Santa Monica could reach highest sales tax rate in the country if measures approved

As Southern California counties and cities gather their ballot measures for November, a tax policy expert says Santa Monica could find itself joining another city with the highest sales tax rate in the country.

"The tax rate in Santa Monica would be 10 and a half percent, which would be tied with Chicago for the top rate in the nation," said Jared Walczak, a policy analyst at the Tax Foundation in Washington, D.C. 

Santa Monica currently has a 9.5 percent sales tax rate. The popular beach city is proposing to increase the sales tax by one half of one percent to help pay for community services. 

“[A] 1/4 cent would go to support affordable housing in our community, and 1/4 cent would go to continue to support our public schools,” said Santa Monica's City Manager Rick Cole. 

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On top of that, Los Angeles County is proposing to raise the sales tax by a half cent for transportation projects and programs. Together, the measures would put Santa Monica in Chicago's top rate category.

Los Angeles, San Diego and Ventura are among the Southern California counties that are asking voters to approve sales tax increases this November.

Walczak cautioned that with high sales tax rates, residents' cost of living can take a hit.

He advised voters to think about whether higher tax rates can be sustained over time. He said sales taxes don’t change as often as corporate or individual taxes. 

"They’re one of the few taxes that rarely go down," he said. 

Cole said that a significant section — probably a majority — of sales tax revenue in Santa Monica comes from tourists. And the results, he said, are things the community can enjoy.

“Citizens see the benefit right in their own home community of improved street work, improved park maintenance, improved public safety from police and fire. And they see it in their local schools,” he said.

Downey and Lynwood in Los Angeles County are also asking voters to approve city-level sales tax measures. Lynwood wants to start a one cent sales tax and Downey wants to increase its sales tax by one half of one percent.

Officials say their tax measures will help fund such critical services as police and fire protection and projects that include road repairs and bridge retrofitting.

Residents in dozens of municipalities are also voting this year on school bond measures that include property tax increases.

This story has been updated.