3 Business Taxes to Increase

El Segundo council members have adopted a measure that will boost three existing business taxes and raise more than $6 million annually in new revenue.

The ordinance, which three weeks ago had been informally endorsed by voice vote, was approved 3 to 2. Council members Scot Dannen and Jim Clutter, who voted against it, favored imposing a payroll tax on business.

The other council members, including Mayor Carl Jacobson, had initially supported a payroll tax, but changed their minds after representatives of the city’s large aerospace industry lobbied against it. A payroll tax would have meant substantially higher tax bills for some of the city’s major companies, such as Hughes Aircraft, that employ large numbers of well-paid professionals.

El Segundo officials have said that without new revenues, the city is facing a $1.6-million deficit in its $20-million operational budget this year, as well as further postponement of a number of capital improvement projects that it has not been able to afford.

Under the ordinance, the employee tax will double to $120 per worker, and the square-footage tax for companies with more than 5,000 square feet will quadruple to 20 cents. In addition, an acreage tax imposed on some industrial businesses will increase from $300 to $500.