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Union panel opposes proposed sales tax hike in L.A.

An SEIU local official says the plan sprang from closed-door talks with the real estate industry, which steered city leaders away from a tax on property transactions and toward one on general sales.

November 17, 2012|By David Zahniser, Los Angeles Times

One of the largest public employee unions at Los Angeles City Hall handed a potentially costly setback to a plan for a new half-cent sales tax, announcing Friday that its political advisory board opposes the measure.

Service Employees International Union Local 721's political education committee recommended unanimously Thursday night that the group take a position against the tax, which is backed by City Council President Herb Wesson for the March 5 ballot. The council's final vote on that tax is slated for next week.

L.A. leaders frequently rely on unions to deliver financial support for city and county tax measures. Charley Mims, a member of SEIU 721's Committee on Political Education, said it was "pretty obvious" the proposal was generated by Wesson after closed-door talks with the real estate industry, which steered city leaders away from a tax on property transactions and toward one on general sales in the final days of deliberations.

"We're concerned that this was just sprung on us overnight from the backroom and we don't really have the details," he said. "And we're concerned about it being a regressive tax that's really going to be affecting poor and middle-class people more than anybody else — and those are our members."

Hours after SEIU Local 721 made its announcement, Wesson released a letter saying that without the sales tax, the city would need to lay off up to 1,400 employees, 500 of them police officers. Wesson planned to speak with union leaders before they finalized their position on the measure.

"Hopefully I'll be able to have some discussions with them," he said.

SEIU officials signaled that there may not be much time. Bob Schoonover, president of SEIU Local 721, issued a statement Friday saying he agrees with the committee recommendation. Four mayoral candidates also have taken a position against the tax, along with the Valley Industry and Commerce Assn., a business group.

Still, the union committee's announcement came as a surprise to Councilman Paul Krekorian, who heads the council's Budget and Finance Committee and favors the proposal. The tax is expected to generate $215 million a year, enough to erase next year's projected budget shortfall.

"I would hope they would look at this situation and realize that additional cuts impact the people of this city and impact their members," he said. Budget officials at City Hall had spent six months laying the groundwork for a tax increase on real estate sales, one that —- when combined with a levy on parking lots — was expected to generate up to $150 million. But that plan was greeted with fierce opposition by 10 real estate groups, who recommended a half-cent sales tax hike instead.

Harvey Englander, whose lobbying firm represents the real estate industry, told The Times that he had shown Wesson and City Administrative Officer Miguel Santana polling numbers that indicated that a sales tax hike would perform much better on election day than a real estate tax. One poll from the real estate lobby found that 64% of likely voters support or lean in favor of such a tax — well over the majority needed for passage, he said.

Wesson proposed the sales tax hike Oct. 30, one day before the council's vote to draft such measures for the ballot. He downplayed the influence of the real estate lobby, saying he was motivated instead by the success of other sales tax measures in California.

Nevertheless, union members said they should have been consulted on the change of plans.

"We don't want things sprung on us at the last minute and then be told to get in line because this is what's been decided," Mims said.

david.zahniser@latimes.com

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