Windfall Ends Need for Cable, Ticket Taxes : Budget: City will receive $14.5 million more than expected from county property tax. Mayor, council were at odds over which new levy to approve.

The city of Los Angeles will reap an unexpected $14.5 million in additional property taxes in the coming year, eliminating the need for two controversial new taxes proposed to help balance a record $3.9-billion budget, officials said Tuesday.

“It is clear to me now that we will not have to raise an admissions tax or a cable television tax, and I will recommend to the council next week that we do not impose such a tax,” said Councilman Zev Yaroslavsky, chairman of the council’s budget-writing team.

The City Council and Mayor Tom Bradley have been at odds over which of two new taxes to impose to raise the final $12 million to $15 million necessary to balance the $3.9-billion budget for fiscal 1991-92 that begins July 1. The mayor had proposed a $12.7-million tax on cable television viewers and the council favored a $15-million tax on admissions to entertainment and sporting events.

“This should simplify budget debate substantially,” said Keith Comrie, city administrative officer. “This really solves the significant problems of which of those two taxes were necessary for that final $12 million or so.”

The $14-million windfall was found in the county assessor’s revised estimates of property tax revenues for the city. In most budget years, there are such revisions.

The mayor’s office was informed of the new revenue projection on Tuesday. Spokesman Bill Chandler said, “It’s indeed good news for the city during an especially difficult budget year. The mayor does not propose taxes on a whim. The mayor’s budget was based on revenue projections” available at the time.

Bradley has vowed to veto the entertainment tax that the council approved.

Yaroslavsky said he hopes the additional funds will “end the uncertainty over the budget,” which he said has been one of the most difficult to balance in recent years. With the city facing a projected deficit of $177 million, the council and mayor cut about $100 million from spending requests and sought to make up the rest through a variety of taxes.

Still to be resolved is the fate of one of those taxes, the $52.7-million increase in the city’s real estate transfer fee that was proposed by the mayor and tentatively upheld by a deadlocked City Council in a 6-6 vote earlier this month. Because the tax already is a part of Bradley’s tax proposal, opponents would need a majority vote to remove it.

Since the council’s first vote on the measure, a coalition of business, real estate and anti-tax groups has turned up the heat in an effort to overturn it.

Several council members said they are receiving between 100 and 200 calls a day from constituents opposed to the tax that would add $900 to the cost of selling a $200,000 house.

The city’s two major boards of realtors have been joined by the Building Industry Assn., the United Chambers of Commerce of the San Fernando Valley, the Apartment Assn. of Greater Los Angeles, the Los Angeles Taxpayers Assn. and others in opposing the tax.

Already the council had been under fire from the cable television and entertainment industries, which fought proposed taxes on their activities. If the real estate tax is overturned, the city’s budget would be seriously out of balance with the deadline for completion just two weeks away.

Yaroslavsky acknowledged that the council may not approve the real estate tax when it comes back for a final vote. “I still think it’s an open question where the council is going to be on the real estate tax,” Yaroslavsky said. “But frankly, I don’t think there’s going to be much of a choice.”

To eliminate the tax, Yaroslavsky said, would mean “layoffs, the closure of parks and libraries and 360 less cops on the street.”

Councilman Hal Bernson, who is leading the opposition to the tax on the council, said he believes cuts can be made in non-essential services. If that means layoffs in some departments, “so be it,” he said.

The city’s financial situation could be improved in the coming year, Controller Rick Tuttle said Tuesday, by stricter enforcement of the city business tax. Tuttle said his staff has found that more than half of Los Angeles’ building contractors are not paying their annual business taxes, robbing the city of at least $3.6 million--and potentially millions more--annually.

“These are tax evaders, freeloaders,” Tuttle said as he proposed an ordinance that would deny a building permit to any contractor who does not have a current business license.

Tuttle recommended that the Department of Building and Safety and the city clerk mount a cooperative effort to verify that contractors have business licenses and that building inspectors begin checking for tax licenses as part of their routine rounds.

Because existing law allows the city to collect back taxes for three years and levy a fine and interest on the unpaid amounts, the city controller’s find could bring in a windfall of $11 million to $15 million the first year, Tuttle said.