While growth of West Hollywood’s sources of revenue is expected to slow over the next two fiscal years, City Hall has asked for an additional $7 million to fulfill a litany of spending requests.
According to the Fiscal Year 2024-2025 operating budget released this week, the city will have reeled in $150 million by the end of this fiscal year in July and stands to earn $159 million in FY25 — still falling short of the record-breaking $160 million hauled in during FY23, when the city only spent $128 million.
These days, the city is spending as much as it’s earning.
Most of that revenue comes from sales tax (23%), transient occupancy tax (hotels, 21%) and property taxes (18%). While revenue from property taxes is expected to rise by 10%, growth of sales tax and hotel tax revenue is slowing to a crawl, rising only 2% and 1% respectively.
“West Hollywood depends on a healthy tourism industry to provide a significant portion of its municipal revenues,” the city says. “Travel and tourism spending remain strong but are not experiencing the high growth rates that were realized over the last few years.”
City leaders are also watching the direction of the U.S. economy for potential problems, including uncertainty in the financial markets related to inflation and Federal Reserve actions to lower interest rates.
“Sustained high interest rates continue to affect the cost of doing business which can stifle economic growth,” the city says. “While we cannot say with certainty what will happen next, signs point to more moderate economic growth in the near future.”
The U.S. economy grew at a 1.6% annual rate in the first quarter of this year, adjusted for season and inflation, according to reports released Thursday by the Commerce Department. This growth rate was slower than the 2.4% economists had anticipated, and inflation is holding firmer, suggesting the Federal Reserve may find it challenging to reduce interest rates soon.
City Hall is also expecting to make about $750,000 less from parking fines and meters, which contribute 8% to the general fund. Though the city blames remote work and ridesharing for the decrease, it’s requesting $80,000 to audit the parking enforcement program to determine its efficiency.
That’s just one of dozens of spending requests to the FY25/26 budget submitted by the city’s many departments, which originally totaled $25 million before being whittled down by the city manager’s office. These include:
- $50,000 to support a Comprehensive Fee Study to determine the full costs incurred by the city to support the various activities for which the city charges user fees and establish appropriate levels of cost recovery.
- $250,000 for a Citywide Classification and Compensation Study to “ensure the city’s classification structure, plan and processes are in line with best practices and industry standards and ensure appropriate and competitive pay practices.”
- $1,000,000 to support studies and plans related to implementation of long-range plans.
- $60,000 to purchase supplies (including sleeping bags, hygiene kits, and water) and communications materials for homeless initiatives.
- $10,000 to host community events for youth, adults, and pets at Plummer Park and West Hollywood Park.
- $100,000 to support the November 2024 General Election
- $15,000 for photography at city events and activities.
- $20,000 to support the creation of a City Historian Laureate program.
- $88,000 to “support expanded community awareness and engagement” on key city priorities through with increased funding for video content and writing/editing services.
- $250,000 to support the Moving Image Media Art program, the ongoing digital art exhibition presented on the digital billboards Sunset Arts and Advertising Program (SAAP).
- $215,000 for projects related to the city’s 40th anniversary, including a citywide arts festival, a commemorative mural and library exhibition, a publication of collected poems created by the City Poetry Laureate, a 40th Anniversary Cultural History Grant and coordinated communications and outreach.
But they keep raising all the taxes, why doesn’t the city have more money?! 🤔😂
Drop the Fountain bike lane/eliminate parking plan…that’ll save tons.
Spending a quarter of a million dollars on a consultant determine if West Hollywood’s pay structure is competitive is absurd. Clearly the market indicates that WeHo employees are competitively compensated and management even more so. Some of these budget “priorities” are not exactly pressing.
They have in the past paid all sorts of “expert consulting” for projects that were never even a thought. $360,000 (I think around that cost) to move City Hall to the bus depot across from WeHo park, behind sheriff’s Station – WHICH IS COUNTY PROPERTY NOT OWNED BY WEHO. The was a pen abstract design awing of a new no recognizable building type, and a prepared standard initial project feasibility It seemed $60,000 to make the boilerplate bs report and $300,000 Payout (bribe) to somebody through the bogus company making the fake report. Pretty standard for WeHo & City Council.… Read more »
interesting
I wonder what the revenue would have been if all businesses paid their taxes. How can the city allow this to happen?
The unnecessary spending includes the executive’s salary. Rid them and hire new people that can bring the necessary changes to the city.
So much unnecessary spending.
Hmmm… for a city that doesn’t reference impact reports before it shoots from the hip, we certainly spend a lot of money on studies. I wish somebody would read these studies before we initiate programs.
Typically cities make a lot more in property taxes than they do in sales taxes, and typically hotel taxes are rather insignificant. So in Weho, we are blessed with lots of hotels, but low property tax revenue, per capita, is troubling. Of course the root cause of this is rent control. If we didn’t have rent control, many of the old dilatated apartments would have long since been torn down, and beautiful expensive high property tax condos would have been built. And all those renters would have long since moved out, and moved to places they can actually afford, hopefully… Read more »
The people of West Hollywood decided we wanted rent control because the City’s priority should be people, not profit or municipal revenues. Due to being blessed with the Sunset Strip, the Melrose Design District, the Studio District and Boys’ Town, we have sources of revenue that are the envy of other cities. Fortunately this allows the City to provide meaningful social services to people in need, including the homeless. The alternative would to live is an expensive, high density soulless community.
