Why would we consider a Sales & Use Tax in Redondo?
Redondo Beach, like almost all cities, are facing ever-present strain on the City’s finances due to our Pension Obligations. Our Pension Obligations are significant and will keep growing until about 14 years from now. To provide some perspective, if the cost of participation in PERS were not increasing by $2.1 million in the coming year then Redondo would have a $600,000 surplus. Instead, we are reducing costs through several decision packages including the elimination of positions. Luckily, Redondo Beach saw this crisis coming so we have a PERS Reserve fund that we draw from which should hold us for a few years but now the entire 14 years.
To give you an idea of our projections, I have included our forecasted budget over the next 3 years, our best case scenario budget with a Sales & Use Tax increase and our worst case scenario. Click here to view.
Sales Tax is collected through the commercial properties in our city. Any sales tax collected through internet sales are collected at the County then distributed to the cities based on how much brick & mortar commercial you have in your city. So if you are Rolling Hills with almost no commercial you do not receive internet sales tax even though your residents are paying sales tax from their internet purchases. By instituting a .75% Sales & Use Tax, then we would get our Sales Tax from our commercial properties plus we would get .75% from internet purchases. Lawndale raised their sales tax at the last election. Of the cities in the LA County that put a sales tax increase on their ballot, 90% voted for the sales tax increase. Our best case scenario reflects ¾ of a percent increase.