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Council Members Request Analysis of Mayor's Tax Measure

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By Jorge Casuso

June 10, 2022 -- The City Council on Tuesday is expected to ask staff to prepare a report analyzing the impacts of Mayor Sue Himmelrich's proposed ballot measure to dramatically hike the real estate transfer tax on high-end properties.

The report requested by three Councilmembers would focus on the fiscal and land use impacts of Himmelrich's “Funding for Homelessness Prevention, Affordable Housing, and Schools” tax measure.

The Mayor's measure -- which requires the valid signatures of 6,929 Santa Monica voters to make the November 8 ballot -- would charge an additional $53 per $1,000 on all properties valued at $8 million or more.

Himmelrich said she plans to submit more tha 10,500 signatures to the City Clerk next week.

"Now it's joust going to be the war," Himmelrich said Friday evening. "Us versus the developers. Bring it on."

The item, which was placed on the agenda Friday by Councilmembers Lana Negrete, Christine Parra and Kristin McCowan, requests a report similar to the one presented to the Council in July 2016 analyzing slow-growth Measure LV, also known as LUVE.

After reviewing the report, the Council must determine whether to approve Himmelrich's tax measure or place it on the November ballot.

In addition to studying the measure's fiscal impacts, the report would guage "its effect on the internal consistency of the city’s general and specific plans" and "its impact on funding for infrastructure," according to the California Elections Code.

It also would study "its effect on the use of land, the impact on the availability and location of housing, and the ability of the city to meet its regional housing needs."

Himmelrich's measure was countered last month by Councilmember Phil Brock, who on May 24 proposed that the Council place a rival measure on the ballot.

Brock's measure, which the Council voted 6-0 to consider, would charge a real estate transfer tax of $15 per $1,000 on commercial properties that sell for more than $8 million, with the tax applying only to the amount above that threshold.

Brock's proposed measure is far more modest than Himmelrich's -- raising some $15 million a year instead of an estimated $50 million -- and addresses a menu of budget line items that can change over time ("Brock Proposes Alternative to Mayor's 'Outrageous' Transfer Tax," May 26, 2022).

Both measures would require a simple majority of Santa Monica voters to pass. If both earn more than 50 percent of the vote, the one with the most votes would prevail.

If the Council votes on Tuesday to request a report, the findings could have an impact on what is expected to be a bitter and expensive campaign.

In 2016, the report on Measure LV warned the slow-growth measure could "undermine the community’s vision for Santa Monica’s future ("LUVE Could “Undermine Community’s Vision for Santa Monica’s Future,” Government Staff Report Says ," July 8, 2016).

The report -- which did not recommend how the council should act -- was based on staff research as well as the work of a consultant.

It also cited various studies on similar measures in other communities along with research on development policy.

Measure LV, which would have required voter approval for most major developments and planning regulations, was soundly defeated.

A developer-backed campaign spent more than $1.2 million opposing the grassroots measure ("More Than $1.2 Million Spent to Defeat Santa Monica’s LUVE Measure," February 6, 2017).

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