Better Than Phone Tax

Leading up to Tuesday’s unanimous vote, some council members were not convinced there was an emergency. When the council voted October 3 to write up ballot language asking voters to back the replacement tax, councilmen Dennis Zine and Greig Smith voted against it. Had either one voted “no” on Tuesday, the tax would not have made the ballot. Zine, a former cop and one of only a handful of fiscal watchdogs on the council, said he dropped his opposition a few days before. “I told them if there was an emergency, demonstrate that, and they said they would.” It will cost the city more than $5 million to put the measure before voters, according to City Clerk Frank Martinez.

With the issue heading for the ballot, Jon Coupal, an attorney and president of the Howard Jarvis Taxpayers Association, said the group may sue. Coupal says while courts tend to defer to elected bodies when they declare an emergency, those bodies do not get a free pass.

“Words in statutes and words in the Constitution are usually accorded their normal, regular meaning, and the word ‘emergency’ generally connotes some kind of immediate crisis,” Coupal says. “I guess the issue we have is whether overspending and mismanagement are the kinds of things that would rise to the level of ‘emergency’ as that word is commonly understood by the normal Californian. I would think not.”

FROM THE ALARM Villaraigosa is displaying about losing the phone-tax money, City Hall observers might think this year’s courtroom defeat caught him by surprise. It didn’t. A judge first ruled that the wireless tax violated Proposition 218 in July 2005. Villaraigosa’s proposed budget for the 2007-’08 fiscal year ignored that nearly 2-year-old warning shot from the court, and assumed that the tax would continue to be collected.

On May 9, the appeals court upheld the 2005 ruling against the city. Yet 12 days later, the City Council passed a budget ignoring that second court ruling as well. The paperwork supporting Villaraigosa’s current-year budget, prepared by Sisson’s office, plainly states that the mayor chose not to create a budget that anticipated a defeat in court: “No adjustment is made for challenges facing collection of utility users’ tax on telephones.”

Szabo says Villaraigosa didn’t plan for the court defeats because he was committed to increasing the city’s reserve fund and reducing the city’s deficit.

Vosburgh says the citywide vote in February could backfire, turning into a referendum on mediocre city services in a time of rapidly increasing city spending. That might stoke the anger of residents who feel that tax hikes go toward lining the pockets of city workers and subsidizing big developers, rather than improving local services.

“There are certainly a lot of people in the public who feel we pay a great deal in city fees and services and .?.?. we’re getting so little in return,” Vosburgh said.

Of 149 California cities that have such a tax — many do not — only Culver City and Seal Beach, at 11 percent, have a higher tax rate than L.A.’s. But even if the tax is “reduced” to 9 percent, Angelenos would still pay more than residents of all but nine California cities.