Tue, May

The Fix Is In: An Unnecessary $7 Billion Tax to Repair LA's Streets and Sidewalks


LA WATCHDOG-Over the last decade, one of the ways our fiscally foolish City Council financed the $1.5 billion increase in salaries, benefits, and pension contributions was by shortchanging our streets and sidewalks.  So today, our streets are the worst in the nation and over 40% of our sidewalks are in a dangerous state of disrepair. 

To remedy this problem, the City Council is considering issuing $4.5 billion in bonds, of which $3 billion will be used to repair the one-third of our streets that are in a failed or near failed condition.  The remaining $1.5 billion will be allocated to restore 4,600 miles of busted sidewalks. 

To service these bonds, the City is considering a 30 year, $7 billion tax.  This “revenue enhancement” will increase our property taxes by up to $400 million, a 10% bump, and will average $230 million over the next 30 years. 

But a new tax is not necessary. 

In conjunction with our Department of Water and Power’s anticipated $1 billion, four year rate hike, the City expects to extract an extra $200 million a year from Ratepayers by 2018 through increases in the 8% Transfer Fee/Tax and the 10% City Utility Tax.  

This is more than enough to service the interest and principal repayments on the $4.5 billion of bonds. 

The City is also projecting an additional $500 to $600 million in budget revenues over the next five years, excluding any increases in DWP related taxes.  These conservative revenue projections are also more than enough to service the $4.5 billion bond offering. 

However, as was the case with Proposition A, the permanent half cent increase in our sales tax that was rejected by the voters in March of 2013, the Herb Wesson led City Council, the campaign funding unions, real estate developers, construction magnates, self serving lobbyists, and the rest of the Downtown LA establishment will be in our faces, supporting this massive tax increase, holding our streets and sidewalks hostage to their exorbitant ransom demands. 

In reality, since all the money goes into the same pot, this ill conceived tax increase will be used to finance union demands for higher salaries and more restrictive work rules; sweetheart real estate deals for the likes of AEG, the $64 billion Westfield Group, and Millennium Hollywood; numerous $1 a year leases for campaign contributors; the unilateral phase out of the Gross Receipts Business Tax; and other below the radar screen pet projects. 

Before proceeding with any bond offering, the City must also develop a comprehensive plan that addresses the management and independent oversight of all of our 6,500 miles of centerline streets, 800 miles of alleys, and 10,750 miles of sidewalks with the goal that they will be in good to excellent condition not only within 10 years, but for succeeding generations of Angelenos. 

The voters of Los Angeles will more than likely approve a $4.5 billion bond measure to fund the comprehensive repair of our streets, alleys, and sidewalks.  

But if this bond measure is accompanied by a $7 billion tax increase that requires a two-thirds approval, these same voters who were lied to by Police Chief Beck, Budget and Finance Chair Paul Krekorian, and City Council President Herb Wesson during the failed campaign for Proposition A will reject this ill conceived tax.   

The reason is very simple.  The voters do not trust City Hall.  


 (Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee,  The Ratepayer Advocate for the Greater Wilshire Neighborhood Council, and a Neighborhood Council Budget Advocate. Humphreville is the publisher of the Recycler Classifieds -- www.recycler.com. He can be reached at:  [email protected]. Hear Jack every Tuesday morning at 6:20 on McIntyre in the Morning, KABC Radio 790.) 






Vol 12 Issue 14

Pub: Feb 18, 2014




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