LA WATCHDOG-Our City Council intends to place a half cent increase in our sales tax on the November ballot to finance the $4.5 billion repair of our lunar cratered streets and broken sidewalks. This will raise our sales tax to 9 ½ %, one of the highest rates in the country, once again sending a message to the rest of the country that LA is closed for business.
This new tax will raise an average of $300 million a year for the next 15 years.
The City estimates that the Street Tax will cost $31.50 for each City resident, or less than a thin dime a day. However, this assumes that we are only picking up 42% of the bill while our local businesses and tourists absorb the other 58% of the burden.
But is this a valid assumption? No, since we all know that there is no such thing as a free lunch.
Put another way, $300 million a year equates to a 7.5% increase in our property tax.
But this is not the only hit to our wallets.
MOVE LA, a politically powerful transportation advocate, is pushing the County to raise its sales tax by a half cent so that it can fund additional transportation related projects. This would increase our sales tax to a job killing 10%, the highest in the nation.
Our sewer fees are scheduled to rise by $200 million over the next five years.
Our beleaguered Department of Water and Power will need another $1 billion over the next five years to finance the maintenance and repair of its infrastructure, pay for numerous unfunded environmental mandates, and fund its pension plan.
We will also be tagged with an additional $160 million in DWP taxes through the City Utility Tax and the not so transparent 8% Transfer Tax.
In total, new taxes and fees will reach almost $2 billion, the equivalent of a mindboggling 50% increase in our property taxes.
But wait, there’s more.
The County’s Flood Control District wants us to finance its Stormwater Master Plan that is expected to cost $40 billion over the next twenty years. Our 40% share of the $2 billion a year is $800 million, equivalent to a 20% increase in our property taxes.
Overall, hardworking Angelenos will have to pick up a $2.8 billion tab, the equivalent of a 70% increase in our property taxes.
But this does not include any new money for LAUSD.
Nor does it include the cost of water and solar mandates that may be dumped on the DWP’s Ratepayers.
Nor does it include $800 million over the next twenty years that is needed to maintain our existing streets.
Nor does it include any funds for Mayor Garcetti’s Green Streets, Complete Streets, Cool Streets, and other similar transportation related programs.
Nor does it include any Pension Tax to finance the massive unfunded pension and other retirement liabilities of the City and the County that are fast approaching $10,000 for each City resident.
The Street Tax will require the approval of two thirds of the voters, an unlikely event given that the voters do not trust City Hall. It was only 14 months ago that 55% of the voters rejected Proposition A, the permanent half cent increase in our sales tax.
Before proceeding, the City needs to realize that Angelenos are not an ATM. Rather, the City needs to respect the wallets of hard working Angelenos who, despite the benefits of Proposition 13, live in the highest taxed state in country.
As a first step, the City needs make sure that the “Save Our Streets LA” plan is well thought out, full and complete, and most important, transparent and understandable to the average voter. This would include providing funding for the complete repair of our sidewalks and require that all of our streets would be in “good to excellent” condition within twenty years.
There also needs to be independent oversight by knowledgeable experts, not political hacks. There must be meaningful enforcement measures if the program is mismanaged, over budget, or behind schedule.
The City also needs to detail the increase in taxes and fees that we are going to be assessed over the next five years, including increases in our DWP and sewer rates.
The City must also make a good faith effort to review, analyze, and implement the recommendations of the LA 2020 Commission, including the establishment of an Office of Transparency and Accountability, the passing of a Truth in Budgeting ordinance, and the creation of an independent Commission on Retirement Security.
Finally, the City of Los Angeles must place on the ballot a LIVE WITHIN ITS MEANS charter amendment. This will require the City to develop and adhere to a Five Year Financial Plan, pass two year balanced budgets, and over the next twenty years, fully fund its two pension plans and repair its streets, sidewalks, and the rest of its failing infrastructure.
The City Council may have control of the City’s budget. But with $2.8 billion in new taxes and fees, the equivalent of a 70% increase in our property taxes, the City Council needs to understand that we have the vote.
It is time for City Hall to clean up its act.
(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee, The Ratepayer Advocate for the Greater Wilshire Neighborhood Council, and a Neighborhood Council Budget Advocate. Humphreville is the publisher of the Recycler Classifieds -- www.recycler.com. He can be reached at: [email protected]. Hear Jack every Tuesday morning at 6:20 on McIntyre in the Morning, KABC Radio 790.)
-cw
CityWatch
Vol 12 Issue 38
Pub: May 9, 2014