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LA Mayor’s On-Again, Off-Again Relationship with Business

BUSINESS (UN)FRIENDLY LA? - October was a good month for the sometimes troubled relationship between Los Angeles Mayor Antonio Villaraigosa and the business community.

It was a month where Mayor Villaraigosa proposed permanently extending the three-year old Business Tax Holiday. He created the Los Angeles Regional Export Council, a public-private partnership, to coordinate export services in the Los Angeles region. He announced a trade mission to Asia, and he held a town hall discussing a five-part plan to improve the business environment in Los Angeles.

October was quite the month. But what about August?

In August, Mayor Villaraigosa told the Sacramento Press Club that, “Prop. 13 was never intended to be a corporate tax give-away, but that is what it has become … Let’s apply Prop. 13′s protections to homeowners and homeowners alone.”

His proposal, which is known as ‘Split-Roll,’ would bifurcate tax protections for business properties from residential properties. In essence, it would amount to a tax increase on businesses to fund government programs across the state.

But then why would he ask for a permanent cut to his city’s business taxes? He described that business tax giveaway as “a proven tool for bringing businesses to Los Angeles and generating jobs,” said Mayor Villaraigosa.

The tax holiday, which he helped implement in 2010, provides a three-year moratorium on the city’s gross-receipt business tax, which ranks among the highest business taxes in the region and has been cited as a disincentive for businesses to move or open in Los Angeles. Providing permanent protections from the tax is intended to generate a continual boost to the local economy by encouraging job creators to invest.

He also announced a trade mission to Asia and launched the Los Angeles Regional Export Council. With both the Council and the trade mission, Mayor Villaraigosa hopes to open markets in the East to Los Angeles businesses, while inviting investment from other countries into the area.

His last trip to Asia came in 2006. This time, he will spend 11 days in China, South Korea, and Japan, demonstrating goods and services made in Los Angeles, and meeting with officials and businesses to pitch increased investment in Los Angeles.

According to a statement issued by the Mayor’s office, $1 billion in exports creates 5,500 jobs.
Overseas investment and market access would be complemented by boosting Los Angeles-based and operated businesses. Mayor Villaraigosa and Los Angeles have often been at the forefront of local contract and hiring ordinances and have implemented various programs to aid local businesses.

One such ordinance was recently adopted, which would give an 8% competitive advantage to local businesses. Last year, the City of Los Angeles spent nearly $2.4 billion on contracts. By directing more of these contracts to city employers, Mayor Villaraigosa’s isn’t waiting for Washington to help people return to work.

“The Local Preference Ordinance uses our own purchasing power to put people back to work,” said Mayor Villaraigosa. “This job-creating measure helps level the playing field, making it possible for local businesses to compete more effectively for City contracts.”

Any jobs created from the local preference ordinance would be only a portion of the total number of jobs Mayor Villaraigosa hopes to create with his business and job creation strategy. The five part strategy calls for reforming LA’s business tax, reducing red tape, partnering with local businesses, modernizing LAX and the Port of Los Angeles, and building a 21st century rail network.

So what’s happening with the Mayor and the business community? It seems that August was marred with its lovers’ quarrel and October was the peace offering, dozen roses.

Whatever the case, the Mayor’s October agenda was an activist example of local government backing business, jobs, growth, and recovery.

(Dan Oney is the Editor of where this article was first posted.) -cw

Tags: Mayor Villaraigosa, business, business community, Business Tax Holiday, Prop 13, jobs, China, South Korea

Vol 9 Issue 89
Pub: Nov 8, 2011