Mayor Offers a ‘Spiritual’ Tax Break for Businesses

Hoping to send a “spiritual message that this is the place to do business,” Los Angeles Mayor Richard Riordan addressed San Fernando Valley business leaders last week, trying to drum up support for his proposed revision of the city’s aged business tax codes.

One of the main goals of Riordan’s proposal, which must be approved by the City Council, is to simplify and streamline the taxpaying procedure.

The proposal, which the mayor estimates will provide $23 million in tax relief, including some tax break for “93% of the businesses in the city,” he said, would reduce 64 existing tax categories to just eight.

“We’re putting sanity into the tax laws,” added a time-pressed Riordan as he dashed out of a committee meeting of the Valley Industry and Commerce Assn. Under the present regulations “you’d have a nightmare figuring out which of the [tax] categories you’re in,” he said.

Riordan, himself a wealthy businessman, added: “This is a major spiritual statement, that we’re thinking about business. . .”

VICA, the Valley’s business lobbying group, is not expected to take a position on the tax code revision until early next year.

Meanwhile, some Valley business owners said that, at first blush, it appears the changes would be good.

“I think the simplification will make it a lot easier to comply,” said Dale Ma, who owns four Burger King franchises in the Valley.

“I have to have my accountant figure this out now, and I have to pay for that,” said Ma, who attended the lunch meeting. “When I went into business for myself 22 years ago I didn’t know I would be working for the state, federal and local governments, filling out forms.”

Mel Kohn, co-chair of VICA’s local issues committee, which hosted the meeting, applauded the measure’s amnesty provision, under which businesses would be allowed to pay back taxes without penalty in the fall of 2000. Riordan estimated that 40% of businesses in the city are now tax scofflaws.

“This will generate a lot of revenue,” said Kohn. “This brings all these taxpayers onto the tax rolls.”

Riordan briefly took questions after his formal presentation but few of the queries were on the tax plan, which some business owners said they were still reviewing.

Asked about transportation in the Valley and a proposed Valley Transit Zone, Riordan said it was something he wanted to study “long and hard.” In the meantime, he took advantage of the opportunity to take a swipe at efforts to beef up transportation elsewhere in the county.

“You still have a problem of different constituencies fighting for money for things that will probably never happen in our lifetime,” he said.

Riordan singled out efforts in Sacramento to provide money for light rail service to Pasadena. In early October, Gov. Pete Wilson signed a bill that establishes a new transit agency to oversee design and construction of a Pasadena light-rail line.

“Pasadena did a beautiful end run by setting up this joint powers authority,” Riordan said. “The question is, is this good public policy?”