Business leaders to support sales tax for mass transit?

As gas prices skyrocket, an interesting story is unfolding on the transit-funding front here in Los Angeles: the business community may get behind a sales tax increase to pay for more road and mass transit projects, including the beginning of the subway to the sea.

One of the key leaders in the business community in L.A. -- David Fleming, chairman of the Los Angeles County Business Federation -- told me late Tuesday afternoon that as an MTA board member he intends to vote to move the sales tax forward toward the November ballot. He just wants assurances that the money won't be raided later.

Fleming has deep ties to the business community (he's a partner at Latham & Watkins, the giant law firm, and former chairman of the Los Angeles Area Chamber of Commerce) and lives in the San Fernando Valley.

He also was appointed to the MTA Board by Mayor Antonio Villaraigosa, who wants to build the subway to the sea. If Fleming is a bellwether on support for the sales tax in the business community or the mayor's office, that could translate to serious financial and political support for a campaign that must ultimately win two-thirds support from voters.

Fleming is one of many business leaders from across Los Angeles County that are gathering Wednesday morning at the City Club. The purpose of the meeting is to discuss the proposed half-penny sales tax hike and whether it's something that business wants to get behind.

“We did a poll of our members in the business federation and asked them what are the three things you want us to work on,” Fleming said. “We expected them to say taxes and regulation, but the number one issue was congestion.”

For more details, keep reading...

Villaraigosa hasn't said publicly if he supports the sales tax, although he's indicated that he likely would if polling was favorable. The mayor's press office did not return my calls on Tuesday, but the fact that one of Villaraigosa's appointees is saying that he supports the sales tax may be an indicator of where the mayor stands.

What all this means is that a coalition for a sales tax increase appears to be forming. Another twist is that Maria Elena Durazo, the secretary-treasurer of the influential Los Angeles County Federation of Labor, is also on record saying she may back such a tax becuase it would help union members get around and likely provide construction jobs.

The sales tax still has considerable hurdles. A bill in the state Legislature will likely have to pass to allow L.A. County to take the issue to voters this year. And a majority of the MTA Board will have to approve it at the board's meeting later this month.

"I don’t think there’s any question the majority of the board" will support it, Fleming said. "But we have to craft it in such a way that the public is going to understand it and support it."

This issue involves politics and taxes -- two substances that should be labeled "highly unstable." But keep watching.

Previously: sales tax goes forward.

--Steve Hymon

Comments

[Jon Konjoyan]

Note to David Fleming, chairman of the L.A. County Business Federation who intends to support increasing sales taxes to fund mass transit projects: don't do it! Don't believe that new taxes will go to anything they are promised for. We've traveled down that (disappointing) road many times. As a business leader you should know that raising taxes during a recession does not help businesses or their customers who are already suffering.

[Kymberleigh Richards]

I wish the original article had made clear what those of us in public transportation advocacy have known all along; the state law enabling Metro to put a sales tax on the ballot comes with a precise list of projects that the money has to be used for.

The projects, as I recall them, are:
* Expo Linel (Santa Monica)
* Crenshaw transit corridor (to LAX)
* San Fernando Valley north-south busways or bus-only lanes
* Metro Gold Line extension (to Duarte)
* Regional light rail connector between 7th St/Metro Center and Union Station (connecting Blue and Expo Lines to Gold Line)
* Westside subway extension
* Several I-5 projects
* Alameda Corridor East grade separations
* Additional clean fuel bus purchases
* Soundwall construction on various freeways
* Funds to cities for major street resurfacing and repair
* Additional Metrolink equipment
* Improved Eastside light rail access circulators

There is also a provision requiring 20% of the revenue to be used to operate bus service and 5% to operate rail service, which is important because once something is built, there still needs to be money available, on an ongoing basis, to run that service.

(I think that's worth paying an extra cent per two dollars spent ...)

With all of that hard-coded into the law, all it would take is for Metro to include language preventing a "raid" on those funds and you have the assurances that we all want.

