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Thursday, Jun 8, 2023

Business Groups at Odds in Taxing Debate-Pro

As business and community leaders, we are keenly aware of the direct correlation between public safety and a robust business climate. We also know the direct relationship between public safety and neighborhoods that are welcoming and wonderful places to live and raise a family. It was not an easy decision for our board of directors to support the half-cent sales tax called for in Proposition A, but as we assessed the importance of a community free of fear, we determined that passing Proposition A was in the best interests of our businesses, our employees and our families. With major budget cuts in all city departments since the start of the Great Recession, more than 70 percent of the city’s general fund budget now goes directly to public safety. Without the new revenue associated with Proposition A, the city will be forced to make substantial cuts in the number of police officers, firefighters and paramedics to protect our businesses, residents and visitors. Los Angeles now has 10,000 sworn city police officers patrolling our streets, the most ever, which is a primary reason that the city’s crime rate is at an all-time low. With a $200 million budget deficit next fiscal year, Police Chief Charlie Beck is projecting a 500-person reduction in the number of police officers and the start of a downward spiral in police protection. We face a similar crisis at the fire department. The city’s response times have been rising slowly. A further reduction in the size of our fire department and the closing of neighborhood fire stations on a rotating basis would have a negative impact on the safety and livability of our business districts and neighborhoods. The City of Los Angeles, along with every one of our businesses and most families, faced major economic challenges during the Great Recession. To survive, our businesses reduced staff, cut operating expenses and discontinued products and services that were non-core or non-profitable. The City of Los Angeles did the same thing. City staffing is at its lowest level since 1989. Besides layoffs, furloughs and a hiring freeze, the city also eliminated police and fire overtime, consolidated services and began a process to privatize non-core services like the zoo and convention center. These reductions were all made against a backdrop of continued population growth and a major effort in Sacramento to reduce the state budget by turning former state responsibilities over to local governments and reducing payments to local governments whenever possible. The chamber was the first business organization in the city to voice its support for former Mayor Richard Riordan’s proposal to take pension reform to the voters because stronger measures are required to assure that more of our tax dollars are used for day-to-day operations and fewer are required for pensions and health insurance for retirees. When our board of directors voted to support Proposition A, we said that pension reform and new revenue for public safety should proceed on parallel tracks because both are essential for the fiscal viability of Los Angeles. Every business, resident and visitor to Los Angeles deserves a safe city. They also deserve a city that is financially sustainable without never-ending tax increases. We must move forward on both fronts at the same time. The mayor, City Council and the unions representing city workers have made some difficult choices during the last five years. The city adopted pension tiers for new firefighters, police officers and civilian employees and most city employees now pay 11 percent of their salaries into their health care and pension fund, up from 6 percent. The chamber sees these reforms as a start in addressing the unsustainable pension and retiree health care costs that were in place at the start of the Great Recession, but much more needs to be done. Proposition A will cost the average Angeleno about 10 cents per day. We believe that this additional price is worth paying for the security and peace of mind that comes with knowing that our public safety officers will be there when our businesses, residents and visitors need them. Yet we cannot and will not allow our elected leaders to believe that the tough decisions have been avoided once Proposition A passes. The chamber will be there at every turn to remind them that this revenue is meant as a one-time tool and part of a larger strategy to avoid more tax increases in the future and ensure a fiscally sound city. Gary Toebben is chief executive of the Los Angeles Area Chamber of Commerce.

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