By Joel Fox
Editor of Fox & Hounds and President of the Small Business Action Committee
Friday, June 24th, 2016
The Los Angeles area business community said they were ready to battle for the half-cent sales tax dedicated for transportation. They better roll up their sleeves and get ready for a tough fight. The reason? The Los Angeles Metropolitan Transportation Authority board voted 11 -2 to put the tax on the November ballot with no end date, “no sunset” in the parlance of the board.
Dealing with transportation gridlock would grow the economy and create jobs according to many speakers at the board hearing. Representatives from business groups including the Los Angeles Chamber of Commerce, BizFed, Valley Industry Commerce Association, National Association of Women Business Owners, the Los Angeles Latino Chamber of Commerce and others lined up at the microphone in support of the measure.
BizFed founding CEO Tracy Hernandez told the board that the number two issue for the business community was traffic gridlock.
But here’s the rub–the number one issue for county businesses is taxes. There lies the measure’s vulnerability.
The sales tax requires a two-thirds vote to pass. Despite the powerful political players, including the mayor of Los Angeles and four of the five county supervisors, business and unions, whose representatives also testified on behalf of the measure, there will be opposition against the tax.
Elected officials from Los Angeles County cities objected to some of the plans for spending the money—or not spending enough—in their communities. At the board meeting, vocal opposition also was expressed by minority groups who felt the tax was regressive and that the transit authority did not treat minorities fairly. They vowed to oppose the tax.
Yet, the major hurdle will come over the question of the “no sunset” tax itself. This month the tax plan was changed from a tax that would sunset after a time to a tax that would be permanent. The board argued that a permanent tax was needed to keep up maintenance of the rail and bus lines and prepare for 2.3 million new county residents over the next 40 years.
To assure the voters that the tax money would be spent properly, the measure requires re-assessment of the plan every ten years and an added level of administration from a taxpayer oversight committee.
That may not be enough to reassure voters. One individual testified that the seven-member oversight committee did not include any recognized taxpayer advocate. At a community meeting earlier in the week, I heard skepticism expressed about the permanent nature of the tax. A Metro spokesperson at the meeting said the tax can remain until the voters end it—meaning an initiative to bring a halt to the tax that is funding ongoing projects, almost an impossible task.
Los Angeles Supervisor Don Knabe, one of the two no votes to put the plan on the ballot, called the measure a “forever tax.” Because the measure’s provisions allow for a two-thirds vote of the board to change the delineated projects in the plan at any time, Knabe felt there was not enough taxpayer protection.
In urging a yes vote, Metro chairman and county supervisor Mark Ridley-Thomas said the board was not offering perfection but promoting progress.
Now the real battle begins to secure a two-thirds vote. The campaign for the yes side starts with an advantage because the board authorized $10.9 million for an “education” effort.
