Mayor seeks a 10% cut in phone tax
Mayor Antonio Villaraigosa’s hastily assembled plan for shielding the city’s $270-million telephone utility users tax came into sharper focus Tuesday, as he called on council members to draft a ballot measure reducing the tax from 10% to 9%.
Villaraigosa and six council members said that the best strategy for preserving the tax -- a target of three lawsuits -- was by asking voters to lower it slightly. That approach, in their opinion, will make it easier to win public support.
“Anybody who pays less always feels good,” said Councilman Bill Rosendahl, who favors the tax-cut strategy. “The people will pay less taxes, and we’ll get the stability in our budget.”
Worried that a court may strike down the telephone tax, Villaraigosa and council members have been scrambling to find a way to protect the city services that it pays for.
Villaraigosa obtained a poll that showed such a tax would perform best in the state’s Feb. 5 presidential primary, when voter turnout is expected to be especially high. Several council members said the ballot measure would be billed as tax relief, even though voters would have a chance to eliminate the telephone tax by voting against it.
One longtime political consultant compared the tax-cut strategy to Proposition R, which was approved by Los Angeles voters last year. That measure gave council members a third four-year term even though it was billed as a way of imposing term limits.
“This is a strategy that relies on deliberately keeping important information from voters,” said veteran Democratic consultant Darry Sragow, who won passage of four school bond measures in Los Angeles. “It works so long as there’s not funded, viable opposition. The minute that there’s funded, viable opposition, the strategy falls of its own weight.”
Council members on Tuesday were digesting Villaraigosa’s request for a telephone tax measure, which comes up for its first discussion today.
Under the complex language of Proposition 218, a 1996 statewide initiative governing municipal tax increases, just one council vote against the measure would keep it from reaching the ballot.
That suddenly gives tremendous power to officials such as Councilman Greig Smith, a fiscal conservative who dislikes taxes but also worries that a wrong move will gut the city budget.
“I am morally torn to shreds by it,” said Smith, a Republican who represents the northwest part of the San Fernando Valley.
To ensure the telephone tax will not disappear, council members have been asked by the mayor to declare a “Proposition 218 emergency” -- a legal maneuver that would speed the tax to the ballot, allowing it to pass with a simple majority instead of two-thirds.
One council member privately wondered whether the tax-cut concept was too clever and could backfire on the city once voters realize that a “no” vote could eliminate the tax. Villaraigosa spokesman Matt Szabo said the mayor was not worried.
“The mayor believes the voters of Los Angeles will like the opportunity to reduce their taxes by 10%,” he said.
Villaraigosa’s polling firm, Washington, D.C.-based Feldman Group, found that 54% of 750 residents surveyed in a telephone poll were likely to support the retention of the tax. By comparison, 60% of respondents favored a proposal to decrease the telephone levy slightly.
Councilman Jack Weiss is concerned about the tax-cut strategy, pointing out that a 10% reduction would cost the city $27 million, money that could be spent on counter-terrorism and other public safety initiatives.
Other council members said they were more worried about losing the entire $270 million.
“Whatever gets us out of this hole, I’ll support,” Councilman Ed Reyes said.