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Politics, government and public life for Southern California

LA Mayor Garcetti's budget seeks to lower business tax, boost basic city services (updated)

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The first budget released by Los Angeles Mayor Eric Garcetti seeks to reform the city's business tax while simultaneously boosting basic city services, like road repairs and library hours. 

The $8.1 billion spending plan, which would take effect on July 1, first requires approval from the Los Angeles City Council. Budget hearings are scheduled to start on April 29. Neither council President Herb Wesson nor budget chair Councilman Paul Krekorian had any comment on the spending proposal. (Read the full budget and a summary below.)

"While we have many highlights, this budget represents a transitional year," Garcetti said. "We're making a down payment on our future and so, this first year the gains will be modest."

The Mayor's Office focused not just on numbers in the 2014-15 budget, but on the performance metrics attached to it.

"It's trying to look at what's the impact of the budget decisions we make," the mayor said. "We do a lot of short-term, living cheaply that costs us a lot in the long term."

Garcetti also hopes to lower the top tax rate paid by companies in Los Angeles. The current tax is $5.07 per $1,000 in gross sales. Beginning on January 1, 2016, that rate could drop to $4.75. It would be $4.25 by 2018. Reducing that tax would cost the city about $15 million a year in lost revenue. Budget officials expect to make up that difference by attracting more businesses to the city.

Even at $4.25 – something the city would not achieve for four years – the city's business tax would still be higher than the neighboring cities of Beverly Hills, Culver City, West Hollywood, Glendale and Calabasas.

"I'm sending a message to the business community, to entrepreneurs, to those business decision-makers that are here right now: we want you in Los Angeles and we'll fight to keep you here," Garcetti said.

The president of the L.A. Area Chamber of Commerce noted his group has lobbied to reduce the gross receipts tax for more than a decade. 

"The  proposed reduction announced by the mayor is a positive first step in putting the city of Los Angeles on the right track to attract new business, and encourage those already here to expand creating more jobs and growing our local economy," said Gary Toebben.

For Angelenos who don't own a business, here are some highlights from the budget proposal:

  • City employees: The budget does not include any cost-of-living increases. It also requires all civilians to pay 10 percent toward health care premiums.
  • Fire Department: Jobs in human resources, communications and technology will be given to civilians rather than firefighters. The city will also start work on creating a consolidated 911 system that can respond to police, fire and medical emergency calls.
  • Road Repairs: The Mayor's Office hopes to repair 2,400 lane miles of streets. This year, about 2,200 miles were repaired.
  • Sidewalks: The city expects to spend $20 million to repair sidewalks. That's twice as much as was allocated for repairs this year, although so far the city has not yet spent any of that money. 
  • Libraries: Branch libraries will be open an additional eight hours a week.
  • Code Enforcement: The Department of Building and Safety will get money to hire about a dozen more inspectors. This is expected to cut the response time to complaints from 25 to 14 business days.
  • Street Cleanup: Skid Row will receive $3 million. Another $5 million will be allocated for debris cleanup in other parts of the city.
  • Admission Fees: It will cost an extra dollar to visit the Los Angeles Zoo. Public pools, which do not have an admission fee, will now cost $1.

 

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