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What Makes Culver City Different Financially

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Second of two parts

Re “The Eyes of Taxes Are Upon Us, Happily”

[img]847|right|Mr. Muir||no_popup[/img]One reason city officials and the City Council were so determined to push through a half-cent sales tax increase last November was an oddity in Culver City’s financial structure.

“Culver City is different from some other communities,” said Jeff Muir, the City Treasurer. “For them, property taxes form a large part of their budgets, and for us, sales taxes are the biggest part.”

For nine months of the year, revenue flows evenly into the City Hall treasury. “But every year there is a fourth-quarter spike,” Mr. Muir explained, because of holiday shopping at the gigantic revenue-producing Westfield Mall.

When a mere half-cent tax is tacked onto sales, cash registers at City Hall – for the first time in years – start whistling happy tunes.

From April 1, when the sales tax went into effect, through June 30, closing day of the fiscal year, it is estimated that a fresh $1.8 million rolled into the hungry Culver City treasury.”

Over 12 months, Mr. Muir projects, the new tax will produce an extra $8 million. This would exactly cover the budget deficit City Hall has been running in its general fund since the recession began drastically changing the city’s financial calculus.

Culver City follows the national economic cycle, Mr. Muir said. “Because sales tax is such a large part of our budget, during the recession, our revenue steadily was going down,” he said. “Since the recovery began, it has been steadily increasing.”

But at times the rally has felt painfully slow to the city treasurer.

“Our revenue has been creeping back up for a couple of years,” Mr. Muir said. “Between this past fiscal year and the present fiscal year, we are going to reach our (income) high, where we were before the recession hit” five years ago.