Santa Monica : Tax Hike Debate Postponed

The City Council postponed action this week on proposed increases in the city business license tax, which many business operators oppose as too large and not adequately justified.

The postponement, which came after more than three hours of discussion on the issue, became necessary when the council was unable to muster enough votes to extend its meeting past 12:30 a.m. Wednesday in order to take a vote. The matter will be taken up again next week.

The proposed increases would more than double the business license taxes for professionals and would raise the maximum tax for auto dealers to more than four times the current level.

City Finance Director Mike Dennis recommended the increases, saying they would bring the fee schedule in line with those of nearby cities and would distribute the tax burden more equitably among businesses. Dennis said the tax schedule had not been comprehensively reviewed since 1962, although some revisions were made in 1983 and 1984 for major business categories.

The new fee schedule would reduces the number of different categories from 73 to 16, and would bring in an additional $2.9 million annually. The city now takes in $6.8 million annually from the tax.

Nearly all of the speakers Tuesday opposed the tax hikes.

“The business community is skeptical about the need for the increases,” said Duane Nightingale, president of the Santa Monica Area Chamber of Commerce.