The Los Angeles City Council gave every indication Wednesday it is ready to put a new tax measure before voters on the March 2013 ballot. The only question now is which one.
City officials were asked to draft a menu of options for the council to pick from -- either a half-percent sales tax hike or a series of smaller increases to three other taxes.
"Angelenos have always supported the city in its time of need," Council President Herb Wesson said after the 12-3 vote ordering the measures drafted with a final decision to be made in the next few weeks on which ones to place on the March 5 ballot. "I think they recognize we have cut and cut and cut and can't cut our services any more.
"The biggest complaints we get as council members is not being able to get the city services they are accustomed to."
The sales tax measure would bring the city's rate up to 9.25 percent, among the highest in the state. It is being discussed even as voters on Tuesday are going to decide whether to raise the state sales tax rate by one-quarter percent through Gov. Jerry Brown's Proposition 30, as well as increase various state income taxes. Los Angeles County voters also will consider Measure J, extending a half-percent sales tax hike for transportation for another 30 years beyond its current 2039 expiration date.
The alternative to the city sales tax hike consists of three proposals: adopting a tiered documentary transfer tax increase that would double
it from 4.5 percent per $1,000 to $9 per $1,000 on property over $586,000 in value; taking the parking occupancy tax from 10 percent to 15 percent; and a $39-a-year parcel tax to support parks programs.
The sales tax proposal is estimated to bring in $220 million a year -- far more than the three others combined. Wesson proposed it as an alternative to the other three. The City Council will need to make its decision by Nov. 14 to get it on the March ballot.
"We should stop nickel and diming the public to death," said Councilman Bernard Parks, who chaired the Budget and Finance Committee for six years and oversaw many of the cuts adopted by the City Council.
"I think it is time we have to look at some form of revenue coming in. We have cut more than we can afford, and I think the best way is to have a general tax that covers everyone. A sales tax would help with our structural deficit and help us with our rainy-day fund."
The three votes in opposition were Councilmen Richard Alarcon, Mitch Englander and Dennis Zine. Alarcon said he wanted more details on the impact of the proposals before voting for them, while Englander and Zine indicated they were concerned about the existing tax burden on residents.
Zine also asked for details on how much is paid in property taxes for city bond issues.
Mayor Antonio Villaraigosa has not endorsed the sales tax measure, saying he wants the City Council to approve measures he has proposed to reduce costs first.
"If the mayor is lukewarm, I will buy him a sweater to warm him up," Wesson said, adding he plans to meet with the mayor to discuss the issue.
Some business and taxpayer groups questioned why the money was needed.
Kris Vosburgh, executive director of the Howard Jarvis Taxpayers Association, said he believes the money will be used merely to pay more for city workers.
"This is not going to go over well with the general public," Vosburgh said. "This is a stupid tax, one that will not make people want to come to Los Angeles to live or to shop. It will make it more difficult on small businesses already struggling to stay afloat.
"And this is the most regressive tax there is. It hits the poor and low-income folks the most."
Anne Williams of the Central City Association said the sales tax proposal came as a surprise to her organization.
"We would have appreciated being a part of the discussion," Williams said. "We support maximizing revenues, but the process to be followed is just as important."
Douglas Arnsenault of the Valley Industry and Commerce Association urged the city to look at existing ways to bring in more revenue. He noted that pending proposals to change how the city hauls waste and to allow more digital billboards could bring in millions of dollars to the city.
"We are urging you to take a reasonable approach rather than ask for higher taxes," Arnsenault said.
A representative of a major city employees group embraced the proposal.
"We are encouraged that the City Council is contemplating revenue-raising measures that could put the city back on track," said Ian Thompson, spokesman for SEIU 721. "It makes sense for the city and keep public services intact."
Councilman Paul Koretz argued it made more sense to go for one general tax.
"It doesn't make sense for us to look at smaller taxes when we have a chance of passing one tax that will generate more revenue," Koretz said.
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