Editor’s note: The City Manager’s remarks about public support for the sales tax were recharacterized as a statement of fact rather than a defense.
The City of Carson will ask residents to vote for a slight increase in sales tax during the upcoming elections in November. The city council is asking for its constituents to pay 10.25% sales tax, an increase of 0.75%.
The sales tax hike proposal comes in anticipation of revenue loss caused by the COVID-19 pandemic, which has shut down thousands of businesses nationwide. The city council cited another reason for proposing this increase: The council accused the county of not giving the city its fair share of sales tax monies.
“The sales tax collected on products sold in Carson is currently [9.5%], of which the City of Carson only gets 1%,” City Manager Sharon Landers said. “The bulk of it goes to other entities like LA County and special districts in the region.”
The proposed tax hike can’t go higher than 10.25%, which is the ceiling put in place by the state. Landers said that if the city doesn’t pass the proposed tax increase, then the city would lose out on money to other cities.
This small hike on products would mean a lot for a small city like Carson, which is filled with small businesses that have felt the maximum adversity that COVID-19 has offered. The press release found on the city’s website states that the revenues collected from this sales tax will be deposited in the city’s general fund to fund services and programs for its residents.
The city manager suggested that there’s support for the tax hike.
“Early feedback is that our residents support this revenue measure,” Landers said. “They understand the need, and want this money allocated for city services like public safety and maintenance of infrastructure and community services.”
Carson generates $23 million annually from sales tax revenue. The hike would bring in an additional $11.9 million. The sales tax is the city’s primary revenue source that goes to the city’s general fund for city repairs, beautification projects and city events.
“We need to make sure progress continues in Carson and the level of security and public safety does not decline,” Mayor Pro Tem Jim Dear said in a released statement announcing the ballot measure. “Funds from the sales tax ensure that our local tax dollars remain in Carson to protect our essential city services. This small increase will make a huge impact to boost our local funding to maintain Carson’s 911 emergency response and public safety, protect small businesses that provide local jobs and make public areas clean and safe.”
The city council was also considering a truck intensive business tax, but shelved the idea following withering public criticism of the tax. During a council meeting on July 21, a flurry of public comments were submitted showing opposition to the tax measure. Critics argued that businesses have suffered due to the coronavirus and that this tax hike unfairly targets the goods movement industry.
One of those critics, the advocacy director for the Los Angeles County Business Federation, De’Andre Valencia, came out against the tax increase.
“Given the current economic turmoil due to COVID-19, this tax would target businesses that are unique to Carson and endanger jobs we need to keep our city prosperous,” Valencia said.
The Los Angeles County Business Federation is a grassroots alliance of more than 200 business organizations, representing 450,000 employers with over 3.5 million employees in Los Angeles County.
In regards to city funding, the census, which can be filled until the end of September, could provide the city much-needed federal money.
“The other really important way to secure needed funds for Carson is the census,” Landers said. “So far, only 60 percent of our residents have been counted. It is imperative that we get our complete count since federal grants disbursed to cities are typically based on population.”
Cities are awarded federal funding in proportion to their population.