In the 2013 Mayoral race, Candidate Eric Garcetti opposed Proposition A, the permanent half cent increase in our sales tax that would have raised our already regressive sales tax to a staggering 9½%, one of the highest rates in the country.
According to Garcetti at the time, hard-working Angelenos were already burdened by a high sales tax and that “we need to have an emphasis on growing our economy. We can’t tax our way out of this.”
Yet today, Mayor Garcetti is the leading proponent of the Metropolitan Transportation Authority’s full court press to increase our sales tax by a half cent to the same staggering 9½% that he once opposed. This new permanent tax will hit us up for $850 million a year and will help finance Metro’s money loosing operations and its very aggressive, debt fueled construction budget. At the same time, Metro, a large bureaucratic enterprise, is not known for its efficiency, transparency, or accountability.
If this ballot measure (Measure M – The Los Angeles County Traffic Improvement Plan) is approved by two thirds of the voters, Metro will be the beneficiary of a permanent 2% sales tax, resulting in tax revenue of over $3.5 billion a year. This is equal to $350 for each of the County’s 10 million residents and over $1,000 for each the County’s 3 million households.
Garcetti is also a major proponent of the $1.2 billion bond ballot measure (Proposition HHH – Homeless Reduction and Prevention, Housing and Facilities General Obligation Bond) that will help finance the $3 to $4 billion needed to build supportive housing for our homeless population. This will require an average increase in our property taxes of $65 million a year for the next 30 years, a total, including interest, of almost $2 billion.
While the Mayor and the members of the City Council say that helping the homeless is a top priority, they have neglected to allocate any money in the budget to address this problem. Yet, during the first four years of the Garcetti administration, budget revenues increased by over $1 billion and are anticipated to grow by another $600 million over the next four years.
In reality, the $65 million annual tab, representing less than 4% of the $1.6 billion increase in the budget, is being devoured by growing pension contributions that are required to service the City’s $15 billion unfunded pension liability. But this is a problem that Mayor Garcetti and the Herb Wesson led City Council have refused to address for fear of antagonizing the campaign funding leaders of the City’s unions.
Mayor Garcetti is also supportive of the Supervisor Mark Ridley-Thomas’ efforts to increase our sales tax by another quarter of a cent. This would raise $350 million a year to help the County fund its services to the homeless community.
Including the $150 million in new taxes associated with the $1 billion bump in our water and power rates, Angelenos will be soaked for almost $700 million in new taxes. This is the equivalent of a hefty 13% increase in our property taxes or an increase in our sales tax to a whopping 10.2%.
And this does not include the potential new taxes to fund the City’s $4.5 billion repair of our streets and sidewalks, the County’s $20 billion stormwater plan, and the Community College District’s $3.3 billion bond measure.
Nor does it include the State’s efforts to increase the gas tax ($3 billion a year), expand the sales tax to include services ($10 billion a year), and to impose higher “soak the rich” income taxes ($7 billion). At the same time, state revenues have ballooned by $50 billion (42%) over the last five years.
As part of his Back to Basics agenda, Garcetti pledged the City would “live within its financial means.” However, despite a projected $1.6 billion, 35% increase in General Fund revenues from July 1, 2013 to June 30, 2021, our City still has a Structural Deficit of about $100 million a year as a result of generous bumps in salaries and benefits for the City’s poorly managed employees.
But Garcetti has done nothing to follow up on the excellent recommendation of the LA 2020 Commission to establish an Office of Transparency and Accountability to oversee the City’s budget and finances. Nor has he followed up on the Commission’s suggestion to review and analyze the City’s seriously underfunded pension plans that are devouring our children’s future. Nor has he followed up on implementing multiyear budgeting, a common practice of many well run municipalities.
Back to Basics also included a provision to repair and maintain our streets. But to date, there is no plan to fix our lunar crater streets despite Local Return revenues from the Metro sales tax that are projected to produce $20 billion over the next 30 years.
The “smooth on the podium” Garcetti has flip flopped on taxes and has failed to deliver on his budget and infrastructure promises. And now he expects us to back the $850 million increase in our sales tax and the $1.2 billion homeless / pension bond.
No way. Garcetti and the Herb Wesson led City Council need to clean up their act if they want our votes.
Vote NO on Measure M, the permanent half cent increase in our sales tax, and NO on Proposition HHH, the $1.2 billion homeless/ pension bond.
Cross-posted at City Watch LA.