Council Moves to Hike Business Tax
June 16, 2022
At the City Council meeting on Monday, June 13, the Council voted in favor of putting a business license tax raise on the November election ballot. Action Item A3 read, “Discussion and consideration of whether to place a measure on the Nov. 8, 2022 general municipal election ballot to submit to the voters an amendment to Culver City municipal code section 11 to increase the business license tax rates and update various sections of the code; (2) (if desired) creation of an ad hoc business license tax ballot measure city council subcommittee and appoint two council members thereto; and (3) direction to the city manager as deemed appropriate.” The issue was previously raised at the May 23 City Council meeting, where a staff report stated that the tax rate hasn’t changed since the ‘60s, and it is time to change that. Vice Mayor Albert Vera and Council Member Göran Eriksson (both of whom are business owners) agreed that now isn’t the time for a tax increase on businesses. Mayor Daniel Lee believed that it should be placed on the ballot as soon as possible, to give the public the choice of who should pay their fair share. Eriksson raised a motion to postpone the ballot measure until the 2024 General Election, and that failed with a 2-2 vote (Lee and McMorrin were the nays). Council Member Alex Fisch was absent from that meeting. That theme remained the same this time, with many public speakers echoing Eriksson and Vera’s sentiments that now isn’t the time. Mayor Lee, however, said that there’s never going to be a good time for a tax increase but it is necessary due to the need to fund affordable housing. Staff prepared a report that detailed how Culver City’s business tax rates are below Santa Monica, Los Angeles and Beverly Hills. The staff presentation also showed that, following a survey, “59% of the residents surveyed supported the measure to increase the business license tax rates and exemptions to businesses with gross receipts under $100,000.” Staff recommended the creation of an Ad Hoc Subcommittee that would include two City Council members, for the purposes of, “Development of a new proposed business license tax structure; Whether or not to provide exemptions to businesses on the fi rst $100,000 of gross receipts; Whether or not to allow for annual Consumer Price Index increases; Writing the arguments in favor of the Measure if the city council votes to place it on the ballot; If desired, a public education program to inform the public about the ballot measure.” The item passed 3-2, with Vera and Eriksson the two nays. However, Action Item A4 did not go through. That one called for, “Discussion and consideration of whether to place a ballot measure on the Nov. 8, 2022, general municipal election ballot to develop an affordable/workforce housing parcel tax ordinance.” Eriksson was quick to say that he wanted this on the ballot. Vera once again said that this isn’t the right time, while Fisch said that the council should focus on the business tax for now. Lee agreed.