City Council held a special meeting this week to discuss whether to add an initiative to the November 3 ballot to increase the city's real property transfer tax (RETT) and shore up its financial state.
Following a two-hour debate, the Council passed a motion to place the measure on the ballot and to create an ad hoc subcommittee to fine tune the measure to reflect concerns of councilmembers and residents prior to its next reading at the August 3 council meeting.
Councilmembers wanted the subcommittee to come up with tax rates that are "fair, less burdensome and won't adversely affect" the local community. RETT is the tax that is paid by the seller of commercial and residential properties.
The meeting was prompted by the sharp drop in the city revenues as a result of the coronavirus pandemic and the partial closing of the economy.
During the meeting, some residents expressed opposition to the measure, saying it should be the last resort for the city "which needs to address its own problems before asking residents for help." Others contended that it was a rushed process.
But, Vice Mayor Alex Fisch, an early advocate of the RETT increase, replied that "election is the most transparent process."
Fisch continued: "the fact is, if we don't raise additional revenue soon, there will, sooner rather than later, need to be substantial cuts to city services. The pandemic induced recession made things much worse by slamming the city's finances."
In his twitter account, Fisch explained that "RETT is a more efficient and fair tax than most because it taxes socially created wealth (mostly land prices) a single time when the taxpayer has money to pay... The net effect is that house flippers and large developments will pay the greatest portion of the tax and no one has to pay until they are cashing out of Culver City."
City officials said that financial projections show the increase in RETT "would have raised between $8 million and $19 million in 2019."
If the Council approves the second reading next Monday, the RETT initiative will decided by the voters in November. It will be placed on the ballot as an amendment to the Municipal Code to increase the City's real property transfer tax.
Reader Comments(1)
Webstirrer writes:
Just looked at the Documentary Transfer Taxes for other counties and communities throughout California. If this Initiative passes, we will have the highest Transfer Tax not only in LA County, but in the state of California. They are looking to pass this to solve a temporary crisis. But, this initiative will stay on the books even after the Covid-19 crisis is over. Shouldn't we be using our Reserve Fund to get us through this crisis. Isn't that why we have a Reserve Fund in the first place?
08/07/2020, 3:43 pm