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LA City Council puts half-cent sales tax hike proposal on March ballot

November 13, 2012 12:00:00 AM PST
Will people in Los Angeles vote for a sale tax increase? The city council is putting a tax hike on the March ballot, saying it's needed to close a budget shortfall.

The Los Angeles City Council voted Tuesday to ask voters to approve a half-cent sales tax increase. The current sales tax is 8.75 percent. The request to increase it to 9.25 percent will go on the March ballot.

It comes on the heels of voter-approved Proposition 30, which raises the sales tax in California by more than 3 percent.

If voters approve the increase, it would generate an estimated $214 million, money its supporters say is needed to keep basic services like police protection without layoffs.

"Unless we have new revenue sources there is simply no way that we can make cuts next year, let alone the year after that, that will not significantly affect public safety," said Councilman Paul Krekorian.

The city council has already cut into the city budget. The number of city employees is the same as it was 20 years ago when Tom Bradley was mayor.

Next year's deficit is expected to be $216 million. Hiring has been frozen and employee pension contributions have been increased.

"This effort here to call for this sales tax increase will give us the bridge we need to keep the city together," said Councilman Tom LaBonge.

Critics say people will just go where the sales tax is lower. One study indicates, however, the impact on the city would be negligible. If people go outside the city to buy a car, for instance, they will still pay the higher tax based on living in Los Angeles. Three-quarters of a percent will go to the city where the car is purchased; the rest would go to the city of Los Angeles.

"In my opinion at this point, this is a regressive tax and it would cause other businesses to reconsider either coming here or possibly cause them to leave," said Councilwoman Jan Perry.

LAPD Chief Charlie Beck is on board with the new tax hike, according to the Los Angeles Times, saying if voters don't approve it, the city could lose 500 officers.

Council President Herb Wesson is guardedly optimistic that the sales tax increase has a chance.

"You have to have something on the ballot that gives you an opportunity for success," said Wesson.

The city council now has until March to convince voters they should approve a half-cent sales tax increase.

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