A Long-Unsought Benefit
Photo by Ted Soqui
Maybe its because the rest of this fair state doesnt always have its largest citys interests at heart. But almost any time the Legislature proposes a law exclusively affecting Los Angeles, its a rotten deal.
Two years ago, for instance, Sacramento proposed to ease the law on the breakup of cities but only in Los Angeles. Once the legislation was rewired to let any California city split, lawmakers lost interest. If it doesnt just stick it to LaLaLand, why bother?
Now a similarly focused law crawls through the Assembly. AB 83 applies only to Los Angeles County, and in theory, I should want it, since it purports to benefit those who write at home. But the Legislatures analysts were critical of it. So am I.
Yes, its our old friend, the home-business city-tax protection bill, again. The latest version of Assemblyman Tony Cardenas law has been slimmed down from 1998s attempt, which, you may recall, tried to protect a wide inventory of "low impact" at-home businesses from municipal imposts. But since it would have applied statewide, it incurred statewide opposition. Opponents objected that the bill might unduly encourage accountants, lawyers, C-programmers, masseuses, even blacksmiths, to wield their humble trades from their spare bedrooms in order to avoid city business taxes.
As a result we have a new bill that only protects "any writer, musician, director or other creative artist" from paying city taxes on any work done at home. But only in this county. Which is strange. Is Sacramento saying that this is where all artistic Californians live? If so, why have I never met a San Franciscan who wasnt a self-declared creative genius?
According to a Cardenas spokesman who asked not to be named, the bills narrowed language reflected "recent reports of movie production going to Canada." A legislative insider, however, also not speaking for attribution, said the narrowing was "what it took to get the bill out of committee." In other words, no one wanted it to apply anywhere but here in Los Angeles. In the home-based screenwriting community (and someone please do tell me what work directors do at home), Cardenas bill is ballyhooed as protecting scribes from city fiscal intrusion upon the productive imagination. According to the City Controllers Office, however, city taxes amount to under a half of 1 percent of gross income (or $125 per year for a writer earning $25,000). Potential taxes to be raised from these "creative artists" are estimated at about $5 million a year for the city.
The real burdens, of course, for us creative at-home laborers are those state and federal income taxes. So if Sacramentos sympathetic legislators really feel for us downtrodden L.A. scribes, why dont they ratchet back their own state franchise tax for our benefit? And save us some real money?
Would that be fair? Probably not. The real question is, why should any one professional class however highly we might think of ourselves be offered any tax break that other people who work as hard or harder whether at home or in an office or a foundry dont get. Its the question that Assemblyman Cardenas, in his latest legislation, fails to answer.
Alas, poor Community Redevelopment Agency. Once it was the bogeyperson of reformers, the alleged underminer of Los Angeles downtown and less famously the broker of the city centers best low-income housing. Now the CRAs 200-odd personnel huddle in their tightly guarded Spring Street revetments high in the gloriously ornate old Banco Popular, wondering what their future holds. While their downtown projects are done (if not paid for), new, outlying projects are under way (if not fully funded).
Far more to the point, the CRA operating budgets been hanging in limbo since at least last October. Its board has consistently failed to submit a budget to the City Council. By last week, it suddenly looked as if many CRA-niks would be out of a job, simply because there would be no money left to pay them after June 30.
Now, that wasnt good for those unlucky employees, surely. But it may have been semi-intended by the mayor-appointed CRA board of directors, who let things get to this state. That boards majority, facing a yawning shortfall, seemed to have been in an "if we cant pay these guys, theyre out of here" state of mind. It apparently took David Cochran of the American Federation of State, County and Municipal Employees Council 8 to note that simply not paying workers was no way to downsize. He pointed this out at a joint CRACity Council meeting last week. This realization seemed to be a sudden embarrassment for the CRA board, and for the City Council, which had to vote to fund a two-month funding stopgap to pay the spavined development agencys staff until September. What happens then, no one seems to know.
So this particular meeting turned into an archetypal bureaucratic blamestorming session with CRA board chair Peggy Moore mostly blaming the staff that she could not pay in full.
The staff knew of the budget crisis and the need to cut staff, she said. Theyd been to retreats on this subject, and then theyd got the memos. And then Moore told us this amazing thing: This same CRA staff had, over the past eight months, been ordered to compile programs for its own attrition. Moore claimed she had no idea as to why it repeatedly failed to do so.
I wondered if Id heard her right. Lets see. The CRA board orders employees to decide who among them must be fired. Then its head feigns surprise that they didnt come up with any names. Why didnt she simply and flatly ask all redundant or incompetent CRA staffers to quit?
Actually, with two major CRA projects (Hollywood and North Hollywood) well under way and a third (East Los Angeles) almost ready to go, the CRA staff is now spread very thin. Cochran says there are only two civil engineers left on staff to handle the very considerable oversight work that remains on the Hollywood and NoHo projects.
Despite these ongoing projects, Coch ran said, "There are no long-term plans for the agency." He noted that the council keeps authorizing CRA enterprises for which there is no funding; he called this "a budget shell game." This budgetary boondoggle was reportedly a key factor in this weeks sudden retirement of CRA director John E. Molloy four days after the meeting.
But by now, the CRAs unwinding budget tragedy is an old story: In 1995, a judgment in a suit by former Council Member Ernie Bernardi cut most of the CRAs access to the downtown property taxes that fueled its glory years; the tax share it still manages to collect mostly goes to pay its hefty debts. Furthermore, as the Controllers Office has repeatedly shown, the CRA is bad at collecting its own outstanding obligations, which include many defaulted community-development loans.
Further, about the time the Bernardi judgment went down, Mayor Richard Riordan decided to abstract more than $80 million from the CRA to plug his overall city budget. No wonder the appointees of the mayor whos sometimes seemed to favor a new redevelopment process have been acting as though the CRA embarrassment could be wafted away by budgetary legerdemain.
But thats wishful thinking. Recent studies suggest that the City Council, for all its inherent problems, might do a better job of running the CRA than the current board of mayoral appointees. For starters, the council, at least, represents all the citys regions.
And its at least shown that it knows how to meet an annual payroll. If Dick Rior dan hasnt been able to make the CRA run better in six years of trying, maybe its the councils turn.
Something for Nothing
Last week I thought that Los Angeles Countys new Living Wage Lite law was about as bad as it could get. Youll recall that the ordinance fails to protect part-timers the work forces fastest-growing segment. And also lacks an effective worker-retention measure. Upsetting enough.
But later, the ordinance was diluted even further by one of its opponents, Supervisor Don Knabe. Just after last weeks vote on the matter, Knabe managed to propose a provision that would mitigate its effectiveness even further: this by making the law inapplicable to businesses with 20 or fewer full-time employees earning under a million dollars annually; or, "if the business is a technical or professional service," $2.5 million.
What was amazing was the politics of this further omission: Knabe offered the amendment; the three liberals on the five-person board voted to accept it. But he had just voted against the entire package. So what did the majority get in return? Repeated attempts to secure a comment from the usually accessible Supervisor Zev Yaroslavsky were unsuccessful.
Thus, the liberal majority agreed to dilute the already pale ordinance for the sake of someone whod voted against it. Hey, any of you supervisors know how to play this game? Apart from Knabe, of course. Who played Supervisors Gloria Molina, Zev Yaroslavsky and Yvonne Burke for chumps.
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