Hermosa Beach shoppers and business owners face a potential half-cent sales tax increase, higher parking fines, and new short-term rental fees as the city works to close a structural budget deficit driven by rising county contract costs and a $58 million unfunded pension liability.
The Hermosa Beach City Council voted 4-1 on Tuesday, June 23 to direct staff to draft ballot language for a half-cent sales tax measure headed to the Tuesday, November 3 general municipal election. If voters approve it by simple majority, the tax would generate an estimated $2 million annually, according to the Hermosa Review's coverage of the meeting. Councilmember Dean Francois cast the lone dissenting vote.
Finance Director Brandon Walker told the council that while the fiscal year 2026-27 budget is balanced, future years are not. The projected shortfall is driven mainly by three looming Los Angeles County contracts for beach maintenance, lifeguard, and fire services. Mayor Pro Tem Michael Keegan noted the lifeguard contract alone could run $3 million to $4 million a year, and that the LA County Fire contract renewal originally came in with a 33 percent increase.
The pension debt compounds the pressure. The city also faces a deferred infrastructure backlog ranging from $148 million to $280 million, according to a Hermosa Review analysis. The pier replacement alone carries a separate $58.6 million price tag in 2032 dollars.
Parking hits first
The most immediate impact arrives Saturday, August 1, when accelerated parking citation penalties take effect. Expired meters and time-limit violations jump to $75. Street sweeping fines rise to $55. Late payments now carry a penalty equal to 100 percent of the original fine if not paid within 21 days.
"Parking is a limited resource here in Hermosa Beach, and these updates reflect that reality," Mayor Mike Detoy said in a July 1 statement reported by the Daily Breeze. City staff estimates the increases will generate $350,000 to $450,000 annually for the general fund, according to the Daily Breeze.
Voters have said no before
Hermosa Beach voters rejected a three-quarter-cent sales tax increase twice: Measure B failed in November 2022 with 55 percent voting no, and Measure HB failed by an even larger margin in November 2024. Each would have generated roughly $3 million per year.
Councilmember Ray Jackson argued at the June 23 meeting that the city is "roughly $12 million behind where it would have been had earlier measures passed" since November 2022. Councilmember Rob Saemann said the city had "come a long way toward regaining trust" with voters since former City Manager Suja Lowenthal's departure, and that a single, straightforward measure had the best chance of passing.
A community survey showed 62 percent initial support when the measure was framed as a half-cent increase, above the simple majority threshold required.
More revenue tools under study
Beyond the sales tax, the council directed staff in April 2026 to study expanded short-term rental regulations in the coastal zone, though no formal rate or revenue estimate has been released. Officials have also discussed dynamic parking pricing, but no proposal has been formalized.
A countywide half-cent sales tax, Measure ER, takes effect Thursday, October 1, pushing Hermosa Beach's combined rate to 10.25 percent. State law AB 1768 raised the local cap from 2 percent to 3 percent, making the city's own measure legally possible, according to Finance Director Walker.
Staff returns to the council on Tuesday, July 28 with formal ballot language to meet the Los Angeles County filing deadline of Friday, August 7. Three council seats are also on the November 3 ballot.
