A house of cards

first_imgLast week, city leaders agreed to a massive, five-year, 23 percent pay raise for most city workers. And they did it in the face of a slowing economy, cooling real-estate market and the very likely possibility that courts will find they have been taking the public’s money illegally. Simply put, City Hall is desperate. And in that desperation, city leaders are more dangerous than ever, willing to plunge to new depths of deceit to preserve what is a failed government. In recent months, we have seen City Hall hatch one illegal and/or unethical tax-raising scheme after another. In the interest of clarity, let’s examine these schemes one at a time: The phony phone tax City Hall currently collects $270 million a year from a 10 percent tax on all Los Angeles cellular phones and land lines. The tax could be found illegal because of a court case based on the Proposition 218 requirement that two-thirds of voters approve new taxes. With the phone companies challenging the tax in three separate lawsuits, this illicit revenue source could be cut off by next fall. That leaves Mayor Antonio Villaraigosa and the City Council needing to build a budget in the face of a possible enormous loss of revenue. So they have turned, as usual, to the political consultants and operatives, who are as much a part of City Hall as the politicians, to come up with a devious plan: They’ll play fast and loose with the law, while tricking voters into re-establishing the phone tax. First, there’s the legal deception. Even though City Hall has known about the likely demise of the phone tax for months, Villaraigosa hopes to declare its potential elimination an “emergency.” That’s because under Proposition 218, tax hikes must appear on the ballot during regular municipal elections. But “emergency” measures can appear on any ballot. That includes the February presidential primary, during which – Villaraigosa’s pollsters tell him – a slew of Hillary Rodham Clinton and Barack Obama voters will be more likely to vote “yes.” Plus, if the measure is classified as an emergency, it only requires 50 percent voter approval, and not the usual two-thirds. Compounding the deception, Villaraigosa has opted to seek a 9 percent phone tax to replace the 10 percent one that’s on the verge of elimination. That way he can claim the measure is a “tax cut” because it reduces the rate from 10 percent to 9 percent. This is an outrageous distortion. If voters vote “yes,” they won’t be paying 1 percent less on their phone bills, they’ll be paying 9 percent more than if they voted “no” and let the tax die on its own. But with an expensive, special interest-funded campaign, Villaraigosa is confident he can confuse more than half of the voters into doing the wrong thing. He may be right – after all they’ve already polled likely voters and found them easy to deceive. The disguised utility tax Last week, the Department of Water and Power Board of Commissioners signed off on a series of rate increases over the next few years. Ostensibly, the purpose of these hikes is to pay for much-needed infrastructure upgrades. It’s true the DWP has allowed its infrastructure to become obsolete but it’s not the least bit true that it’s ratepayers’ responsibility to pay the bill for the upgrades. As the Daily News revealed, the city has quietly filed a pre-emptive lawsuit to block any public challenge to its usual process of transferring tens of millions of dollars from the Department of Water and Power to the city’s general fund. The money that’s transferred came from ratepayers and represents a profit made by overcharging the public for water and power. Turning it over to City Hall makes it arguably a tax or fee that must be approved by voters. So if the DWP has extra millions to kick into City Hall’s coffers, what business does it have raising water fees? None. Under state law, “fees” must be specifically connected to real costs associated with providing a service. That doesn’t include subsidizing inflated pay raises for City Hall’s bureaucrats. The DWP rate hikes are really just another attempt to raise taxes without getting the public’s approval. That is, they’re an other way to skirt the law and take your money. The bogus gang tax Seizing on rightful public concern about gang violence, city leaders have also come up with plans for another tax hike, a parcel tax, allegedly to fund anti-gang efforts in L.A. But there are some problems with this regressive levy, which would cost every property owner in the city – from a middle-class family struggling to cover its mortgage to the owner of a downtown skyscraper – the same $40 a month. Most notably, no one in City Hall has been able to specify what, exactly, the money would pay for. L.A. already blows nearly $100 million a year on mostly ineffective anti-gang programs, and until we make sense of how that money is spent – it’s currently being audited by Controller Laura Chick – there’s no way to know whether anti-gang efforts need more money at all, let alone how much, or for what purpose. Up until last week, City Councilwoman Janice Hahn, who’s led the effort for the gang tax, said that the crisis is so great we don’t have time to wait for Chick’s audit. The city needs the cash to fight the gang scourge as soon as possible. That’s an odd position to take since City Hall has failed to take the gang problem seriously for decades. What’s even more curious is that Hahn now says she’ll hold off the parcel-tax vote until another election because she doesn’t want it to compete with the phone tax on the February ballot. Apparently the problem isn’t so serious after all. Besides, trying to defraud voters twice at the same time could be beyond the capabilities of even City Hall’s skilled politicos. A pattern and practice The list goes on and on. The City Council has approved two garbage-fee increases in the last two years. The DWP has raised its rates repeatedly. Even golf fees have gone up in City Hall’s relentless pursuit of cash. All the while, we are always told that City Hall needs the money for the best of reasons. “The mayor has a responsibility to protect the revenue that pays for critical services in the city,” Villaraigosa spokesman Matt Szabo says of the mayor’s lawsuit against the people. The city’s chief legislative analyst, Gerry Miller, says maintaining the illegal phone tax is crucial because losing it would “impact library hours, recreation hours. It would impact street paving. It would impact tree trimming.” See, they have no choice but to gouge L.A. residents in one fraudulent and/or illegal tax hike after another. Our “critical services” depend on it. City officials must lie to us and cheat us. It’s for our own good. Never, when justifying their quest for cash, do they mention the gigantic pay hikes to the highest-paid municipal workers and local politicians in the country. Never do they mention the subsidies and giveaways to the downtown developers, who have their taxes waived. Never do they mention the handouts to Hollywood, or City Hall’s sweetheart deals with well-connected contractors and developers. Meanwhile, the city continually fails in providing the most basic services. Police coverage in the San Fernando Valley is down, while gang violence soars. The Fire Department is such a wreck that it – like the LAPD – might soon fall under federal control. The DWP, for all its money, can’t even keep the lights on in a heat wave. The sidewalks go mostly unpaved, and the potholes still form faster than they’re filled. The house is collapsing That brings us to where we are now, with the system ready to collapse. Maintaining such bloat and cronyism isn’t easy. It requires a constant stream of money, one that’s about to dry up. And it will dry up unless city leaders can fool the public once again. If they can get away with their phony phone tax, their disguised utility tax and their bogus gang tax, they will have the cash to put off the day of reckoning for at least a few more years. The voters of Los Angeles must not let that happen. We cannot tolerate such dishonesty and financial recklessness. It’s time we demanded a city government that works for the people of L.A., and not against us. It’s time we demanded an honest accounting of how and where our money is spent. It’s time City Hall and city workers make the efficiencies that are a daily part of life for those of us who pay their bills. It’s time for the house of cards to fall, and for a good, honest leadership to rise in its place.160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! THE house of cards that is Los Angeles City Hall’s corrupt system of shifting money from taxpayers to special interests is collapsing. City leaders’ giveaways are rapidly outpacing their ability to bring in new funds, creating a perilous financial imbalance. For the insiders – the unions, developers, contractors – this is a bona fide crisis. For the rest of us, it’s a great opportunity to remake the city into one that serves the people instead of serving itself. last_img read more