Culver City residents may have to pay more if they want to continue enjoying the current level of city services, Mayor Paul A. Jacobs said this week.
Speaking to a luncheon crowd of nearly 400 at the Veterans Memorial Auditorium on Tuesday, Jacobs said that if there is to be less commercial development, as residents seem to want, then residents will have to fill the gap in the city’s general fund budget.
With a fluctuating economy, the city must become less dependent on sales, hotel and other non-resident taxes as major sources of revenue if residents expect to maintain current city services, he said.
“We need to be less consumer-oriented and more service-oriented,” Jacobs said. “The sales tax is the yoke around our collective necks.”
City officials estimate that 65% of the city’s $34 million in general fund revenues comes from businesses, raised through sales, utility user and hotel occupancy taxes. They estimate that taxes and fees paid by residents account for 25% of revenues.
Last year, the city faced a deficit and increased some fees and taxes, including the utility user tax, to balance the budget.
User Fee Increase
Projected revenues for the 1989-90 are about $2 million less than anticipated expenditures. City officials are likely to raise more user fees to balance the budget, city officials said, although no specific fees have been identified.
Many other cities facing a shortage of traditional sources of revenues also are turning to increased fees for city services to balance their budgets.
Last year, for example, Beverly Hills reviewed all fees for city services to determine which ones could be increased. Increasing fees for such services as fire inspections, recreational programs and building permits is expected to raise an additional $1 million.
Don Oblander, Beverly Hills finance director, said cities are trying to recapture the cost of city services from residents who actually use the services instead of taxing everyone.
In Culver City, Jacobs said residents have been lucky to have businesses raise most of the general fund revenues through business permits and hotel occupancy, property and utility user taxes.
‘A Free Ride’
“We have been getting a free ride,” Jacobs said in an interview after his speech. “As residents, we have enjoyed for a long time a good part of the bill being paid by non-residential taxpayers.
“Ideally, I would like to see the residents pay nothing and have the commercial side pay 100%. But realistically, if and when these sources of revenues are reduced, we must become prepared to fill that gap. I’m trying now to prepare the community to be sensitive to the budget constraints.”
At the luncheon were members of local civic and service groups, homeowners’ associations, social service organizations and business owners. It is these leaders, Jacobs said, that must help prepare the community for the shift in revenue sources.
“The time has come to send a message,” Jacobs said. “Without that kind of leadership we are not going to make the kind of changes we need to.”