Sat, Apr

Can LA Survive a 10% Sales Tax!


LA WATCHDOG--On June 23, the politicians on the Board of Directors of the Los Angeles County Metropolitan Transportation Board voted to place on the November ballot the “Los Angeles County Traffic Improvement Plan” which, if approved by two-thirds of the voters, will increase our sales tax by a half cent to 9½%, one of the highest rates in the country.  

The Supervisors also decided to make this a permanent increase, eliminating the 40 year time horizon that was an integral part of the previous proposal in March.  

This ballot measure will also make permanent the Measure R half cent tax increase that County voters approved in 2008, eliminating the 2039 sunset provision.  Interestingly, in 2012, the County’s voters did not approve extending this tax for another 30 years until 2069. 

If this measure is approved, it will increase Metro’s tax revenue over the next 40 years by $120 billion to an estimated $300 billion.  These funds will be used to subsidize Metro’s money losing operations, fund its pensions, and finance its very ambitious, debt fueled capital expenditure program that will burden future generations of Angelenos.    

But this appears to be just the beginning of our Enlighten Elite’s efforts to raise our taxes to astronomical levels. 

In all likelihood, once Janice Hahn (who never met a tax or rate increase she did not like) is elected to the Board, the Supervisors will approve placing on the ballot a quarter of cent increase in the sales tax to fund the County’s homeless initiatives.  

Of course, our Elected Elite will tell us that this new homeless tax will be offset by the expiration on December 31, 2016 of the quarter of a cent sales tax under the terms of Proposition 30 that was approved by 55% of California voters in November 2012. 

Our City is also on the sales tax bandwagon. 

In 2013, the Herb Wesson led City Council placed on the ballot Proposition A, a permanent half cent increase in our sales tax to finance City services.  Despite City Hall’s well-financed campaign and threats by Mayor Villaraigosa and Police Chief Charlie Beck to lay off cops, 55% of the voters rejected this tax increase.  

Interestingly, mayoral candidate Eric Garcetti opposed Proposition A because he said that Angelenos were already paying their fair share and could not afford another hit to their wallets.  Yet now, as Mayor and a member of the Metro Board, Eric is an enthusiastic backer of this new tax that will cost County taxpayers an estimated $850 million next year.    

In 2014, the City considered placing on the November ballot another half cent bump in the sales tax to finance the $4.5 billion plan to repair and maintain our lunar cratered streets.  But the Save Our Streets – LA proposal never made it to the ballot because City Hall realized that skeptical voters would have trashed this measure, especially after they were made privy to Controller Ron Galperin’s critical audit of the Department of Street Services. 

Garcetti and the Herb Wesson led City Council are cooking up numerous schemes to raise taxes so they can throw money at problems rather than figuring out how they can make the City operations more efficient.  

We are hearing chatter about the City’s infrastructure needs, ranging from streets and sidewalks to stormwater and urban runoff.    There are discussions about budget busting increases in the size of the City’s work force by hiring 5,000 new civilian employees.  And the City and the County need to address their unsustainable pension plans that have a combined unfunded pension liability of at least $70 billion (almost $10,000 for every Angeleno).   

With all of these “needs,” a 10% sales tax might be considered a bargain by our elected officials.   

Before we consider approving the Metro’s half cent increase in our sales tax, the City $1.2 billion bond issue for the homeless, and the County $100 million parcel tax for its parks, we must demand that the City and the County develop a long range operational and financial plan that outlines the total burden they want us to bear.  The City should also implement the recommendations of the LA 2020 Commission to implement multiyear budgeting, to establish an Office of Transparency and Accountability to oversee the City’s fragile finances, and to form a Commission on Retirement Security to develop information and solutions to our unsustainable pensions.  

Until then, these ballot measures deserve a NO vote. 

And this Note: These City and County tax proposals are in addition to the State ballot measures involving the issuance of $9 billion in school construction bonds, an additional $1 billion tax on cigarettes, and the 12 year extension of Proposition 30’s “temporary” multibillion dollar “soak the rich” income tax.  

(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee and a member of the Greater Wilshire Neighborhood Council.  Humphreville is the publisher of the Recycler Classifieds -- www.recycler.com. He can be reached at:  [email protected].)


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