L.A. Sales Tax Hike: Will $211 Million Increase Fix City's Problems?
ILLUSTRATION BY FRED HARPERL.A. City Council president Herb Wesson
When Herb Wesson was anointed by his colleagues as L.A. City Council president, he was known as the goofy former California Speaker of the Assembly behind "pet adoption Fridays," a sort of cross between open-mic night and a QVC sales pitch, where the pint-sized Wesson would crack jokes and implore Angelenos to adopt a dog or cat.
But Wesson, chief proponent of Proposition A, has proved to be a shrewd operator. What he lacked in his predecessor Eric Garcetti's subtlety, he's made up for in ruthless efficiency.
One of his first acts as council president was to strip the only other two black council members, Jan Perry and Bernard Parks, of choice committee assignments. Their apparent crime: They didn't attend Wesson's coronation, a 13-0 vote by the City Council followed by an enormous buffet with a roasted pig.
But that was inside-baseball stuff.
Wesson then quietly engineered a "redistricting" process affecting nearly 4 million L.A. residents, slashing long-standing voting-district boundaries so that Parks lost the heart of his City Council district, Leimert Park, to Wesson and Perry lost the heart of her downtown district to Wesson ally Jose Huizar.
That led Perry to sarcastically comment to Wesson: "Here we are at the end of this process, and for me, I feel your wrath. I feel your power."
Wesson denied he engineered the ugly gerrymanders, insisting it was clean and independent. But a tape surfaced of Wesson telling the L.A. Baptist Ministers Conference, like some Bond villain, that his backroom role was key: "I did the best I could to retain 'assets' for all of the districts. One person. Alone. Every member came to me to discuss what they wanted. ... "
Wesson's biggest power play yet goes before voters March 5, in the form of Proposition A.
He wants L.A. voters to raise the city sales tax on themselves by one-half percent, bringing it to 9.5 percent — among the highest in California, equaling Culver City and Santa Monica.
Wesson, Mayor Antonio Villaraigosa and top city budget adviser Miguel Santana say this would raise $211 million a year, nearly closing what they insist is a $216 million deficit in the coming fiscal year.
Never mind the fact that Californians just approved Proposition 30's one-quarter percent sales tax hike. Never mind that the City Council has hiked L.A. parking tickets six times in seven years (now squeezing $150 million annually from residents).
Or that the City Council in 2012 raised DWP rates 11 percent over two years, a hidden tax that creates millions in surplus dollars, which DWP transfers to L.A.'s general fund — controlled by the City Council.
Or that voters in 2008 passed a 9 percent "cellphone tax," Proposition S, raising some $243 million a year — on Villaraigosa's promise that the revenue would pay for extra cops. Then-Controller Laura Chick warned that the proposition's fine print actually sent those riches to the general fund, and three months later a unanimous City Council and Villaraigosa hiked trash, parking and other fees by $98 million — citing a need to hire cops.
And never mind that the City Council and Villaraigosa in 2006 hiked trash fees — saying they had to in order to hire more cops — then spent two-thirds of it not on hiring but on other LAPD expenses.
Jack Humphreville, probably L.A.'s most visible budget critic, who's fought overreaches by City Hall and DWP, is irate.
"Now they want to hit us up for $200 million when they've really fucked up for the last five years," Humphreville says. "Could they use the money? Have you ever met a politician who couldn't?"
Unlike most taxes, which need 55 percent to 66.6 percent voter approval, this tax needs just 50 percent. So Wesson and his allies are employing a simple strategy: threatening to fire 500 cops from the 13,000-person LAPD (10,000 are sworn personnel).
"We've cut everything we could think of," a seemingly forlorn Councilman Paul Koretz said at a press conference. "We are devastated. We've cut fire companies. We've hardly fixed sidewalks. We trimmed few trees. The only thing left is the LAPD. We have nowhere else. Everything is hanging by a thread."
LAPD Chief Charlie Beck, at the same public pleading, held during the Christopher Dorner manhunt, begged, "I'm asking the people of Los Angeles to help me protect the destruction of the Los Angeles Police Department."
But is any of this true?
Jerry Brown threatened to cut funding to public education, but he proved how bad things were by signing "trigger" legislation, which, if voters didn't approve Proposition 30, would automatically slash the budget.
Wesson and the tax backers are simply insisting voters believe the council is about to take the historic step of firing 500 cops.
Their claim is drawing guffaws.
"Anyone who is active in city politics knows that the mayor and City Council would never vote to cut public safety," says Stuart Waldman, president of the Valley Industry and Commerce Association, which supported Proposition 30 but opposes Proposition A.
Quips former LAPD chief Parks: "I've worked for the city for 50 years. I've seen two riots and five mayors. I've never seen a police officer laid off."
In 2012, budget adviser Santana proposed a hike in the real estate transfer tax, which hits only those who buy or sell property. But Wesson surprised everyone, torpedoing that idea in favor of a sales-tax hike. Wesson's plan is far less progressive, meaning it hits the poor hardest.
Los Angeles Times reporter David Zahniser discovered that Wesson's switcheroo followed intense lobbying by rich real estate groups represented by well-to-do super-lobbyist Harvey Englander.
Englander insists the real estate tax "discriminate(s) against one industry," while the sales tax would pour nearly twice as much money into the hands of the City Council by hitting everyone.
Englander runs the Yes on A campaign, which has reaped more than $250,000 in donations from wealthy developers and real estate firms such as Excel Property Management. So far, more than $1.07 million has poured in, funding pro–Proposition A advertising.
And how much has the No on Proposition A campaign received?
Nothing. In Los Angeles, one dirty secret is that very few people send checks to local ballot-measure campaigns. Thus, there is no campaign against the sales-tax boost.
Despite all this, Proposition A is not a slam-dunk. A recent Survey USA poll had the measure trailing badly, 26 percent to 46 percent, with 28 percent undecided. But Survey USA based that on a ridiculously high projected voter turnout of 62 percent.
The turnout on March 5 will be perhaps 20 percent or 30 percent, creating the potential for surprise results because the city's silent majority won't weigh in.
Many will stay home due to a stultifying mayoral race that, in the words of one consultant, features "three technocrats and a talk-radio guy," in which the differences between top-money rivals Eric Garcetti and Wendy Greuel are discernible by only the keenest of observers.
Yet Villaraigosa's longtime top deputy and policy strategist, Matt Szabo, who quit to run for the City Council District 13 seat, says the Wesson-Villaraigosa tax hike isn't needed. Szabo says, "The city is in far better shape than we once were."
According to Szabo, Santana's own report suggests the deficit is $101 million.
Villaraigosa, recently pressed by the Times' Zahniser to explain why his own longtime deputy pooh-poohs claims of a $200 million deficit, all but accused the veteran reporter of lying, blustering, "Matt [Szabo] hasn't said that to me, so I'll take that representation at face value — you're trying to create a controversy!"
The greatest criticism of these elected officials is that they haven't sufficiently curtailed an ever-expanding bill owed to tens of thousands of city workers who don't pay a dime of their own health premiums, and are guaranteed significant retirement checks the city hasn't saved enough for.
"This is like a guy with a bleeding artery and a paper cut on his finger, and all they do is fix the paper cut," says Dave Fleming, an attorney and prominent civic leader.
If voters approve the sales tax hike, little of the new revenue is likely to go to restoring services. City unions are expected to ask for a raise that would suck up most of it.
Reach the writer at email@example.com.
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