Los Angeles Business Journal

Villaraigosa Calls for Tax Hike

By Howard Fine Monday, February 11, 2013

Los Angeles Mayor Antonio Villaraigosa on Monday formally endorsed a half-cent sales tax hike on the March 5 ballot.

Villaraigosa had previously said he would only support the measure if the City Council worked to privatize operations of the Convention Center and Zoo and to reduce city costs for employee pensions. But late last week, he changed his mind.

At a press conference Monday morning at Cedars-Sinai Medical Center, Villaraigosa said: “We cut a third of the Los Angeles civilian general fund budget. We’ve had consolidations of departments, we found efficiencies. We’ve done everything that we can. When you look at the kinds of tough decisions that we’ve made … I can now support a sales tax increase.”

If voters approve the sales tax measure, L.A.’s sales tax rate, which now stands at 9 percent, would rise to 9.5 percent, making it one of the highest in the county. The sales tax rose a quarter-cent on Jan. 1 due to statewide approval of Proposition 30.

The half-cent sales tax increase would generate an estimated $200 million a year in additional revenue for city coffers. The city budget has been running an annual structural deficit of about $210 million.