Los Angeles Business Journal

L.A. Puts Sales Tax Increase on March Ballot

By Howard Fine Tuesday, November 20, 2012

The Los Angeles City Council on Tuesday voted to place a half-cent sales tax on the March ballot to close a persistent $200 million budget gap.

If voters approve the sales tax measure, L.A.’s sales tax rate, which now stands at 8.75 percent, would reach 9.5 percent as of next July 1, making it one of the highest in the county. It’s already set to be hiked to 9 percent on Jan. 1 under Proposition 30.

The 11-4 vote came despite opposition from former Mayor Richard Riordan and the leaders of a major city employee union, Service Employees International Union Local 721; both had argued the sales tax hike would hurt the working poor.

Councilmembers Eric Garcetti and Jan Perry – both running for mayor on the same March 5 ballot – were among the four no votes; Mitchell Englander and Dennis Zine also voted against the proposal. The other two major mayoral candidates – City Controller Wendy Greuel and radio talk show host Kevin James – have also come out against the sales tax hike.

Shortly after the council vote, Mayor Antonio Villaraigosa issued a statement saying he would return the measure “without signature,” which allows it to proceed to the ballot. However, Villaraigosa said he will not actively support the sales tax hike unless it is tied to reforms, including private operation of the city’s zoo and Convention Center, some department consolidation, job cuts and the creation of a new economic development agency.

One major local business group, the Valley Industry and Commerce Association, has gone on record opposing the sales tax hike.