LEANING RIGHT-Everybody is aware that California in general and Los Angeles in particular are in the throes of devastating downward economic spirals. I learned this recently that city officials are addressing this impending disaster by proposing a half cent sales tax hike on the November ballot.
City Administrative Officer Miguel Santana and Chief Legislative Analyst Gerry Miller recommended a tax hike that would generate $4.5 billion over 15 years -- $3.86 billion for roads and potentially $640 million for broken and buckled sidewalks. Of course if this thing passes the proposal of 15 years will become several generations probably outlasting the age of the universe.
The proposal is contained in a report that examined a variety of strategies for generating the money needed to address a major repair backlog. City elected officials originally considered a bond measure -- which would be paid with increased property taxes. But the two policy advisors said that strategy wouldn't generate enough money.
A sales tax hike, the report said, also would be paid by a greater number of people who use LA's streets, including those who live outside city limits. "An important message communicated by participants of public outreach meetings has been that the [street repair program] not be solely financed by property owners," the two politicos wrote.
The council will have to decide in July if it wants to place the street repair tax on the November election ballot. Two-thirds of voters would have to approve the measure.
Councilmen Mitchell Englander and Joe Buscaino, who have been looking for ways to fund street repairs, said an April 2 hearing would be held on the tax proposal. Buscaino declined to say whether he supports the proposal but suggested there would be risks in delaying action.
"If we continue to sit on our hands, it’s going to get more costly," he said. He overlooked the fact that if the half cent tax hike occurs it will pretty much assure the collapse of California and Los Angeles.
Buscaino and Englander tried two years ago to put a property tax hike on the May 2013 ballot, only to pull that plan back. Council members were worried that it could doom a separate plan to hike the sales tax in the city. The separate sales tax hike was defeated by voters.
A tax to fund street repairs could dovetail with Garcetti's "back to basics" agenda. But getting two-thirds support could also prove difficult. Garcetti spokesman Yusef Robb did not indicate whether the mayor supports the proposal.
"Mayor Garcetti is committed to improving LA's infrastructure and will continue assessing a range of options to determine the best way forward," he said in an email.
The tax hike plan comes at a time when Los Angeles faces potentially major legal liability over its damaged sidewalks. The Bureau of Street Services estimates that 40% of the city's sidewalks may be in need of repair, with a majority of them damaged by tree roots. Advocates for wheelchair users have gone to court to force the city to make more repairs.
The proposal drew a critical response from Jack Humphreville, a neighborhood council member and Citywatch contributor, who campaigned successfully against the city's sales tax hike last year. Jack said that in recent years, money that should have gone to repairs went instead to "over-the-top compensation" for city workers.
The city's elected officials "were grossly negligent over the last two decades in maintaining our infrastructure," he said. Jack’s observations are obvious to everyone.
The city should cut out the cars provide by the city to some workers as well as their inflated budgets
Coincidentally on the same day I learned of the half cent tax hike initiative I also learned of the worsening plight of the movie industry.
In 1958, Ed Michelson started a motion picture catering company — Michelson Food Services — and made food for the cast and crew on such classic films as "West Side Story" and "Some Like it Hot."
Michelson was one of the first to operate a food service truck on film sets, and for decades business boomed, back when virtually all the big studio movies were filmed in Los Angeles.
Today, son Steve Michelson said that's no longer the case. When his father died, Michelson decided to start his own catering company, Sylmar-based Limelight Catering, which employs about 50 people and has been in business for 14 years.
But Michelson said his catering company would be making millions of dollars more a year — and even expanding the business by adding more food trucks — if production stayed in California.
"We have the best weather and the best locations and it doesn't matter," Where else does one get deserts, snow, valleys, and ocean and seascape venues for movie venues. Michelson said. "Even if a show or movie is supposed to be based in Los Angeles, they go to other states because they are getting offered bigger incentives." I wonder if we would have to change the name “Hollywood” to “dudsville.”
He's not alone in the fight to keep his industry-dependent business afloat. Catering companies, dry cleaners, prop houses and many other businesses that rely on production companies for the bulk of their revenue have been forced to relocate to other states, slash payrolls, file for bankruptcy or close because of the lack of jobs in California.
Southland Lumber & Supply Co. in Inglewood closed in February after 68 years of being one of the leading suppliers of lumber to the entertainment industry. House of Props, one of Los Angeles' oldest prop houses, closed in December.
On Saturday, Michelson joined more than 600 other businesses, industry groups, politicians and community members at a rally to support legislation that would extend and expand California's film and TV tax credit, which is due to expire in 2017.
Founded in 1977, Independent Studio Services, which employs about 160 people, is one of the Southland's largest prop houses. To keep up with business that has left California, the company has opened offices in several other popular filming locations, including Louisiana, Georgia, New Mexico, New York, Massachusetts and even overseas in London.
Jason Waggoner, owner of trailer rental firm Star Waggons Studio Rentals, was one of three business owners or employees who spoke at the rally. Star Waggons, whose trailers are ubiquitous on sets across the U.S., is based in Sylmar and employs just under 100 people.
California must remain competitive, Waggoner said, or risk "losing this unique industry forever."
"Our industry is packing up and leaving our state, and unfortunately it's leaving faster and faster," he said. "It's affecting all corners of the economy. Whether it be that we have to cut payroll from jobs or limit spending to literally hundreds of local vendors, the effects are real."
Co-host Ray Bidenost, principal of Chef Robert Catering in Sun Valley, also said legislative changes are necessary. Although Bidenost's company has locations in Atlanta and Louisiana, he said he wants more filming to return to his home state.
"We always talk about runaway production — but what about runaway businesses?" he said in an interview. "Industry businesses are leaving or shutting down. I believe if we extend and increase [the tax credit], more production will come back."
The other factors that are helping to drive the latest nail into the coffin are
- California already has the highest sales tax in the nation.
- Property taxes are the 10th highest in the nation
- Rick Perry from Texas is waltzing in again to woo California businesses.
- Occidental Petroleum is relocating to Texas.
- Northrop Industries relocated from California to Virginia.
California businesses are bailing right and left.
(Kay Martin is an author and a CityWatch contributor. His new book, Along for the Ride, is now available. He can be reached at [email protected] )
-cw
CityWatch
Vol 12 Issue 25
Pub: Mar 25, 2014
