Excerpted from the Pasadena Star-News – Despite a looming budget deficit of more than $200 million, a City Council panel on Friday refused to endorse two proposals to increase taxes, and it indefinitely postponed a suggestion to increase parking taxes.
The council’s Rules and Election Committee sent two proposals – a $39-a-year parcel tax to fund parks and a doubling of the documentary transfer tax – to the full City Council without recommendation. The tax measures are being eyed for the March ballot.
“I want to give the full City Council an opportunity to discuss these,” said Council President Herb Wesson, who chairs the panel. “So, I am sending these on without recommendation.”
The parcel tax proposal, first suggested by the People for Parks organization, would add $39 to annual property tax bills, with all the money going to support parks programs.
There was no report on the full impact of the measure. However a similar proposal made several years ago for a $36 a year parcel tax estimated it would bring in $30 million a year.
Steve Soboroff, a businessman and former Parks Commission president, urged the city to place the measure on the ballot. It would need two-thirds voter support to be approved.
“I am confident there are two-thirds, plus one, residents of this city who will support this,” Soboroff said. “Look at what happened with the Endeavour. We had 1.3 million people turn out to witness that and there was not one arrest. People will come together when there is a common goal.
“There has been no great city without a great park system. The park system in L.A. has been a stepchild where you are taking money away to support other programs.”
The increase in the documentary transfer tax would change the tax rate charged when homes are sold. It would bring in up to $82 million a year and require more than 50 percent of voters to approve.
Under the proposal from City Administrative Officer Miguel Santana, the city would change from a flat tax of $4.50 per $1,000 to a tiered system with rates based on the sale price. The tax rate for homes selling under $255,000 would see a reduction in the tax charges, while the rate for homes above the $586,000 price range would be doubled to $9 per $1,000.
Mel Wilson, a Realtor in the San Fernando Valley, spoke against the proposal, saying it is coming at the wrong time.
“We appreciate what the city is facing and that hundreds of workers have been laid off,” Wilson said. “But, there is another side to this story. It is the folks who have been devastated as a result of this economy over the last four years.
“These are the folks who have put their life savings into their homes and seen the value of their homes drop. Piling on another tax is the last thing we need.”
As for the parking occupancy tax, Santana suggested it should increase from 10 percent to 15 percent to bring in an extra $41 million to $43 million a year.
Greg Spiker, a representative of the Los Angeles Parking Association, said the proposal would have a “ripple effect” on other businesses in the city.
“The CAO report talks about parking taxes in San Francisco, Chicago and New York, but that isn’t our competition,” Spiker said. “Our competition is Beverly Hills, Culver City and El Segundo, where people and businesses have a choice to go to and where there is no parking tax at all.
“We recognize the city has a budget shortfall, but we think it should do more to collect the taxes that are not being paid, which are $20 million a year.”
– Read more of the Rick Orlov article at DailyCaller.com.
