Alaska has mountains, New York has the Statue of Liberty and L. A. has “Batman” roller coasters and big water slides. Now, the County Board of Supervisors, desperate for new revenues to close a yawning budget gap, has cast its hungry eyes on those pearls of L. A.'s tourist industry--theme parks.
The board is proposing a 2% tax on gross receipts from ticket sales at parks such as Universal Studios in the San Fernando Valley and Six Flags Magic Mountain and its new Hurricane Harbor Water Park near Valencia.
The proposed tax would yield about $2.9 million per year for nuts-and-bolts government services such as libraries and hospitals. The county also has proposed increasing the tax on overnight hotel stays from 12% to 14%, raising an additional $1 million per year.
The money would not--given the size of the budget--make a large dent. But from a symbolic point of view, the proposed taxes are a case of one half of L. A.'s split personality catching up with the other: the grim and gritty L. A. seeking cash from the dreamland L. A. of happy tourists and mindless fun.
The major theme parks had little to say about the tax Wednesday but agreed that the county needs the money and made no noisy protest.
But local tourism boosters were less than thrilled by this pinch of reality. “God knows we need to get the budget in line. But is tourism going to be the sacrificial lamb?” asked Tricia Ezell, marketing director for the Hampton Inn in Valencia and chairwoman of the local tourism bureau.
By tapping tourism, the county is squeezing money from one of the few growing sectors of the local economy. Tourism in the San Fernando Valley and elsewhere is emerging as one of the region’s strongest industries, recovering from a slide in the early ‘90s blamed on riots, floods and fires.
Tourists spent $9 billion in Los Angeles County in 1994, said Jack Kyser, chief economist with the Los Angeles County Economic Development Corp. Tourism is now the county’s third-biggest industry--behind management services and health services--and employs about 246,000 people, Kyser said.
Signs of the upswing can be seen in the record traffic at Burbank Airport, high prices for hotel rooms in Santa Clarita, and the brand-new, $35-million Hurricane Harbor attraction at Six Flags Magic Mountain.
“The tourism industry was just starting to rebound, and this certainly will have some effect,” said Steve Lew, senior vice president of MCA Recreation Services, which operates Universal Studios Hollywood.
Industry insiders, however, were cautious about predicting a large impact from a 2% tax on theme park ticket proceeds. When a similar tax was temporarily imposed in 1991, some of the county’s main attractions added it to ticket prices. If they do so again, the cost to customers would increase only slightly--about 60 cents on tickets that sell now for about $30.
And few in the tourist business were inclined to complain a great deal about a tax that would help bail out hospitals, libraries and law enforcement. “We recognize the problem and we understand it’s real, but we wonder why two businesses, out of all the businesses in L. A. County, are singled out,” said Lew, of Universal Studios.
Lew said he worries that higher prices at Universal Studios would put the theme park at a competitive disadvantage with Disneyland and other regional attractions outside Los Angeles County. One adult ticket at Universal Studios costs $33 now, contrasted with $31 at Magic Mountain, $33 at Disneyland in Orange County, $28.95 for Sea World of California in San Diego, and $16 for Six Flags Hurricane Harbor.
Except for Universal City, the theme parks do not reveal attendance figures, but estimates are available from industry journals and associations.
Magic Mountain, which observers say may have attracted 3.5 million visitors in 1994, has said 1995 attendance is up 7% this year. A Disneyland spokesman said attendance there is at a three-year high. But Universal’s annual attendance of about 4.5 to 5 million is running at about the same rate this year as 1994, Lew said.
Likewise, Ezell, of the Hampton Inn, acknowledged that even the 2% increase in the bed tax, termed the “transient occupancy tax” in budget parlance, would probably exert little impact on overall hotel business. At the most, customers would probably be momentarily surprised upon receiving their slightly higher bill.
Delta Uyenoyama, management analyst for the county, said an amusement park business tax similar to the one being proposed was levied temporarily during a budget crunch in 1991, but not renewed. It’s been resuscitated, he said, because the current crisis facing the county is dire, and new revenue sources must be found.
Public hearings on the tax are scheduled by the Board of Supervisors on Aug. 10 and 24, when supervisors are slated to act on it.
If no new money is found, the county has said it would close six health-care centers and lay off 4,800 county workers, including prosecutors and other law enforcement personnel.
Piling into a car at a Wendy’s restaurant near the entrance to the two Six Flags parks Wednesday, Laura Torres, 25, of San Fernando and her family agreed that they would not mind paying an extra couple of dollars for their visits to Magic Mountain and the newly opened Hurricane Harbor Water Park.
“It is expensive,” Torres said, referring to the general admission price of $31. “But you can find coupons for $10 discounts everywhere, so I wouldn’t mind.”
But another Magic Mountain-goer, Dave Bertrand, 34, of Simi Valley, said he would not want to see the park bear the burden of the county’s budget woes. “Magic Mountain is for kids and families. If you raise it, it hurts them,” he said.
“Thirty-one dollars to get in. That’s a lot, isn’t it?”
Leovy is a Times staff writer and Becker a special correspondent.