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Transportation Funding, Bed Taxes Help Offset Revenue Decreases, Finance Officials Say
 

Bob Kronovetrealty
We Love Property Management Headaches!

Santa Monica Convention and Visitors

By Jorge Casuso

February 11, 2019 -- The City Council on Tuesday is expected to tweak its midyear budget to reflect an estimated net increase of $800,000 in expenditures, according to a Finance Department report.

The recommended revenue adjustments result in an increase of $10.1 million in revenues, mostly from transportation funding and decreases in parking citations and several taxes, according to staff.

Most of the increase comes from $5.8 million that will be added to the Big Blue Bus fund after taking into account revised estimates from Transportation funding and State Transit Assistance funding, as well as final funding from LA Metro.

The additional $4.3 million in revenues come from adjustments to the General Fund and range from increased revenue from bed taxes to delayed payment of sales taxes.

The $1.3 million adjustment in transient occupancy taxes is due to a "continuing increase in average room rates," while another $1.2 million comes from traffic-related fees and citations.

Sales tax revenues increased $1.1 million after payments due in the previous fiscal year were delayed by changes to the State's sales tax administration.

Other revenue increases came from transfer taxes from the sale of "very large properties" ($900,000), from faster than anticipated increases in interest rates for investment income ($900,000) and from parking rate increases in City owned lots ($800,0000).

The revenue increases were in part offset by "significant" decreases in parking tickets that generated $800,000 less than projected, $400,000 less in business license taxes and another $400,000 less in taxes "paid by some large taxpayers due to the volatile nature of their businesses."

The City also collected $500,000 less in fees from bike share due to "competition from dockless mobility options," staff said.

"Even with the changes, the increase in General Fund revenues over the prior year (exclusive of certain one-time items) is a modest 2.6%," staff said.

The proposed adjustments "align with the revenue and expenditure projections reflected in the Ten-Year Financial Forecast" presented to the City Council last month, staff said ("Financial Forecast Cloudy as City Prepares to Unveil New Budget," January 18, 2019).

According to the forecast, average annual growth in Santa Monica has dropped from more than 8 percent in the three years following the 2007-09 recession to 4 percent over the past three years.


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