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Calabasas staff outlines 1% sales tax proposal to close long‑term budget gap; commissioners debate fiscal emergency
Summary
City staff told the Planning Commission a 1% local sales tax could generate about $5.3 million annually and help avert reserve depletion within five to six years; commissioners questioned alternatives, costs of outreach, and whether to ask the council to declare a fiscal emergency to secure a June ballot placement.
City finance staff and city management briefed the Planning Commission on Nov. 20 about a potential local sales tax initiative to address a structural shortfall in the general fund and to preserve city services.
Staff presented a multi-year projection showing rising uncontrollable costs (sheriff services, electricity and other operating costs) that, if left unaddressed, would produce a structural shortfall and exhaust general‑fund reserves in five to six years. The city began its budget process with a roughly $2 million gap and, after reductions, adopted a budget that the presenters said leaves an anticipated near‑term shortfall of about $600,000.
Why a sales tax: Presenters said a local sales tax is the most palatable way to raise recurring revenues without relying solely on property owners. Calabasas’ current combined sales tax rate is 9.75%; Los Angeles County’s statutory cap is 10.75%, leaving a 1% increment that could be claimed by the city or by the county. Staff’s consultant (HDL) supplied the city’s estimate that a one‑cent (1%) local sales tax would generate about $5.3 million annually (a 0.75% measure was projected at roughly $4.0 million/year).
Use of funds: The proposed revenue would be directed to general‑fund services — public safety, fire protection, parks, streets and vegetation management — rather than to groceries, medicine, tuition or housing (items exempt from the proposed tax).
Costs and process: The council will receive survey results Dec. 3 that could inform whether to proceed with a ballot measure. Staff reported initial outreach and polling costs of roughly $50,000 for statistically valid surveys and $35,000 for outreach design; a June ballot placement would impose additional county election costs (estimated near $100,000). If the council wishes a June ballot, state law may require a fiscal‑emergency declaration to meet filing deadlines.
Commissioner debate: Some commissioners urged a quick, visible push — arguing that if the county claims the available 1% the city will lose local control of those dollars — and supported using a fiscal‑emergency declaration to secure a June ballot. Others cautioned that declaring a fiscal emergency could harm the city’s reputation and urged more internal cuts and documentation of cost‑control efforts before asking voters for new taxes. Staff said past actions (hiring freeze, elimination of a communications team, fee increases, and event cuts) have already reduced costs.
Key figure: staff estimate for a 1% sales tax — $5.3 million per year (HDL consultant).
Next steps: Staff will present survey findings to the City Council on Dec. 3; the council will decide whether to place a measure on the ballot and whether to seek a June or November election date.
Context: Staff stressed that many neighboring jurisdictions have pursued similar measures to retain local shares of sales tax as LA County revenues are pressured by large county liabilities.
Quotes: "If Calabasas does not claim that 1%, we run the risk of the county or any other taxing entity coming in claiming that 1%." — Staff presenter (paraphrased).
