LA Times: No on Proposition A, the Job Killer Sales Tax

Jack Humphreville
LA Watchdog writer for CityWatch, President of the DWP Advocacy Committee, Ratepayer Advocate for the Greater Wilshire Neighborhood Council, and Publisher of the Recycler

On Wednesday, the Los Angeles Times urged a NO vote on Proposition A, the PERMANENT half cent increase in our already regressive sales to a staggering 9 ½%, one of the highest rates in the country.

While The Times conceded that there might be some “short term pain” if Proposition A is defeated, the Editorial Board recommended that any increase be determined by the new Mayor and the City Council which will have seven new members, and only after completing the upcoming labor negotiations with the City’s labor unions. 

Any increase in the sales should also be part of a “long-term budget fix.”

On the other hand, both Mayor Villaraigosa and the Service Employees International Union have now voiced support of the increases in the sales tax.

Of course, this is no surprise.  When have you ever known the Mayor and the SEIU to be against a tax hike that feathers their own nests?

However, in the case of our visionary mayor, he ditched his November demand that the City enter into public private partnerships for the Zoo and the Convention Center despite substantial savings for our cash starved City and millions in additional revenue because of better management – no doubt because of significant pressure from the leadership of the City’s civilian unions.

As for the SEIU, despite their previous posturing in opposing this regressive tax increase, its self-serving leaders now have no problem with slamming lower and middle income families to finance substantial raises for their already very well compensated members.

But the most interesting development of the week is the statement by Matt Szabo, a former Villaraigosa deputy in charge of the budget and now a very well qualified candidate to succeed Eric Garcetti, that the budget deficit of $216 million may be “overstated for the purpose of passing the sales tax.”

According to “City at a Crossroads,” the February 7 report by Miguel Santana, the City Administrative Officer, next year’s pension payments will be $45 million less than projected and revenues will be $70 to $80 million more than anticipated.

The remaining $100 million deficit can eliminated through public private partnerships for the Zoo, the Convention Center, Animal Services, the golf courses, and the operation (not the sale) of the City’s parking facilities, and by requiring modest contributions by the 70% of the City employees who pay nothing for their very generous healthcare benefits.

However, Paul Krekorian, the chair of the Budget and Finance Committee of the City Council, described plans to balance the budget without a sales tax increase as “pure nonsense.”

What is pure nonsense is the sleazy way that Proposition A was placed on the ballot in less than 10 days without any hearings of the Budget and Finance Committee.

What is pure nonsense is that the Budget and Finance Committee and the City Council did not take any input from the Neighborhood Councils and the public.

What is pure nonsense is that the City is now telling us that the more than tripling of our trash tax to pay for 10,000 cops is not enough.

What is pure nonsense is that a temporary tax increase would have had a significantly greater chance of voter approval.

What is pure nonsense is that we do not need a PERMANENT tax increase to solve a temporary problem.

What is pure nonsense is this half cent increase to 9½% is very regressive, especially in the City of Los Angeles where the average per capita income is $28,000 a year compared to the average City salary of over $82,000, and this does not include phenomenally generous benefits.

What is pure nonsense is that the City Council did not consider the negative impact of this half cent increase in the sales tax to an unbelievable 9½% on retail sales, its already business unfriendly reputation, and on investment that leads to more well-paying middle class jobs.

What is pure nonsense is that the $200 million tax increase does not even begin to cover the $768 million increase in salaries, benefits, and pension contributions over the next four years.

What is pure nonsense is that the City has not implemented any meaningful budget, pension, or work place reform, despite bogus claims to the contrary.

What is pure nonsense is that this tax increase finances only a portion of the 35% increase in salaries that were a payoff to the campaign funding union leadership.

What is pure nonsense is that the Mayor and the City Council are trying to extort us by threatening our public safety when the budget could be balanced without layoffs.

What is pure nonsense is that the City would increase our taxes before they have a new contract with its very aggressive unions.

What is pure nonsense is that the City with its $7.2 billion budget does not engage in strategic planning.

And what is pure nonsense is that the City Council is not willing to place charter amendment on the ballot that requires the City to LIVE WITHIN ITS MEANS.

What does make sense is the final paragraph of the editorial where The Times urges a NO vote on Proposition A.

City Council President Herb Wesson and CAO Miguel Santana “may be right that defeating Proposition A would lead to short-term pain. Indeed, the new city leadership [a new mayor and seven new Council Members] may ultimately find that higher sales taxes are a necessary part of the long-term budget fix. But they should have the chance to make that call – after getting through the coming contract negotiations – because the city’s structural budget problems will soon be theirs to solve.”

On March 5, it makes sense to Vote NO on Proposition A, the half cent increase in our already regressive sales tax to a job killer 9½%, one of the highest rates in the country.

Crossposted on City Watch

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