Valley, L.A. Chamber Chiefs Disagree on Secession Much of the pro-Valley secession mantra has centered on the issue of delivery of city services. So much so, critics have labeled the cityhood movement “a pothole campaign.” But for those who represent the business community and support a breakup, the strains of discontent go far beyond streetlights that don’t work and police cars that never arrive when they’re needed. Endorsements don’t necessarily translate into votes, but the United Chambers of Commerce of the San Fernando Valley is heavily lobbying its members to support its board’s decision to support secession. The 24-member chamber represents roughly 8,000 businesses in the Valley with about 250,000 workers. And among the many business groups rallying to keep the city together is the L.A. Area Chamber of Commerce, with approximately 2,000 members in five different counties. The LAACC came out strongly opposed to secession in early May, long before there were candidates for Valley offices, a ballot initiative or time for anyone to decipher the long-awaited report detailing the fiscal outlook for what could become the sixth largest city in the nation. Below, Russell “Rusty” Hammer, president and CEO of the LAACC, and Bill Powers, chairman of the UCC, restate their groups’ differing positions on a few of the key concerns surrounding the quest for cityhood, particularly as it relates to the business community. – Jacqueline Fox Rusty Hammer Question: The L.A. Area Chamber has said secession would add layers of bureaucracy for those doing business here. Cityhood proponents claim Los Angeles’ business tax and licensing structure is already too complicated. How do you reconcile the differing viewpoints? Answer: We all agree that the city of Los Angeles needs to reform its business licensing process and tax structure and are working to reform the tax, simplify it and reduce it. However, our point concerning secession and it creating additional bureaucracy is that, we think, unquestionably a new city would create new governmental entities with which all business must deal. For example, a company with entities south of Mullholland Drive and in the Valley is now dealing with only one city. If secession passes that same company would be dealing with two cities, and that is why secession creates additional layers. Q: Business leaders on both sides of the hill say the gross receipts tax has to go. Whether voters approve cityhood or not, would your organization push to either reduce or abolish the tax? A: Absolutely. We will continue to push to reduce the city’s burden on businesses in all aspects, whether it’s about the gross receipts tax or not. Los Angeles must be a city that encourages businesses and makes it easy to create jobs and economic activity for everyone. Q: Your chamber maintains that splitting up the city would dilute L.A.’s political clout at the state and federal levels. Yet the Rose Institute report released in September suggests the city already gets shortchanged when it comes to grants and program funding. What evidence do you have that a smaller Los Angeles would lose clout and access to dollars? A: The Rose Institute study contains information that is accurate but is also incomplete. The Rose study only counts revenue given directly to the city of Los Angeles. It doesn’t count the clout of the city in obtaining the revenue for projects in other areas, for example, projects like the Alameda Corridor Project, a new veterans hospital in Long Beach. There is no question that Los Angeles can do better. However, we believe that diluting the congressional delegation and diluting the focus on priorities for Los Angeles will result in less funding, not only to the city but also projects in the Valley as well. Bill Powers Question: The UCC claims secession would lure businesses to a new Valley city, primarily because a new government would abolish the gross receipts tax and streamline the permitting process. What guarantees do voters have that a new government would follow through on those promises? Answer: They would have the guarantees that come from an enlightened populace who now understand how badly city government has failed them. We are reform-minded people. We regard things like the gross receipts tax as public enemy number one to businesses in the city. We look around and we see our neighbors who don’t have it who survive and exceed our expectations on sales tax revenues and we see that it’s doable. It’s adding two and two. Unfortunately, the people who oppose reform are historically the same people who have fed at the public trough. Q: Does the UCC believe post-secession Los Angeles and the new city would lose political clout because population figures would go down? A: No. I believe the exact opposite would happen: The new city’s political influence would go up. As districts are redrawn, their political constituents would be able to consolidate. In terms of grant revenue and grant funds and so on, it’s very clear the city of Los Angeles’ access to grant money has been greater than (city leaders) have taken advantage of. Studies show, if we were our own city, we would be in an excellent position to draw down more grant money. This whole idea that the city has more swank is belied by the fact the city is so bloated it doesn’t know how to wield the power it has, and as a result it’s the citizens that suffer. Q: What else would you like to see a new government do to make the Valley more business-friendly? A: Aside from the management things to provide new revenues after eliminating waste, I’d like to see the Valley city push for cultural facilities. I’d like to see an athletic facility and more police and fire stations. I want to see our streets taken care of when politics isn’t the motive. I want to see trees trimmed when politics aren’t the motive. I want to see the government do what it’s supposed to do: to do what’s right, but not while they are kicking and screaming because they’re afraid they are going to lose power.
