fatigue

It’s tax season.

Not just the time when you pay your personal taxes, but also when political groups, labor unions and even elected officials propose new taxes — either for specific programs or to keep the overall budget in the black.

On Tuesday, City Administrative Officer Matt Szabo presented the City Council’s budget committee with several ideas for bringing in more money — some potentially for the June 2 ballot. He offered a half-cent sales tax hike and an increase in the tax on short-term vacation rentals. He proposed a higher tax on parking and a new levy on unlicensed marijuana dispensaries.

Jon Coupal, president of the Howard Jarvis Taxpayers Association, said Los Angeles needs to rein in its spending before bombarding voters with even more financial requests.

“Is there going to be tax or ballot fatigue? I think there very well could be,” Coupal added.

It’s a “crowded ballot,” Szabo admitted while presenting his options to the committee.

“We probably have to do a study about the number of measures we put on and how voters might respond to multiple measures,” said Melissa Krantz, who works for the city administrative officer, during the meeting.

Polls show Southern California voters may be souring on additional taxes.

Just outside the city of L.A., in Long Beach, a city-commissioned poll showed that 80% of residents said it was not the right time to raise taxes, even for city services.

Despite those hurdles, Szabo said, the city needs to consider new revenue streams for the general fund so that it can balance its budget year after year not only by making cuts.

“Traditional revenue sources that have supported the operating budget are eroding and/or being outpaced by expenditure obligations,” Szabo wrote in his proposal to the council. “The City must consider permanent options, and specifically new taxes, to increase the City’s General Fund Revenue.”

But the potentially council-backed tax proposals are not the only taxes in town.

There’s also the proposal from the firefighters union for a half-cent sales tax that would raise revenue specifically for the fire department. There’s a similar proposal for a sales tax that would fund city parks. Then there’s a countywide sales tax proposal to fund health care.

Separately, voters in November may have to consider an “Overpaid CEO Tax” in Los Angeles that the hotel workers union Unite Here Local 11 is gathering signatures for. Meanwhile, there’s the potential for a statewide, one-time tax on the wealth of California billionaires.

With city voters already likely to consider all these options on their November ballots, Szabo told the council his options could get on the June ballot, giving them a better chance to pass.

The committee quickly disposed of the half-cent increase to the city’s sales tax as an option. The funds from the increase, which would have totaled more than $300 million per year, would have gone directly into the city’s general fund, Szabo said.

But there is limited space for an increased sales tax in the city. The city’s sales tax is currently at 9.75%, lower than some neighboring cities. The maximum percentage the city can grow to is 10.75%, meaning Los Angeles still has 1% it can potentially increase the sales tax.

But the sales tax hike for the overall city budget could have ended up competing with the firefighter union half-cent sales tax increase proposal, which already has support from some councilmembers.

“The thing I hear most in my district is affordability and no new taxes,” said Katy Yaroslavsky, the chair of the Budget and Finance Committee.

Though Yaroslavsky said she liked the idea of new revenue for the general fund, she recommended the city not move forward with the sales tax recommendation.

Yaroslavsky and the committee moved forward with the three other proposals from the city administrative officer, which, together, could bring in more than $200 million per year through 2028. Those proposals will go before the full city council next week.

Szabo also encouraged the committee to study additional taxes on ride shares, meal deliveries, major event tickets and vacant properties — possibly for the November ballot.

The proposals that did move forward Tuesday also face pushback from business groups.

Parking lot owners are opposing the potential ballot measure to increase the parking occupancy tax by 50% — from 10% to 15%. The tax is imposed on anyone who uses a parking lot in the city.

The Los Angeles Parking Association said the measure would hurt consumers and the city’s economy. The group called on the city to collect the current tax from parking lot scofflaws.

The hotel and short-term rental industry, meanwhile, opposed the potential 4% increase in the transient occupancy tax that Szabo put forward.

“This proposal creates a cost spiral. As fees stack up, Los Angeles risks becoming the most expensive option in a competitive market,” wrote Laura Lee Blake, the president and CEO of the Asian American Hotel Owners Association, in a letter to the council.

State of play

— HIGHER HIRES: On Wednesday, the council finally approved the hiring of up to 410 officers after hearing back from the city administrative officer that the money used to fund the positions this year will come from the LAPD’s budget.

The hiring of the officers, which will bring the police force to around 8,555 by the end of the fiscal year, delivers a modest victory to Bass, who promised she would find the money for additional police hires when she signed the budget in June.

— FIRE PR: The Los Angeles Fire Department Foundation paid for a celebrity public relations firm that has represented Reese Witherspoon and Charlize Theron to help LAFD leaders shape their messaging after the Palisades fire. Fire Chief Jaime Moore said he met with the Lede Company, but did not know exactly what work it had done for the department.

— BEUTNER DEATH: The daughter of Los Angeles mayoral candidate Austin Beutner died earlier this month, and authorities have not yet determined the cause. Emily Beutner, 22, died at a hospital on Jan. 6, according to information posted on the Los Angeles County Medical Examiner’s website. “My family has experienced the unimaginable loss of our beloved daughter. We ask for privacy and your prayers at this time,” Beutner said Wednesday in a statement to The Times.

— 25% OFF 405: Metro’s board of directors approved an underground heavy-rail option for the Sepulveda Transit Corridor project on Thursday, with some saying the project could take a quarter of the commuters off the 405 Freeway. The rail corridor would connect the Westside and the San Fernando Valley.

— GOV v. PRES: Gov. Gavin Newsom accused the Trump administration of authoritarianism, saying his appearance at a World Economic Forum event was canceled to suppress his dissent on the global stage. “Is it surprising the Trump administration didn’t like my commentary and wanted to make sure that I was not allowed to speak? No,” said Newsom, who is weighing a 2028 presidential run. “It’s consistent with this administration and their authoritarian tendencies.”

— SEX ABUSE SCANDAL: The State Bar of California is investigating Downtown LA Law Group, which represents thousands of victims in the country’s largest sex abuse settlement. The investigation follows reporting by The Times on allegations that some of the firm’s plaintiffs were paid to sue, including some who said they made up their claims.

QUICK HITS

• Where is Inside Safe? The mayor’s signature program housed more than 30 Angelenos throughout the city this week, visiting Hollywood, South Los Angeles and the San Fernando Valley, according to the Mayor’s Office.
• On the docket next week: The City Council on Tuesday will take up a motion from Councilmember Nithya Raman that could change Measure ULA in an effort to spur housing production.

Stay in touch

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