After a Special City Council meeting on July 27, 2020 to consider the sole agenda item of a real estate transfer tax being added to the November ballot, the measure passed. Now the rest of the work needed to take the measure to the voters in November needs to happen quickly.
The meeting was run by Vice Mayor Fisch, as Mayor Goran Eriksson was not in attendance. All four of the sitting council members voted to approve.
Of the people who offered comments from the virtual podium, the majority were opposed to the proposal, with the most common complaint being that the city needed to manage it’s resources, not ask for further funding.
The tax would be paid when real estate was sold. Many taxes of this kind specify that they are paid by the seller, or the buyer. Some are flat rate, some take a percentage of the sale price. The specific structure of Culver City’s version tax will be in the final language for the ballot.
From the staff report, the estimated funds to the city could range between $12 million and $19 million dollars
The measure is next scheduled to be reviewed by the Finance Advisory Committee.
Andrew Lachman the new chair of the FAC, noted that “The FAC is reviewing the report and all proposals for our special meeting. We are keenly aware of the profound challenges Culver City residents and businesses are facing during these difficult times, which is why we supported delaying and reassessing our approach to the business license tax.”
Lachman noted that from the financial perspective, it was time to consider any and all possible revenue sources. ” I think we have to explore every option in this economy and reduce our reliance on sales taxes to keep our quality of services while minimizing the economic impact on those people and businesses that are having a hard time.”
Does anyone else find it a little ironic that the council would think that in order to reduce the city’s reliance on sales taxes, they would need to increase revenues by raising the city’s transfer tax when a property is sold, with what amounts to a larger “sales tax” on property?
No George, it is not ironic. First of all, the current problem with reliance on sales tax is that retail is crashing. Second, sales taxes are regressive. A property transfer tax can have multiple brackets, including a floor below which it does not apply.