Santa Monica residents left asking "Y?"

Montana Avenue is one of Santa Monica's jewels, where locals and tourists can shop, eat, and enjoy a number of retail businesses and restaurants. At a time, when the economy is uncertain and consumers buy less, streets like Montana Avenue begin to see the effect. Closed businesses have left empty spaces for lease and the new Santa Monica sales tax increase from 9.75 percent to 10.25 percent, which took effect on April 1st, might make it harder to fill those empty spaces.

During the elections on November  2nd, 2010, Measure Y- which asked voters to approve an  increase of the sales tax by half a cent- was approved by 61 percent of the voters, according to the City of Santa Monica's City Clerk's Department of Records and Election Services.

The sales tax increase will generate $11.4 million in annual revenue for the city of Santa Monica, according to Finance Director Carol Swindel.

Santa Monica City Manager Rod Gould's Agenda states that half of the sales tax increase revenue will go toward the funding of "911 emergency services, school and educational programs, neighborhood police patrols, services for residents with disabilities, public transit, youth violence prevention, programs to retain and attract business and jobs to the city, gang and drug prevention programs, library services."

Measure YY, which asked voters if the other half of the revenue generated by Measure Y should go to the Santa Monica-Malibu School District (SMMSD), was approved by 68 percent of the voters.

An exact amount as to how much will go toward SMMSD is unknown until state officials calculate it in 2012. Since Measure YY passed, half of that calculated amount will go to the school district, according to the City Council.

Theresa McCarthy, Chico's store manager, says the sales tax increase didn't affect their Montana Avenue business much and consumers continue to shop regularly. She also confirmed that most store owners on Montana Avenue have not been complaining about the increased sales tax, but she believes some businesses may be more impacted by the sales tax increase then others.

"Our business is a little better than last year, actually," said McCarthy.

As for using half the revenue from the sales tax increase to fund SMMSD, McCarthy believes that "we have to fund their education and if this is how we do it, then we do it."

Restaurant and café owners aren't affected by the sales tax increase as some retail owners, but consumers would nonetheless pay a few cents more for their coffee and a couple of dollars more on their clothing purchases.

Christina Lopez, Lucky Brand Jeans Supervisor, said that "there have been no changes and no impact from the sales tax increase."

Customers do tell her that they would do their shopping in the Westside, since the sales tax is lower than in Santa Monica.

"I've heard complaints from customers about it, but they still purchase anyways," said Lopez.

For Santa Monica consumers, the increased sales tax "would only apply to goods and services that are subject to the existing sales tax. For instance, purchases of prescription medications and food store items would not be taxed," said City Attorney Marsha Jones Moutrie in a released statement during the November 2nd election.

According to the Board of Equalization, the new sales tax rate applies to retailers who "have a business location in the tax area, deliver into the tax area using their vehicles, have an agent or representative in the area to make sales, deliveries, installations, or take orders. Sell autos, boats, or aircraft to customers that register them within the taxing area and collect tax on lease payments from property used in the taxing area."

There is still uncertainty regarding the revenue from the sales tax increase and how much of it will actually go to SMMSD.

According to Kathryn Vernez, Assistant to the City Manager for Community and Government Relations, a meeting will take place on April 26, where the City Council will further discuss Measures Y and YY.