[lsm]

We should applaud the vision of the majority of members in the business federation who recognize congestion in LA as a more pressing concern than even regulation or taxes. At the same time, we should condemn a mayor who awaits polling results before announcing his position on an important proposed tax increase. Playing to the masses befits a high school student running for class president. An effective mayor of a major city must weigh a vital issue and then strive to lead us to his vision of the better choice for our community.

[Robert]

The first comment hit it right on the head. The tax supports transportation, not just mass transit. In addition to this, the state government will raid this money just like it did the other $5+ billion they borrowed and never repaid.

I'm all for building light rail and the subway to the sea. But, the wording of this tax has to be such that it is ONLY for specific rail projects, and the state CANNOT tough the money no matter what. If those conditions are met, I'm on board. If not, then I'm against it.

[M]

Wait, isn't this increase in sales tax just for TRANSPORTATION and not mass transit? As in, it can be used to just expand freeways and roads and not necessarily add more trains? Did the focus on where this money is going change?

I really hope people stop intentionally misrepresenting this tax and what it is going to be used for so that they can promote their specific agendas...... This is exactly the reason why I do not support this tax at the current time despite being a regular rider of the MTA system and a strong supporter of expansion. I'd rather give the MTA money out of my own pocket or put my money into buying supplies or labor for a new train system directly than have my tax rate increased. Increased taxes mean it can be used in ways I don't expect or that were misrepresented, it gets skimmed and cut down from all of the administration costs along the way and costs are bloated after all of the introduced delays. We need to open our minds in ways to obtain money besides taxes.

Example: NBC/Universal wants to add 4000 parking spots where there currently a 400 parking spot lot near the Universal City Red line station. Why doesn't Universal, instead of dumping who knows how much money into building a parking lot and the resulting maintenance, blocking the mountain views and adding large amounts of traffic in the awkwardly shaped area, build a much smaller parking lot and dump the rest of the budgeted money into the MTA. Maybe the MTA as a result can expand coverage so less people need to drive to Universal Studios and expand service hours so the trains can all night on Saturday and Sunday?

[SouthBayLakersFan]

No, the sales tax would be 8.25% +.50% = 8.75% = today's Alameda County sales tax rate. I don't like more taxes but a 1/2 a penny increase to pay for better mobility is worth it. The Feds and the State $$ aren't going to be there w/o our share of the $ to fund transit and the pie from them is getting smaller. Our Metro Rail can be so much better and serve so many more people if we can get it extended to more places where people work, shop, play, and live. Yes, it will be $$$ but if we wait and keep waiting it will be more expensive. Think if we tried to build the Red Line from scratch today? Or, the BART which was considered expensive in 1972 at $1B.

[Bob Zwolinski]

½% more sales tax… That’s 50 cents more per every 100 dollars.
BIG WHOOP!
I’ll gladly pay quadruple that tax to build some decent rail transportation in this county!
Shame on us if the tax does not pass. All we’d be doing is putting the burden on the next generation when the cost to build a rail line will jump another 30 to 50%.
It’s not likely that either the state or the federal government are going to hand us 5 billion dollars on a silver platter any time soon.
We’re expecting another 3 to 4 million more people to be living in L.A. County by the year 2030.
We’d better start funding and building our transit system and get something in place fast before our current horrific gridlock issue becomes a 24-hour-a-day hell!

[M]

This may seem like a stupid question, but why can many other states not have state income tax and have as high or lower sales taxes as California, lower taxes for small businesses and they aren't in the same sort of financial binds as in we are here in California? Are we not getting the necessary share of federal money? Are we more wasteful? Are too many people in California not "recognized" on some level that has to do with getting money? Do they just tax people in different ways to make up the difference?

Maybe I've become more of a scrooge as I've gotten older and pay more attention to how I am spending my money. As a result though, this makes me more curious where my tax money is being used and where it is being wasted. After all, I spend a large amount of my time working just to pay taxes....

[yue]

we don't need more tax we are almost at 9%, you guy trying to squezed the public like communist on Russia, we better go live there.

[Al]

LA tax is already 8.25%. If California passes a 1% increase and LA adds another 1/2% tax. Tax in LA will be almost 10%. I can't see many people or businesses get behind that.