Prop. 7 for Vital City Services

Proposition 7 on the Los Angeles city ballot asks voters to extend a 3.75% business surtax that produces $10 million a year for police, fire and other city services.

The surtax was originally imposed at 7.5% in the mid-1980s, amid a decline in business tax receipts. It was halved in 1994 and extended most recently by the City Council in June 1995. As the city’s economy continues to strengthen, the surcharge might become unnecessary, but that time has not arrived yet. We recommend a yes vote.

The overall business tax varies by category of business, ranging from $1 to $6 per $1,000 of gross receipts, and raises $285 million annually for the city. For every dollar paid in business tax, an additional 3.75 cents is paid as a surtax and thus produces only a fraction of a percentage point of total receipts; however, it is important because the money is targeted on vital services. The levy has been in place for more than a decade, and the city, facing a $100-million deficit next year, needs these funds.

The measure comes before voters now because state Proposition 218, passed last fall, requires cities to win approval of a majority of voters before increasing or continuing municipal levies for city services, including general taxes, fees for public services and special property assessments.

Earlier this month, voters in Los Angeles County and the Bay Area affirmed a number of needed tax measures. Voters in the city of Los Angeles have a similar opportunity in the April 8 election and can preserve this $10-million annual boost for city safety services. Vote for Proposition 7.