Beverly Hills Mayor Sharona Nazarian held her third “Straight Talk with Sharona” on July 9, during which she spoke with Director of Finance John Muir about the city’s 2025-26 budget.
By having an open, public discussion about the new budget, which was approved at the City Council June 17 Regular Meeting, Nazarian hopes the community will gain a greater understanding of the city’s finances. Topics included the city’s various tax revenues, services supported by the General Fund and pensions for city employees.
Muir began by discussing the city’s singular financial profile. Given the size of Beverly Hills, the city has a relatively strong tax base, allowing for a variety of “world-class services.” He provided some quick statistics about the city’s financial stability regarding its property taxes, relative to other cities in Los Angeles County.
“Many residents may not realize just how unique our city’s finance position is,” said Nazarian.
For example, Muir stated that out of the 88 incorporated cities in Los Angeles County, Beverly Hills is a midsized city, but ranks fourth in terms of taxable value of those properties. Additionally, because of Beverly Hills’ position as a destination spot for high-end retail and luxury auto sales, sales tax is also a significant source of revenue.
Nazarian then spoke with Muir about the various services the city provides and where that funding comes from. Comparing the city’s budget to a checking account, Nazarian directed Muir to talk about the city’s General Fund, which finances departments such as police, fire, and recreation and parks. Eighty percent of the revenue that goes toward the general fund, Muir explained, comes from the “big four” taxes: property tax, business tax, Transient Occupancy Tax (TOT), and sales tax.
Nazarian asked Muir how TOT and sales tax, paid largely by visitors, help residents enjoy their everyday quality of life. Muir explained that the city’s world-famous hotels and retail corridors are not just “cultural assets” but “financial engines.” The TOT, which is placed on guests of short-term rentals, such as hotels, is paid for almost entirely by visitors to the city, Muir said. The combined tax revenue, paid mostly by visitors, amounts to approximately $91 million per year.
Through continuous monitoring and strategic planning, the city can withstand fluctuations in different sources of tax revenue caused by trends such as a projected decline in international travel.
Moving on to a discussion about property and sales tax, Nazarian directed Muir to explain how revenue from those taxes is divided to go to different municipalities.
“It’s a common misconception that 100 percent of property tax goes to the city you live in,” Muir explained. “[Residents] may pay high taxes, but it doesn’t all come to the city of Beverly Hills.” Muir gave a breakdown of how much the city gets from each property tax or sales tax dollar in comparison to the state and county.
Nazarian and Muir then discussed how those funds are used in the city. Beverly Hills spends 54% of its General Fund budget on public safety. In terms of total amount, Muir cited, the city’s budget for the police and fire department is the total budget for all of Culver City’s General Fund.
“We’re fortunate to have the revenue base we have. We dedicate a lot of it to public safety,” said Muir.
Other significant investments the city makes include the upkeep and maintenance of parks, streets and sidewalks. Most recently, City Council approved $86.4 million in funding for the Capital Improvement Projects budget. This funding will, for example, go toward investment in streets, parking assets, sidewalks, public facilities such as city hall and bathrooms at parks. Some of the public infrastructure projects the city is working on this year include playground replacements at La Cienega Park, the reconstruction of Coldwater Canyon Drive and a new restroom at Will Rogers Park.
The third “Straight Talk with Sharona” concluded with conversations about the CalPERS pension program for city employees and the city’s rainy-day funds. Muir explained that the pension cost for this fiscal year was $58 million across all city programs, with employees paying about $15 million and the city paying the rest.
Finally, Muir applauded the city’s proactive financial policies for emergencies, such as the policy of maintaining General Fund reserves of at least 40% of operating expenditures.
“Strong reserves and prudent financial management—that’s what allows the city to maintain the triple-A bond rating that we’re able to enjoy,” said Muir.
