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November 13, 2012

CES On Annenberg Radio News Regarding Proposed Sales Tax Hike On March Ballot

USC Annenberg Radio News -By Aaron Schrank


City Council Votes To Put Sales Tax Increase On The March Ballot

Photo Credit: Dottie B. (via Flickr Creative Commons)

Los Angeles faces a $220 million budget deficit. City Administrative Officer Miguel Santana, says the city's done all the cutting it can, and more revenue is needed to prevent cuts to crucial services.

"This final piece really requires now a vote of the people if our intention is to keep public safety intact," Santana said.

Up until two weeks ago, budget officials were pushing a ballot measure that would increase taxes on real estate sales as the answer to the city's problems. Today's proposal to put a half-cent sales tax boost on the ballot, which received four no-votes in council, signals a change in strategy.

This shift came after aggressive lobbying from real estate groups who opposed the proposed tax on property transactions. Harvey Englander runs the lobbying company that represented the real estate groups. His clients presented city leaders with polling numbers showing that a sales tax hike would be more popular with voters than the real estate measure.

"My clients--the realtors' association--looked at all the taxes that had been proposed by the CAO a few months ago," said Englander. "We did research on them. We found the taxes that would most severely impact the property owners were also the least popular taxes. But instead of just wanting to say ‘no,' we worked with elected officials and the city staff to help provide alternative taxes that would have more public acceptance."

Some see this now-successful lobbying effort as somewhat of backroom deal.

"We see this as the real estate industry funding what is clearly not an unbiased third-party poll to provide cover for public officials to do their bidding," said Larry Gross, Executive Director of the Coalition for Economic Survival.

Santana said while the city met with the real estate groups, their influence was minimal. He said the city decided on a sales tax hike because similar measures have been more popular with voters around California. Another factor, Santana noted, is that the new proposal brings in more money.

"At the end of the day, the Council approved a sales tax because it would provide the most general fund revenue.," he said. "The other alternatives would provide less than half of what a sales tax increase would do."

Four councilmembers--Eric Garcetti, Jan Perry, Mitchell Englander and Dennis Zine--voted against the proposal. The Council will vote again next week before the tax hike is approved for the March 5 ballot.

Emmanuel Martinez and Melissa Runnels also contributed to this report.



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