SACRAMENTO — By a whopping 54-11 margin, the Assembly late Thursday decisively defeated a measure sponsored by the City of Paramount to crack down on swap meet vendors who fail to pay sales taxes.
The Assembly, where members were rushing to adjourn on Friday, cheered as Assembly Speaker Willie Brown (D-San Francisco) announced the vote on the measure by Sen. Ralph C. Dills (D-Gardena) and cracked, "The bill and the author are rejected."
Afterward, Assemblyman Johan Klehs (D-San Leandro), who carried the measure in the Assembly, acknowledged that such lopsided rejection is unusual and declared the bill "deader than a doornail."
The measure directed the state Board of Equalization to target for special enforcement swap meets and flea markets where vendors are suspected of failing to pay sales tax. It also required the operators to pay a fee to cover the cost of state inspectors.
An earlier version of the bill by Dills sought to establish a four-year pilot program focused on vendors just in Paramount and Compton. But, with opposition mounting, Dills amended the bill to apply statewide.
The impetus for the measure came from the City of Paramount, which contended that massive tax income is owed by the vendors at a swap meet operated by Modern Development Co. at the Paramount Drive-In.
However, the company asserted that the bill unfairly singled out its swap meet and was part of a long-running dispute with the city.
Modern Development also operates a weekly newspaper, The News Tribune, which has been at odds with the Paramount City Council. Harry Polgar, the paper's general manager, maintained that the bill was "an attempt to put my newspaper out of business" because it is financially supported by the swap meet.
Polgar declared: "It is our opinion that the vote of the Assembly proves that a local city government cannot get away with attempting to use the state Legislature to accomplish its own . . . thinly disguised plan to destroy any organization."
However, Joe Gonsalves, the city's lobbyist, dismissed the assertion that the measure was aimed at putting the newspaper or the swap meet out of business. He said it was designed as a way to increase tax revenue.
Estimate on Revenue
Paramount City Manager William Holt, who lobbied for the measure's passage, estimated that between $480,000 and $720,000 a year in additional tax revenue could have been collected from swap meets in the city.
Klehs, who carried the measure in the Assembly, argued that cities are losing valuable sales tax revenue. But during the floor debate, the bill ran into opposition from both sides of the aisle.
Assemblyman Ross Johnson (R-La Habra) said that the legislation was unnecessary because the Board of Equalization has the authority to send inspectors to swap meets when it suspects vendors are not paying taxes.
Assemblyman Rusty Areias (D-Los Banos) said the measure was "pretty good" when it was a pilot program for Paramount and Compton but opposed turning it into a potentially costly statewide program.