A week after California voters approved a quarter-cent temporary sales tax hike to patch holes in state education funding, the Los Angeles City Council indicated it wants local residents to pay a levy twice as big.
The council voted 10-4 Tuesday to give preliminary approval for a March 2013 ballot measure that would ask voters for a half-cent local sales tax that would bring in an estimated $200 million-plus per year.
If approved by a majority of voters, the measure would give LA a new sales tax rate of 9.75 percent.
Backers said the tax was necessary to address ongoing revenue shortfalls in Los Angeles, which has seen several years of budget cuts. The city faces a projected $216 million budget deficit next year.
"What it will do is give us $220 million that we desperately need," Councilman Bill Rosendahl said.
Council President Herb Wesson, a strong backer of the tax, said that without it, the city is likely to cut public safety positions.
A report from a consultant to the city (PDF) found the half-cent tax would bring in $208 million to $215 million, but would also depress sales by as much as 1.3 percent.
On Tuesday, the council also voted against three other proposed ballot measures that would have hiked taxes on parking, property and real estate sales.
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Because the sales tax measure failed to get unanimous support, the council must vote on it again – and pass it by at least 10 ayes – for the item to appear on the March 5 ballot.
The tax is expected to generate between $208 million and $215 million, according to an analysis by Beacon Economics, commissioned by the City Administrative Officer.
Council members Eric Garcetti and Jan Perry, who are both running for mayor, voted against the tax increase, saying it would turn off the business community and stymie economic growth.
Council members Mitch Englander and Dennis Zine also opposed the tax.
In a letter to the council, Mayor Antonio Villaraigosa noted the passage of Prop 30 -- the statewide ballot measure that includes a four-year quarter-cent sales tax and temporary income tax hike on those making more than $250,000 -- saying it showed California voters want a balance of cuts and new revenues to deal with fiscal problems.
The city, he said, had relied mostly on spending cuts – including the elimination of 5,000 positions, among other cuts – instead of finding new revenue.
"Very few responsible spending cuts remain on the table," Villaraigosa wrote.
But the mayor said he would not support the sales tax hike without multiple reforms, including a new operating model for the LA Zoo, new management structure for the LA Convention Center, and the creation of a new economic development entity.
Villaraigosa also said that for the tax to garner his support, the council must maintain a commitment to police hiring while moving forward with the already planned elimination of 209 municipal jobs.
The item will return to council next week.
City News Service and NBC4's Conan Nolan contributed to this article.
