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City of La Palma
7822 Walker Street
La Palma, CA 90623
Ph: (714) 690-3300
Fx: (714) 523-2141
Financial Facts FAQ's

The questions below have been compiled from residents that spoke at Town Hall Meetings, participated in the Community Survey conducted online and at City Council Meetings. Check back, as this section will continue to be updated.  

What is the financial problem for the City?

Since 2011, the City has experienced a 24% revenue decrease (over $2.9 million). What has caused this loss in revenue?  Several factors, which include a $1.6 Million loss in Sales Tax due to a loss of a major business, a$200,000 loss in Sales Tax as a result of a business model change of a local company, a $400,000 loss in Sales Tax from declining oil prices, a $158,000 loss of Property Tax due to a key property owner moving to non-profit status, and $500,000 loss to the General Fund due to the State dissolution of Redevelopment. 


In addition the City has had rising costs, which includes increasing retirement costs largely associated with prior unfunded liability obligations, and increasing insurance costs due to loss history and escalating cost trends.


The projected ten year gap shows consistent unbalanced budgets throughout the period, beginning with the 2016-17 projected deficit of $771,800 and increasing to a projected deficit of approximately $1.5 million by Fiscal Year 2025-26. If nothing is done to address the structural deficit, the City will have come close to exhausting its General Fund reserves by Fiscal Year 2025-26.

What has the City done to manage spending and address revenue loss?

In response to decreasing revenues, the City has taken several steps over the past several budget cycles to address its financial situation.  Through the revisions in the General Plan, revenue opportunities were created, including digital billboards along the freeway corridor.  In addition to creating new revenue opportunities, the City has made several reductions including a 20% reduction in full time staff, restructuring throughout the organization, significant changes in both the 2011 and 2015 labor agreements, and cuts to programs and expenditures. 

How was Measure JJ placed on the November 8, 2016 ballot?

On July 5, 2016, the La Palma City Council voted 5-0 to place a measure on the November 8 ballot asking voters to vote on the establishment of a one percent (1%) transaction and use tax (local sales tax).

How much money would the ballot measure raise and who pays it?

The one percent (1%) transaction and use tax (local sales tax) is estimated to bring in an additional $1.5 million annually to the City. 


The 1% local sales tax is imposed on the same goods and merchandise that sales tax is currently paid on and will be passed on to anyone who makes a purchase within the City of La Palma, including nonresidents. In addition, where sales tax is generally allocated to the jurisdiction where the sale is negotiated or the order is taken, the 1% local sales tax is allocated to the agency where the goods are delivered or placed into use.  So in addition to point of sale purchases made in La Palma, the 1% local sales tax would be applicable to items purchased outside of La Palma and delivered and/or used in La Palma such as online and vehicle purchases. The additional tax on a $1 item would be 1 cent.

What exclusions or exemptions apply to the 1% local sales tax?

When it comes to exclusions or exemptions, the 1% local sales tax is the same as the existing sales tax that is paid now. These exclusions continue to include categories such as Necessities of Life (food, medical, housing) and General Public Benefit entities (alternative energy, museums, public art, nonprofit, religious, and educations organizations).

Could the State cut or take the additional revenue generated by the 1% local sales tax?
No. All funds raised by the 1% local sales tax would be legally required to be spent in La Palma, ensuring that our tax dollars are used locally, with no money going to Sacramento.

How would the additional revenue be spent if the measure passes?

The 1% local sales tax is a general tax to fund municipal services. The money will be put into the General Fund and used towards general services the City offers which could include Police, Recreation, and Public Works.   The City Manager will issue recommendations where the money should be used, however, the City Council has the ultimate decision making authority.

Is there an end to the 1% local sales tax increase?

No, there is no sunset date on the 1% local sales tax.  The City Council does have authority to reduce the utility user tax during its consideration of the City’s General Fund Budget should the projected fiscal condition of the City not be adversely impacted by a reduction.      

What will happen if the measure does not pass?

Without additional revenue, the City will need to reexamine current services and make additional cuts to reduce costs.  Potential actions by City Council could include contracting out Police Services at reduced service levels (which could close the La Palma Police facility, have fewer Officers on patrol which could increase response times, the loss of Community Based Policing and the elimination of the Volunteers in Policing program).  In addition, there could be reduced maintenance/upkeep of City parks and streets, cuts to graffiti removal, further reductions to Recreation Services up to cancellation of citywide events such as the 4th of July Run, Concerts in the Park, and Halloween Carnival.

I have questions about information I received from a campaign. Who can I talk to about that?

City staff are unable to answer questions about any campaign. They can only provide neutral information and facts about the measure, such as this fact sheet. For questions regarding the campaign, please contact the individual campaigns for or against the measure.