I agree we are blessed with a lot in West Hollywood. But soul-destroying rent control has left us with people who can’t afford to live here, who should have left decades ago, and we are left still having to take care of them. The people who show up at meetings and have community involvement aren’t the younger wealthier fair market paying people, but rather the freeloading, but very soulful people you speak of. I’m good with taking care of people who live here, to a reasonable extent, but not the homeless in any form.
Unfortunately a lot of younger people paying really high rents are not planning on being long term residents so they are less invested in the local political process. They vote but do not always pay attention to local issues, which allows interest groups with large sums to invest in elections, as power brokers.
In my opinion, Your logic is skewed and thinking that all of West Hollywood should be made up condo owners or homeowners. Is that what you expect? The City of West Hollywood was founded by renters and homeowners almost 40 years ago, since people living in this area once an unincorporated city of Los Angeles County, seemed to not be able to afford this area due to that year being one of the highest years of inflation ever that hit California and the nation in a time with higher rents and cost of living outpacing wages in 1983. Deja Vu… Read more »
If the city were all homeowners, can you even imagine how much more in in tax revenue we could take in? Just a guess but I would think perhaps 100 times, maybe more. Just imagine how many destitute people we could then take care of, elsewhere. But the problem is it’s all about greed the freeloaders want for themselves. They don’t really care about helping anyone else. It’s only what they can personally get for themselves. Our free enterprise system rewards those who made the best life decisions. In the long run, renting is dead end. Smarter people rent when… Read more »
You can really turn it down a notch or a few. Renters are not freeloaders paying the rent that the lease provides for. Rent control didnt work during Covid when some in rent controlled apartments saw the rents decrease and they were stuck with paying above market. In any transaction, the deal is made at the time of the handshake, – when a tenant signs a lease,etc. After that the market creates winners and losers. Nobody can say that a property owner in this town is a loser. If you need a scapegoat point at the politicians who gave crumbs… Read more »
Thank You, Larry. This person thinks current renters still can afford or it’s our fault that we lack housing choice! The reality is that units were more affordable and more readily available 20-40 years ago. I feel that I am shamed if I say I am a rent control or section 8 recipient in affordable housing. It’s as if I made poor decisions in life in a brutal free housing market. That is what Trump and other politicians are using us as freeloaders and entitlement beneficiaries. West Hollywood is a prime example how a rent controlled area became the most… Read more »
Wrong. “This person” never wrote renters can still currently afford condos. “This person” wrote they should have been renters in their youth for as short as possible, then bought a property, sold it in recent years for a million dollars, move to a cheaper area, and retire in luxury with self-respect. Actually, to go back to part of Larry’s comment above, it was the original founders of the City, who intentionally created this low class of renters, that I suspect the founders knew would eventually fail, and be destitute in their senior years, and thus keep voting for the politicians… Read more »
Anyone not paying the fair market rent, whether getting some form of subsidized housing, or those who originally rented fair market and the rent control system has allowed them to live decades non fair market rent, is freeloading off the system. I’ve never faulted the renters who follow the (bad) law. I agree politicians like John Heilman wrote these laws to have indebted selfish people who vote them in office, decade after decade. I don’t “pick” on renters, I’m just reminding people not a great idea to be penny wise in the short term by renting when it’s clearly a… Read more »
You are correct. WehoQueen considers you a freeloader and thinks you should relocate to Barstow. He only wants rich people in West Hollywood.
WehoQueen considers anyone not paying the fair market rent to be a freeloader. This also includes anyone renting under rent control rules. I know the concept of “live where you can afford” is very foreign to you. I dream of living in a mansion in Bel Air, but no one is subsidizing me, so I live where I can afford. If you don’t mind tumbleweeds blowing by, Barstow isn’t as bad as it sounds. Lots of cheap affordable apartments there. But I get it: you want to live around all the celebrities and rich folk where t.v. news crews often… Read more »
As a long time east side resident where we have around 60 new condos in my area and very few of them have actually been sold and they’re sitting empty I don’t think the plan to put more of those up will help.
Not sure if you know how free enterprise works, but the developer/owner will either wait it out and see if they can get buyers, or they will lower the price. At some point, they will be sold at the fair market price at the time of sale. Glad I could educate you.
I’m going to help you out with your dilemma regarding your bitter hatred of “renters”. Pack up and MOVE. “Renters”created this city, not you and your sub-national prop 13 property taxes..
West Hollywood owes EVERYTHING it is to “renters”.
I don’t move cause landlords make lots of money off un-smart people who rent their entire lives, rather than invest in themselves. Even with rent control, I make tons of money, but I should be making even more. You don’t get that, do you. Let me see if i have this right: west hollywood owes everything to “renters” (your quotes); the people who are a drain on everything, life-long freeloaders? that’s who we should be thankful to? And I don’t hate renters at all. I love them, cause if they were smart people, they wouldn’t rent, and then I couldn’t… Read more »