By Jack Humphreville, April 8, 2014
LA WATCHDOG-The City and the County are both considering ballot measures that, if approved by two-thirds of the voters, will raise our City’s sales tax to 10%, the highest rate in the nation.
This 10% sales tax will confirm to job creating employers that LA is a hostile work zone and that our fiscally irresponsible City Council has no respect for our wallets.
On March 17, the City announced that it was considering placing a measure on the November 2014 ballot that would raise our sales tax by a half a cent to 9½%, one of the highest rates in the country.
This tax increase is projected to raise $4.5 billion over the next 15 years. These funds will be used to repair our failed streets and cracked sidewalks that have been neglected over the past decade by the City Council in order to provide funds for increases in salaries, pensions, and benefits for our City’s workers.
On March 28, Move LA, the politically powerful transportation advocacy organization, unveiled its proposal to place on the November 2016 ballot a measure that will increase the County’s sales tax by half a cent.
The County’s tax hike is expected to raise $90 billion over the next 45 years. These funds will be used to expand rail transit (30%), to provide transit operating funds (20%), and to invest in the “Clean Highway System” (20%).
In addition, 15% of the haul will be returned to local governments for transportation related projects, resulting in a $5 billion windfall for the City of Los Angeles.
These funds would be in addition to those raised pursuant to Measure R (the Traffic Relief and Rail Expansion Ordinance), the 30 year, half cent increase in the County’s sales tax that was approved by more than two-thirds of the voters in November 2008.
There is no doubt that a 10% sales tax would have a devastating impact on the City’s already business unfriendly reputation and its economy, scaring away employers and much needed investment. But this is just more of the same old stuff in LA (SOS-LA) as a recent UCLA report indicated that our City has actually lost jobs over the last two decades while our population has increased by over 10%.
Before proceeding, the City and its voters need a better understanding of the County’s plans to fund its transportation needs, especially given that we approved Measure R in 2008. Otherwise, the already long odds of the City’s $4.5 billion Street Tax winning the approval of two-thirds of the City’s voters will be greatly diminished by the prospect of an additional bump in the sales tax in two years.
And this does not even take into consideration the multibillion Stormwater Tax that is being pushed by the County’s Flood Control District.
We should also be asking the candidates for County Supervisor about whether they support the City’s Street Tax and the proposed increase in the County’s sales tax.
The City’s Street Tax proposal also needs additional clarification, especially as it relates to the condition of our streets after 20 years since everyday maintenance is not part of the program and appears to be underfunded by almost $800 million.
But rather than proceed with a contentious ballot measure, the City should finance the 20 year, $4.5 billion Street Repair program with long term bonds serviced with the incremental proceeds from the 20% tax on incremental revenues from the Power System of our Department of Water and Power.
But this alternative that does not require a direct tax increase is not popular with the City Council who wants to divert the incremental funds from DWP to fund their pet projects and increases in salaries, pensions, and benefits for the City’s employees.
However, are City residents able to afford another $4.5 billion in taxes when they are facing an onslaught of new fees and taxes, ranging from their $1 billion share of the federal and state increases in transportation taxes; a 25%, $1 billion bump in our DWP rates over the next four years: untold billions to fund the County’s Stormwater Master Plan: and billions to pay for the unfunded pension liabilities of the City, County, and State?
But this is not a real concern for our fiscally irresponsible City Council. After all, it is all about them, not us, the poor slobs paying the bills for their misguided policies.
So ask yourself, do you trust the Herb Wesson lead City Council enough to approve a $4.5 billion, half cent increase in our sales tax to a job killing 9½%, one of the highest rates in the country, especially when there is another half cent increase just over the horizon?