Fighting the phone tax
Are the neighborhood councils' problems with Proposition S the start of a revolt against City Hall?
With the faltering economy doubling its budget shortfall, the city of Los Angeles cannot afford to lose any tax revenue, which is why a telephone users utility tax, Proposition S, will appear on Tuesday's ballot.
Many neighborhood council members across the city oppose the tax. Their opposition is less about Proposition S than an inchoate cry in the dark against what many perceive as City Hall's relentless drive to subsidize dense developments, particularly downtown, and to provide lavish contracts for city workers while largely ignoring the needs of neighborhoods and the overall L.A. economy.
The defeat of the telephone tax measure, which is unlikely, would not end subsidies for developers or force the city to reopen union contracts. But a grass-roots movement spearheaded by neighborhood councils could blunt the city's attempts to hand out new subsidies, or expand existing ones, on top of the hundreds of millions of dollars it has already given to powerful developers.
The city has taxed telephone services since 1967, and as wireless technology evolved, it extended the tax to cellphones, among other modern services. Wireless companies objected and sued the city to block the cellphone tax. With the courts siding with the companies, Mayor Antonio Villaraigosa pressed for the ballot measure that would keep the tax alive and bring in $243 million.
Proposition S has the support of L.A.'s highest officials, and the campaign for it has the financial backing of the city's unions and big developers.
Greg Nelson, former director of the city's Department of Neighborhood Councils, sees something potentially politically far-reaching in the councils' opposition to the telephone tax. He says that most of the members of the councils cite larger issues for their coolness toward it. Most notably, he says, they object to the city's willingness to pay ever-larger wages and benefits to its workers -- labor costs have surged 53% since 2000 -- and to hand out subsidies to downtown developers.
Jill Barad, president of the Sherman Oaks Neighborhood Council and founder of the Valley Alliance of Neighborhood Councils, echoed Nelson. "There's tremendous distrust of the city" and "a sense that the city is controlled by downtown power-brokers," she said.
