City of Commerce Essential Services Protection Measure

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City of Commerce Financial Basics

The City of Commerce utilizes its main operating fund, called the General Fund, to pay for important essential services that residents use every day. These services include police and fire protection, libraries, fixing streets and potholes, maintaining parks, running recreation programs, cleaning up graffiti and all other day-to-day operations of the City. The money in the General Fund comes from diverse revenue streams such as sales tax and property tax, with sales tax providing a large amount of the money used for City services. A major source of sales tax revenue for Commerce is the Citadel, and most shoppers are non-residents, meaning a significant portion of sales taxes paid in Commerce is contributed by those who live outside the City.

The Commerce Casino is a major taxpayer in the City that generates over $30,000,000 a year in revenues for the City, or over 40% of the City General Fund budget of approximately $80,000,000. The General Fund provides the resources that support parks and recreation programming, the public safety budget and the budget for library operations. Casino Revenues provide a significant additional boost to the City’s budget, enabling the City to offer extensive programming. Unfortunately, the Attorney-General for the State of California has ruled that significant operations at the Commerce Casino are no longer allowed. This determination could reduce Casino Revenues to the City by up to $18,000,000 of the $30,000,000 in total. Such a reduction would have a drastic reduction in City revenues and create significant risks to ongoing operations.

On February 24, 2026, the Commerce City Council unanimously adopted a resolution declaring a Fiscal Emergency over the impacts of the Attorney-General’s decision. They also took action to adopt a resolution calling an election for June 2, 2026 to hold a vote to add a quarter cent sales tax in the City of Commerce. Voters will be presented with an option to vote on the sales tax (also known as a Transaction and Use Tax or TUT) on the June 2, 2026 ballot.

Understanding Commerce's 10.50% Sales Tax Rate

The total sales tax rate in Commerce is currently 10.50%. This tax is divided among the state, the county, special districts and the City itself. Of the current 10.50% total rate, the City of Commerce only receives 1.75% for local control. The proceeds of the total sales tax rate are allocated as follows:

6% goes to the State of California for state programs, with the City having no control over this amount or how the money is spent.
2.75% goes to Los Angeles County for services like transportation and housing assistance, with the City having no say in this amount or its expenditure.
1.75% goes directly to the City of Commerce and into the General Fund to pay for local services such as public safety, fixing streets, libraries, parks, and general City operations.

The state and county portions of the tax are set by law and do not stay in Commerce.

The Critical Last Remaining ¼ Cent

After the last election in 2024, the total allowable sales tax rate in Los Angeles County became capped at 10.75%. Since Commerce's current rate is 10.50%, this means there is still a ¼-cent (0.25%) of sales tax space left before the cap is reached. This remaining capacity could be claimed by Commerce, the County, or another regional agency.

Why Local Control is Important Now

Los Angeles County is planning to put a ½-cent sales tax measure on the June 2026 ballot. This action is a strong reminder that the City of Commerce has a narrow window of opportunity to protect its sales tax capacity.

If the County or another taxing agency takes that last ¼ cent of available sales tax capacity, the money will not stay in Commerce to pay for local, quality-of-life services; it will be allocated to the County to fund County-wide operations. The City may permanently lose access to this potential local revenue source.

To prevent the potential loss of a local revenue source, and to address the potential immediate loss in revenue from casino gaming operations due to the Attorney General’s recent action, Commerce is placing its own sales tax measure on the June 2026 ballot to ensure that the last ¼ cent of capacity stays local and is allocated for Commerce residents. Projected estimates note that claiming this ¼-cent would raise around $4.5 million annually in revenue, which is roughly the amount of money it takes to keep the City’s library services running. The goal for the ¼-cent sales tax is to keep the funding under local control and directly support and maintain key City services.

For more information about the City’s budget process, please visit: https://www.commerceca.gov/city-hall/finance

Frequently Asked Questions

Expand/Contract Questions and Answers

Q: What is the sales tax measure?
A: The measure will allow for Commerce residents to vote on adding a ¼-cent (0.25%) sales tax. A quarter cent is 25 cents on every $100 spent on taxable purchases. The title of the measure is Commerce Essential Services Protection Measure.
Q: What kind of tax will this be, and where does the money go?
A: This is defined as a “general tax.” State law requires that 100% of the money raised by this measure to legally stay in Commerce to pay for local services. These services include:
- Safety and emergency response
- Library services
- Programs for the youth and seniors
- Keeping public areas clean and safe
- Repairing streets
Q: What is required for the measure to pass?
A: Because it is a general tax, it only requires a simple majority (50% + 1 vote) to pass. Voters will vote on the ballot measure on the June 2, 2026 ballot.
Q: What is the primary purpose of this measure?
A: If approved, this measure would allow Commerce to claim the last ¼ cent of local sales tax capacity. This action protects the funding for local use and prevents it from being permanently claimed by outside agencies. The additional revenues will diversify City revenue streams and mitigate some impacts from the Attorney-General’s ruling that is expected to negatively impact the Commerce Casino.
Q: If approved, what are the estimated benefits for the City of Commerce?
A: If approved, the measure is estimated to generate $4.5 million annually for Commerce. These funds would help sustain essential services for residents, including safety/emergency response, youth and recreational programs, safe and clean public areas, and street/infrastructure repair. Commerce tax dollars would be invested directly back into the Commerce community.
- Commerce would gain an estimated $4,500,000 annually in funding.
- This funding would be used to keep up essential local services, including safety/emergency response, youth programs, safe/clean public areas and street/infrastructure repair.
- Commerce tax dollars would be invested directly back into the Commerce community.
- A significant majority of the sales tax paid in Commerce is actually paid by non-Commerce residents. The Citadel Outlets are a destination shopping center that bring in regional and international shoppers, who generate sales tax revenues for the City of Commerce.
Q: What happens if the measure is not approved?
A: If the measure is not approved, the remaining ¼-cent of local sales tax capacity remains available for a government agency to claim. For example, the County of LA or LA Metro could seek to capture that remaining ¼ cent tax. If that happens, Commerce may permanently lose access to this funding source, and that last portion of sales tax would go instead toward programs and operations outside the City, rather than being invested locally.
Q: What is the City doing to address the Attorney General’s ruling that is negatively impacting the Casino Revenues?
A: The City of Commerce stands with a coalition of "Cardroom Communities" across California—including Bell Gardens, Hawaiian Gardens and Gardena—that are exploring all legal and legislative remedies to protect their residents from the fallout of these regulations. Kyle Kirkland, President of the California Gaming Association, estimated that this could lead to a $2 billion-dollar economic impact in and affect tens of thousands of jobs within Los Angeles County.

Q: What is the sales tax measure?

Q: What kind of tax will this be, and where does the money go?

Q: What is required for the measure to pass?

Q: What is the primary purpose of this measure?

Q: If approved, what are the estimated benefits for the City of Commerce?

Q: What happens if the measure is not approved?

Q: What is the City doing to address the Attorney General’s ruling that is negatively impacting the Casino Revenues?