The Signal Hill City Council unanimously voted to place a local funding measure on the November ballot this year that seeks to increase its sales tax.
The proposed increase aims to “maintain basic city services with locally-controlled funding,” according to a statement from the city. If approved, the increase would boost Signal Hill’s current rate of 9.5% to be on par with Long Beach’s 10.25%.
The money generated by the tax would be used to fund city services such as street repair, infrastructure maintenance, 911 emergency response and crime prevention. According to city officials, the measure includes strict accountability requirements and would be subjected to annual independent financial audits.
Signal Hill City Manager Hannah Shin-Heydorn said the tax, dubbed the Signal Hill Financial Stability Measure, would keep funding within the city, adding that most of the city’s tax revenue goes elsewhere.
“Unfortunately, nearly all of the sales tax generated in Signal Hill goes to the State of California or Los Angeles County,” she said in a statement, “leaving the city in a difficult position with rising costs and the financial impacts of COVID-19.”
Currently, Signal Hill keeps about $1 for every $100 in taxable sales, according to a city staff report on the measure. The increase would add an additional $0.75.
For a city that has historically relied on oil sales, the coronavirus pandemic has been damaging. It gutted a demand for crude oil. Signal Hill Petroleum Executive Vice President and COO David Slater told the Long Beach Business Journal that the company’s crude oil prices dropped but stayed above $0 per barrel.
Despite the city having the Signal Hill Auto Center as an outlet for sales-tax revenue, car sales were also slashed as a result of the pandemic.
This year, J.D. Power found that national new car sales in April were off by 45% compared to 2019.
Signal Hill officials are currently projecting $1.8 million in operating reduction as well as hiring freezes for its 2020-2021 budget.
No public comments were made during the council’s virtual meeting where the ballot measure was moved along. Arguments for or against the tax must be submitted to the city clerk’s office by Aug. 13.
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