotel rooms. But Stark said there’s concern among officials statewide that too many incremental tax hikes will be placed on the ballot.
“I guess the fear among local agencies is the voters are going to look at (the ballot) and say, ‘I don’t understand. No to all of these,’” Stark said.
— John Wood
Steve Stark
City Hall’s finance director
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Tax man
City Hall raked in $24,114,833 in sales tax revenue, a 7.8 percent increase over 2002. Here’s how receipts broke down in the top 14 business categories, which accounted for $16,861,440. The percentage change over 2002 is also included to the right.
• New cars $5,007,307 + 21.6 percent
• Auto lease $1,195,599 +13.3 percent
• Restaurant — liquor $1,637,098 +12 percent
• Family apparel $1,452,729 +7.8 percent
• Specialty stores $1,431,097 +28.4 percent
• Fast food $1,079,722 +0.6 percent
• Restaurants — beer and wine $831,275 +4.9 percent
• Department stores $778,261 -2.5 percent
• Women’s apparel $714,094 +7.2 percent
• Service stations $714,114 +3.1 percent
• Home furnishings $539,564 +10.1 percent
• Business services $521,149 +9.2 percent
• Hotels — liquor $487,089 +14.5 percent
• Grocery stores — liquor $472,342 -1.4 percent
Originally published in the Santa Monica Daily Press print edition on April 28, 2004. Read the original PDF.