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LA WATCHDOG - The City Council is considering placing three measures on the June primary ballot that would, if approved by a majority of voters, increase the Transient Occupancy Tax (hotel and short term rentals) and the Parking Occupancy Tax and establish the Olympic Ticket Tax.
There would not, however, be any ballot measures that would reform the City’s dysfunctional budget process that would require the City to eliminate the Structural Deficit that is expected to be more than $600 million over the next four years when adjusted for future labor agreements.
The Transient Occupancy Tax would be increased from 14% to 16% and is expected to raise an additional $55 million, bumping the total haul of the TOT from $315 million this year to $370 million. There are other changes involving online travel companies, various hotel charges, and online home-sharing platforms. The proceeds are deposited in the General Fund, to be used in a manner decided by the Council and the Mayor.
The Parking Occupancy Tax would be increased from 10% to 15% and is expected to raise an additional $70 million, bumping the total haul of the POT from $140 million this year to $210 million. Again, the proceeds are deposited in the General Fund.
The proposed Olympic Ticket Tax of 6% is estimated to generate around $100 million in one-time revenue in 2018 from events held within the City. The proceeds are deposited in the General Fund.
Without doubt, our elected elite, special interests, and union bosses will use a full court press to convince us to approve these tax increases, stating that they are necessary for the City to provide essential services to Angelenos, including public safety, the repair and maintenance of our infrastructure, and services to the homeless. But we will not see any ballot measures calling for meaningful reform of the existing budget process and financial policies that have resulted in the annual budget crises and Structural Deficit.
The Charter Reform Commission will not submit its budget related recommendations to the City Council and Mayor until the end of March, two months past the January 28 deadline to be on the June ballot. In addition, the voters will not have the opportunity to review any ballot measures calling for budget and financial reform until June 17, two weeks after the June 3rd primary vote, the deadline to place measures on the November ballot.
We cannot count on the politically appointed Charter Reform Commission, the City Council, and the Mayor to endorse real reform. Until they do, we should vote NO on the three ballot measures.
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The City is also considering other tax increases. These include a Vacancy Tax that is expected to yield $45 million, a Transportation Network Tax ($200 million), and Retail Delivery Tax ($150-$200 million). The union representing the City’s firefighters is expected to propose a ballot measure that would increase our sales tax by half a cent to 10¼% ($400-500 million). The City is also considering two bond measures to construct and renovate firehouses and to repair our streets and sidewalks. There may be additional measures placed on the ballot by LAUSD, the County, or the State.
(Jack Humphreville writes the LA Watchdog column for CityWatch, where he covers city finances, utilities, and accountability at City Hall. He is President of the DWP Advocacy Committee, serves as the Budget and DWP representative for the Greater Wilshire Neighborhood Council, and is a longtime Neighborhood Council Budget Advocate. With a sharp focus on fiscal responsibility and transparency, Jack brings an informed and independent voice to Los Angeles civic affairs. He can be reached at [email protected].)
