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L.A. budget official backs 2 tax hikes to avoid public safety cuts

October 17, 2012 |  6:29 pm

Los Angeles City Administrative Officer Miguel Santana, right, listens to a city employee denounce plans to eliminate 1,000 jobs during a City Council meeting in 2010. Credit: Allen J. Schaben / Los Angeles Times
L.A.’s top budget official on Wednesday recommended two tax measures for the March municipal election ballot, saying both are needed to avert cuts to police and fire services.

City Administrative Officer Miguel Santana said the tax hikes -- one on parking revenue, the other on real estate sales -- would generate up to $125 million annually for the city budget, which has been in a continual state of crisis since the nation's 2008 financial meltdown. He put a particular emphasis on the proposed real estate tax hike, arguing that there is a connection between the safety of a community and its property values.

“It’s impossible for us to move forward and continue to protect public safety from serious reductions without this new revenue source,” he said.

Santana’s proposal comes six years after Mayor Antonio Villaraigosa and the City Council embarked on a plan to boost the size of the Los Angeles Police Department by 1,000 officers. To pay for that expansion, Villaraigosa and the council tripled the trash pickup fee for single-family homes from $11 to $36.32 per month. Trash fees also tripled for apartment buildings with two to four units.

The City Council is scheduled to decide Oct. 30 whether to draft the two ballot measures. If they proceed, the proposals would appear on the same ballot as the candidates seeking to replace Villaraigosa, who leaves office in June.

Both measures would need 50% of the votes cast plus one to win passage. One would increase the tax on parking facilities to 15% from the current 10%. The other measure would establish a new taxation system for property sales, generating up to $82 million per year for the budget that pays for basic city services.

Santana floated a plan earlier this year for doubling the tax on all real estate sales, from $4.50 for every $1,000 of a property's value to $9. On Wednesday, he released a reworked proposal, calling for a tiered system that would reduce the tax rate on homes that are in the bottom quarter of sales -- those currently worth $255,000 or less -- while doubling the rate for the top quarter, or homes valued at more than $585,000.

Under the tiered proposal, properties sold for between $365,000 and $585,000 would see the tax rate go up by 50%, from $4.50 per $1,000 in sales to $6.75.

At least 10 real estate associations have spent months arguing against Santana's previous proposal, which would have increased the tax on a $500,000 home sale from $2,250 to $4,500. Those associations joined forces earlier this year to form Los Angeles Citizens Against Discriminatory Taxes, an advocacy group that sent mailers to voters last month arguing against such a ballot measure.

"Before the City Hall bureaucrats ask the City Council to approve new taxes, let our leaders know that new taxes are a bad idea," the mailer said.

City Hall lobbyist Jeff McConnell, spokesman for the group, would not say how many of those mailers were sent. And he had no comment on Santana's latest real estate tax proposal, saying his organization is still studying it.

Santana said that he hoped the real estate industry would find his reworked plan more favorable, particularly the reduction in the tax rate for the least expensive properties. He said the proposal reduces the tax rate for more than half of the city's property owners, providing assistance to first-time home buyers.

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-- David Zahniser at Los Angeles City Hall
twitter.com/DavidZahniser

Photo: Los Angeles City Administrative Officer Miguel Santana, right, listens to a city employee denounce plans to eliminate 1,000 jobs during a City Council meeting in 2010. Credit: Allen J. Schaben / Los Angeles Times

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