Flores’ Aide Claims Dirty Politics : Los Angeles Proposal for New Marina Tax Finding Little Support at Harbor

Los Angeles city officials are considering a new business tax on marinas in Los Angeles Harbor to cover revenues lost because a previous marina tax was deemed invalid.

But the proposal has drawn the opposition of boaters, marina operators, the Los Angeles Harbor Department and Councilwoman Joan Milke Flores, whose 15th District includes all the marinas that would be affected by the tax.

“We pay taxes every time we turn around,” said Ann Jones, an accountant for the 135-slip Colonial Yacht Anchorage in Wilmington, which would have to pay about $400 a year under the proposed tax. “I don’t think another tax would be fair.”

An aide to Flores said in an interview that the proposed tax smacks of political retribution, saying it originated with council members Zev Yaroslavsky and Joy Picus. Flores ran against Picus for council president early this month, with Yaroslavsky supporting Picus. Both Flores and Picus fell one vote short of victory and Councilman John Ferraro was elected.

“Need I remind you that Joy Picus ran against Joan Flores for president of the council, and need I remind you that all marinas in the City of Los Angeles are in the 15th District,” said Lewis H. Chaney, Flores’ business liaison, who last week asked Yaroslavsky and Picus to delay consideration of the new tax. “I can’t help but feel this is a deliberate thing.”

Yaroslavsky and Picus, sitting as the council’s Finance and Revenue Committee, rejected Chaney’s request and voted to forward the tax proposal to the full City Council. Alisa Katz, Yaroslavsky’s chief deputy, denied that the committee action was politically motivated.

“Although they requested time to better prepare themselves, they were not unprepared for this meeting,” Katz said. “There was a feeling that the committee should go ahead and that further discussion and presentations could be given to the City Council.”

No Politics Involved

Susan Pasternak, a spokeswoman for Picus, agreed that politics had nothing to do with the proposed marina tax.

“I can’t see that as a reason at all,” Pasternak said. “The two women (Picus and Flores) have a good working relationship.”

The proposed tax would require businesses that rent boat slips or moorings to pay an assessment based on the total rent they collect each year.

Under the plan, businesses would pay $18.75 for the first $15,000 collected and $1.25 for each additional $1,000. It would affect the 17 privately operated marinas in the harbor, but it would not include the city’s largest marina, Cabrillo Marina, which is run by the Harbor Department.

The city clerk’s office estimates that the tax would generate $8,000 a year, about half the amount the city had been collecting from the invalidated tax.

That tax was found to be invalid in 1971 because the city’s business tax provisions did not technically include slip rentals, Assistant City Atty. Ronald Tuller said. Because of “communication problems and some misunderstanding,” he said, the city clerk’s office continued to collect it through last year.

Katz said the proposed new tax was brought to the Finance and Revenue Committee by the city clerk’s office. She said neither Yaroslavsky nor Picus came up with the idea.

“The business tax attempts to tax every kind of business in the City of Los Angeles,” Katz said. “There are always loopholes and the city clerk is always trying to plug the loopholes.”

Don DeBord, chief of the city clerk’s tax permit division, said his office was directed by the committee to look into taxing the marinas last month. DeBord said the inquiry was prompted by requests from several marinas seeking refunds of the old tax.

“We are required to take all refund claims over $5,000 to the finance committee,” DeBord said. “One of them came up, and we were directed by the committee to review the situation.”

The city has received requests from 15 marinas for a total of $40,801 in refunds from the invalid tax, which had been collected for years, city officials said. Under law, the city is required to refund only taxes collected during the past three years.

Bernie Evans, chief deputy to Councilwoman Flores, said Flores’ office has had an ongoing disagreement with the Finance and Revenue Committee over how much maritime-related industries should be taxed--a disagreement that predates Yaroslavsky’s and Picus’ tenure on the committee.

Evans said that with council committee assignments expected to change soon, Yaroslavsky took a “last shot” at getting a maritime tax through the City Council. “I think he wanted to clear the deck, so to speak,” he said.

Katz, Yaroslavsky’s deputy, said the proposed tax was scheduled to go to the City Council next Tuesday, but she said it will be delayed so the city clerk’s office can check into ways to tax the 1,100 slips at the Harbor Department’s Cabrillo Marina as well.

Under law, the city cannot tax a city agency, but city officials said they probably can tax each boat owner who rents a slip at the marina. Without some sort of assessment on boats at Cabrillo Marina, some boaters and marina operators said the Harbor Department would enjoy a competitive edge over the privately operated marinas.

Tuller, the assistant city attorney who has been working with the city clerk’s office on the marina tax proposal, said any tax on tenants at Cabrillo Marina would also be based on total rent paid and would be equivalent to the tax proposed for the private marina operators.

But Chaney, Flores’ business aide, said a Cabrillo Marina tenants’ tax would still be unfair because the Harbor Department, as operator of the marina, would avoid paying the tax.

“The tenant may have to pay, but the port wouldn’t be paying a thing,” Chaney said. “It creates an unfair competitive advantage for the Harbor Department.”

Even so, Harbor Department officials said, they do not support any new tax on privately operated marinas or tenants of the Cabrillo Marina. Port spokeswoman Julia Nagano said the department has gone on record as opposed to the tax proposal, in part because the department would be responsible for collecting the taxes for the city.

“There is a question as to whether the manpower requirements would outweigh the amount collected,” Nagano said.

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