The Los Angeles City Council will probably finalize approval for placing a half-cent sales tax on the March 5, 2013 ballot as a way to raise enough revenue to cover the city’s budget deficit, projected to be $216 million by July 2013 and more than $300 million by 2014. The city’s sales tax will go up to 9.5 percent on all sales.
Of all the ways to get LA out of its budget woes, city leaders probably see this as the one that will cause the least pressure on City Hall, the alternative being layoffs, program and service cuts, and changing the city’s revenue structure.
But that doesn’t mean that the proposal has a chance of passing, particularly so soon after the taxpayers just voted for Prop. 30, which will also raise their sales tax. Nor does it mean that the council didn’t have other options.
The city council could have placed on the ballot a tax increase on all property and real estate sales, but that would have riled real estate developers. And of course, it could have proposed more pension reforms, but labor would have objected to that plan.
We could tell the council that an added sales tax hike would harm the middle class, working poor and other families, but we don’t think this fact will bother them as much as the previous objections will, especially around campaign time.
But approval of this tax will eventually hurt the city more than any of the proposed measures since it is all too easy to cross city lines to avoid paying the city any tax at all, especially when it comes to big ticket items like televisions, and computers. Going to Glendale, Pasadena, Burbank or other city’s malls won’t be at all inconvenient for Angelenos who are still financially strapped, or for those who are making more and more purchases online these days.
But as usual, this tax hike will hurt those Angelenos who can afford it the least, who have poor transportation options, or who lack other options to escape L.A.’s higher sales tax.
This newspaper grudgingly endorsed passage of Prop. 30, but this added piling on is getting out of hand.
It seems the more things change, the more the less fortunate are hurt.
Congratulations Mr. Wesson and Council.