The Financial Future of Glendale: A Critical Look at Proposed Tax Changes for Property Owners. As the City of Glendale initiates its budget discussion for the • FY 2023-24 General Fund Projection • General Fund Five-Year Forecast • FY 2024-25 Proposed General Fund Budget • Potential Future Revenue Enhancements, the spotlight is on the potential introduction of new taxes, particularly those affecting real estate. The city’s approach to raising revenue may soon make significant demands on property owners, both residential and commercial. The urgency of this issue is underscored by an upcoming City Council meeting on April 30, 2024, at 2:00 PM, a time many might find inconvenient. Property owners and other stakeholders are urged to voice their concerns directly to City Council members, as their financial burden may increase notably if these proposals are enacted.
Understanding the City Transfer Tax Proposal
Property transactions in Glendale are subject to a Documentary Transfer Tax paid to the County of Los Angeles. For example, a property sold for $1,000,000 incurs a tax of $1,000. However, the city is considering implementing its own City Transfer Tax, which could significantly raise the cost of selling property. Let’s break down the proposed models for a $1,000,000 sale.
- Model #1: Inspired by Santa Monica, this model proposes a $3.00 per thousand rate, resulting in a $3,000 tax on a $1 million sale.
- Model #2: Following Culver City’s example, this would charge $4.50 per thousand, totaling $4,500 for the same $1 million sale.
- Model #3: An alternative marginal rate of $0.55 per thousand would result in a $550 tax on a $1 million sale.
For properties fetching higher sale prices, such as $2 million+, the taxes under these models would escalate correspondingly, adding a significant financial burden to property transactions.
- Model #1: Inspired by Santa Monica, this model proposes a $3.00 per thousand rate, resulting in a $12,000 tax on a $2 million sale.
- Model #2: Following Culver City’s example, this would charge $4.50 per thousand, totaling $14,500 for the same $2 million sale.
- Model #3: An alternative marginal rate of $10.00 per thousand would result in a $20,000 tax on a $2 million sale.
Broader Taxation Strategies on the Table
The City of Glendale is considering several other avenues to increase revenue:
- Parcel Tax: This could directly impact rent levels as property owners might pass these costs onto tenants.
- Business License Tax: Despite promoting small business growth through events like “Let’s Grow Glendale,” this tax could deter business expansion.
- Cannabis Tax: This new potential revenue stream targets a specific industry with varying degrees of taxation across different locales.
The Context of Glendale’s Financial Strategies
The push for increased taxation comes against the backdrop of ongoing financial obligations, such as pensions and salaries, which the city has struggled to manage effectively. The need for new revenue streams is exacerbated by a growing budget where previous projections have fallen short of covering increasing expenditures.
Other proposed financial strategies include:
- Introducing a “mansion tax” on high-value property sales.
- Exploring citywide fees, such as reducing parking times and adding billboards along major corridors.
- Developing city properties into housing to generate lease revenues.
Citizen Involvement and Fiscal Responsibility
The proposed tax changes, especially the city transfer tax, are not temporary fixes but could become permanent burdens on property owners. The city has also suggested other revenue generators like increased utility costs and enhanced parking enforcement, which collectively could impact the cost of living and doing business in Glendale.
Given the significant implications of these proposals, it is crucial for residents and business owners to engage with the city council, express their opinions, and participate actively in council meetings. The choices made now will shape Glendale’s financial health and livability for years to come.
Take a look at the Budget Agendas for the month of May. Ensure to note your calendar, as the Date to approve the budget is June 4th. More importantly, if they decide to go for a parcel or City Transfer tax, these must be voter-approved. Be sure to do your homework and, more importantly, vote! Link to the Budget agendas.
Discussion from February: Back in February, I wrote a post about the City of Glendale, considering all the above. Here is an excerpt: Faced with a mounting pension obligation of $678 million and a need for increased revenue, the city council is considering various taxation strategies. Among these is a ‘Mansion Tax,’ a concept echoing the recent tax changes in Los Angeles. This blog post delves into the implications of such taxes on higher-end properties and their broader impact on the economy, especially concerning job creation and sustainability. Read the entire post.
Conclusion
As Glendale considers these critical financial decisions, the potential impact on property owners, renters, and businesses cannot be overstated. With substantial changes on the horizon, staying informed and involved is more important than ever for all stakeholders in the community. Remember, the financial pressures facing the city are not just numbers on a budget line—they are real challenges that will affect real people in tangible ways.
Contact your Glendale City Council:
GLENDALE CITY COUNCIL
Mayor Elen Asatryan Email: [email protected]
Councilmember Ara Najarian Email: [email protected]
Councilmember Vartan Gharpetian Email: [email protected]
Councilmember Ardy Kassakhian Email: [email protected]
Councilmember Daniel Brotman Email: [email protected]
PLEASE CALL ALL GLENDALE CITY COUNCIL MEMBERS AT (818) 550-4400
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