01 Feb 2013
- Written by Jack Humphreville
LA WATCHDOG - City Council President Herb Wesson hopes to raise $2 million from the special interests that roam the bowels of City Hall to finance an ad blitz supporting the PERMANENT half cent increase in our sales tax to a job crippling 9.5%, one of the highest rates in the country.
But how much will this $2 million cost us? And how much do the special interests stand to gain?
Billions! Yes, BILLIONS.
At the request of Police Chief Beck, Anschutz Entertainment Group forked over $100,000 to the “Committee to Protect Public Safety, Yes on A, a Coalition of Business and Community Leaders.” Yet between favorable financing terms to replace part of the Convention Center, the value of Farmers Field, the profits associated with a new NFL franchise, and the spillover effect on LA Live, the value of AEG’s holdings will increase by at least $1 billion.
This represents a 10,000 to 1 return on its $100,000 “investment” in Herb’s Special Tax.
JH Snyder, a big time real estate developer, ponied up $25,000. It just so happens that Snyder’s $175 million project on a two acre lot at the corner of Wilshire and Vermont in Wesson’s Council District will benefit from a $17.5 million low cost Housing and Urban Development Section 108 loan arranged by the City.
This represents a return of only 700 to 1 on its $25,000 “investment” in Herb’s Special Tax.
However, this does do not include the tens of millions in value as a result of the zoning enhancements that permitted two mixed use high rise towers of 17 and 22 stories that dwarf the other buildings in the neighborhood.
(Note: This HUD Section 108 loan is very similar to the controversial $2.6 million loan used to finance the leveraged buyout of Harold & Belle’s Creole Restaurant, a popular watering hole in Herb Wesson’s Council District.)
The California Association of Realtors contributed $10,000 in return for Herb Wesson deep sixing the doubling of the Documentary Transfer Tax that would have raised the City an additional $100 million in revenue.
The return on this investment in Herb’s Special Tax is another 10,000 to 1 return.
As part of his efforts to promote the sales tax, the Realtors high priced lobbyist concocted a statistically unreliable (read bogus) poll that showed voters would easily approve the higher sales tax and reject the increase in the Documentary Transfer Tax.
However, this so called poll ran counter to a Loyola Marymount survey that indicated that voters were more supportive of a major overhaul of the City’s pension system than in increasing the sales tax.
But it gets better.
This ethically challenged lobbyist, who, along with Herb Wesson, orchestrated the permanent half cent increase onto the ballot in less than two weeks without any hearings, is now working for the Yes on A campaign, a classic double dip, hauling in huge fees, all at the expense of hard working Angelenos.
As of January 19, the Yes on A cabal had raised $185,000.
However, other self serving City Hall cronies are expected to invest in Herb’s Special Tax. Investors would obviously include the parking lot operators and the hotel industry that were originally targeted for higher taxes.
We might also expect investments from other real estate developers, City contractors, the legal community, and, of course, public labor unions and their supporters that rely on the City’s largesse.
But this is a vicious circle where the $200 million of increased revenue from the permanent increase in the sales tax goes to finance only a portion of next year’s $300 million increase in personal expenditures.
And after a few years, as new labor contracts call for higher levels of compensation (and possibly more restrictive work rules if that is possible) that exceed the growth in revenue, as pension returns are lower than the overly optimistic investment rate assumption of 7.75%, and as our streets and sidewalks deteriorate even further, City Hall and the campaign funding unions will be looking for even more of our hard earned money.
Now is the time to stop this nonsense by voting NO on Proposition A, Herb’s Special Tax that was rushed to the ballot in less than two weeks without any public input, sending a message to our Elected Elite that we demand budget and pension reform where the City is required to LIVE WITHIN ITS MEANS.
(Note: Chief Charlie Beck is a non elected City employee who is not permitted to engage in campaign activities in his official role, on City premises, or on company time. Is his solicitation of a contribution from AEG an ethics violation? By the way, are Chief Beck and Fire Chief Brian Cummings voters in the City of Los Angeles?)
Vol 11 Issue 10
Pub: Feb 1, 2013