Council Plans Massive New Taxes For March Ballot
The Courier has obtained a copy of a comprehensive plan by Beverly Hills city staff for new utility, sales, parking, documentary transfer, oil production and professional business license taxes delivered to the city council June 3 (download report) and August 19, 2008 (download report).
The plan was placed on the study session agenda by Mayor Barry Brucker.
The study, a copy of which is posted at www.bhcourier.com, calls for a 900 percent increase in documentary transfer taxes. This tax is imposed whenever a piece of real estate is sold.
The tax rate is currently 50 cents per $1,000 of sales price. At today’s rate, a home sold for $2.5 million results in $1,250.00 in taxes to Beverly Hills.
Under the new plan, this tax would jump to $4.50 per $1,000 of sale price which would make the city tax bill at sale $11,250.00.
The new rate would equal the highest rate charged by any city in Los Angeles County.
“Long-time homeowners would be hit hardest,” said one Beverly Hills resident who attended the study session. “As seniors sell their homes to finance their retirement years, this tax would be one of the biggest we would have to pay.”
City staff estimates that the City could raise between $1.9 million to $19.4 million.
The largest tax hike considered, however, would be the utility tax. Today, Beverly Hills has no utility tax although the City charges a mark-up on water and power purchased from the Metropolitan Water District and Southern California Edison. Utility taxes are paid based on consumption.
The proposed tax would yield between $1.9 million and $19.4 million annually. Renters and those on fixed incomes would be hit hardest.
Many cities with utility taxes exempt senior citizens and low income residents.
“I don’t like this tax,” one city council member told The Courier on the condition of anonymity.
“Many on our council don’t realize that our renters and seniors live on fixed incomes and every new charge makes it harder for them to live here. So many families really stretch to live in Beverly Hills so they can send their children to our schools.”
Brucker also placed new parking taxes on study session agenda.
The staff study concluded that the new taxes, to be imposed only on private garages, would yield approximately $1.5 million.
Most of the new taxes would require voter approval by either a simple majority or a 55 percent majority.
City attorney Larry Wiener has advised the council on which tax requires which level of approval. Councilmember Linda Briskman told The Courier, “We needed the study so that we could put the tax on the March ballot.”
Brucker has insisted this past week that City revenues are adequate now to cover all municipal expenditures, despite being told by City Manager Rod Wood in open council session that the City would reach “cross-over in 2009.”
“Cross-over” is the term used by City staff and the council to mean the point at which City expenses exceed City revenues. Brucker himself noted at a council meeting held in July of 2007 that the City needed new real estate development projects to “postpone crossover.” He now proposes substantial new taxes to provide the funds lost from the development projects which may not be built.