Hot Air Alert: Hold Onto Your Wallets

Over the last two months, the City Council has been noticeably quiet about increasing our regressive sales tax by a half cent to 9 ½ %, one of the highest rates in the country. However, this silence is about to end as July 2 is the last day for the City Council to adopt a motion requesting the City Attorney to prepare resolutions placing the proposed measure on the ballot. The last day for the City Council to adopt all of the resolutions placing the proposed measure on the ballot is two weeks later, July 16.

But will this ballot measure dubbed Save Our Streets LA (“SOS-LA”) by the marketing geniuses on the City Council be ready for prime time? And what is the likelihood that it will be approved by two-thirds of the voters?

In its rush to pick our pockets, the City Council has ignored a viable alternative that does not require a $300 million a year tax increase, an amount equal to a 7 ½ % bump in our real estate taxes. This would involve the issuance of long term bonds serviced by the City’s General Fund and the incremental taxes derived from the 20% tax associated with the doubling of our electricity rates over the next decade.

But this new tax will allow the City Council to divert the incremental tax revenues paid by the Ratepayers of the Department of Water and Power to higher salaries, pensions and benefits as well as the pet projects of the members.

There are also major flaws with SOS-LA, ranging from the $800 million underfunding of the Pavement Preservation Program (a fancy name for ordinary day to day maintenance); the neglect of our 800 miles of alleys; the failure to address the legitimate concerns of the environmental community; the funding of only 30% to 40% of the needed sidewalk repairs; the unwillingness to establish a truly independent, well funded oversight body staffed by knowledgeable experts; and the lack of detailed operating plans and experienced management.

The outcome: in 20 years, the next generation of Angelenos will be forced to finance the repair of the City’s streets for yet a third time.

At the same time as the City Council is rushing to place the $4.5 billion Street and Sidewalk Tax on the ballot, it has failed to systematically address the City’s Structural Deficit, its two pension plans that are underfunded by $15 to $20 billion based on realistic rates of return, and its deferred maintenance budget that is estimated to exceed $10 billion.

The City Council has not even considered the recommendations of the Fix LA Coalition contained in its “No Small Fees” report about exorbitant bank fees being paid by the City. Nor has it addressed the recommendations of the LA 2020 Commission, including its call for the establishment of an Office of Transparency and Accountability to oversee the City’s budget, finances, and the efficiency of its operations. Nor has it undertaken to review the recommendations of the Neighborhood Council Budget Advocates, including the placing on the ballot of a LIVE WITHIN ITS MEANS charter amendment.

The City Council will tell us that they will take all these recommendations under consideration. But by then, the Street and Sidewalk Tax will be on the ballot and we have lost any leverage to influence the measure. We will then be in a battle royal as City Hall and its cronies will launch a richly funded campaign to convince two-thirds of the voters to pass this tax.

But can we trust this City Council?

After all, this is the same City Council whose President, Herb Wesson, is in favor of giving IBEW Union Bo$$ Brian d’Arcy a pass on explaining what happened to $40 million of Ratepayer money that was funneled to the Joint Safety and Training Institutes.

(See report by Frank Stoltze of KPCC: LA City Council President Questions Mayor’s DWP Union Strategy)

The proposed half cent increase in our sales tax is just another one off budget deal cooked up by the City Council as its holds our streets hostage for a princely ransom. But the voters will see through this obfuscation. The odds of this tax receiving the necessary two-thirds vote are slim, very slim, as the voters do not trust City Hall, especially given that it refuses to engage in real reform of its precarious finances.

You can fool some of the people some of the time, but not all of the people all of the time.

(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