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State of City: Mayor Wants Permanent Tax Hike

Los Angeles Mayor Antonio Villaraigosa wants to eliminate the expiration date for Measure R, a temporary 2008 sales tax increase, to support transportation projects.

Mayor Antonio Villaraigosa made transportation the main focus of his second to last State of the City speech Wednesday, calling for a ballot measure in November that would turn a temporary 2008 sales tax increase for transportation projects into a permanent one, a move he said would create jobs and allow Angelenos to "measure traffic relief in years, not generations."

At a time when the city's unemployment rate remains at 13.3 percent, Villaraigosa also called for a nonprofit economic development agency with city funds to create a strategy for economic growth.

"We are missing critical opportunities to tap the full potential of our economic assets," Villaraigosa said during a 30-minute speech to an audience at Paramount Studios in Hollywood. "We need an engine of economic development that can target City Hall's woeful lack of customer focus."

Villaraigosa said his proposed budget to be released Friday will include $2.5 million to start the new economic development agency, in part, to replace the city's former property tax-funded redevelopment authority. Gov. Jerry Brown last year pushed through legislation that disbanded about 400 redevelopment agencies in an attempt to close the state's budget gap and fund public schools.

The transportation and economic development proposals, Villaraigosa said, would not be effective unless the city balances its budget and eliminates a structural deficit predicted to grow to $427 million by 2014. Villaraigosa said his budget will propose changes to the city's civilian pension plan and ask city workers to pay more for their health benefits.

Villaraigosa's budget proposal is also expected to include layoffs and a call for workers to defer scheduled 5 percent pay raises set to begin taking effect in July.

Art Sweatman, a tree-trimmer for the city for 15 years, said Villaraigosa had mismanaged the city's finances, and called on budget officials to focus on uncollected revenues.

"We've stepped up to the plate the last couple of years, deferred our cost of living increases and contributed more to our retirement health care," Sweatman said.

As he has in past State of the City addresses, Villaraigosa used the speech to tout a list of his achievements, which he said included the ongoing renovation of the Tom Bradley International Terminal at Los Angeles International Airport, efforts to green the Port of Los Angeles and a series of steps to make the city more business friendly.

Villaraigosa also noted this month's 20th anniversary of the Los Angeles riots when "neighborhoods burned, 53 people died, thousands more were bruised and battered, smoke hung over the city, burning eyes and searing our soul."

Villaraigosa said Los Angeles is a better city today, in large part because of an improved relationship between residents and the Los Angeles Police Department.

"We now have a force that reflects the many different communities it serves," Villaraigosa said. "Somewhere in the heavens, Tom Bradley is smiling today."

City Council Budget and Finance Committee Chair Paul Krekorian applauded Villaraigosa vision to use transportation projects to create jobs. However, Krekorian said, "we must also ensure that the city delivers its core services to the people efficiently and cost-effectively."

Krekorian said he looked forward to working with Villaraigosa "to produce a balanced budget that reflects the values of our city and the priorities of its residents."

Villaraigosa's proposal to extend Measure R indefinitely is likely to create the most debate in coming months.

Slightly more than two-thirds of county voters agreed in 2008 to increase the sales tax by a half-cent to fund 12 major transit projects over 30 years, including a subway to the Westside, a downtown subway connector and an extension of the Gold Line light rail into the San Gabriel Valley.

Villaraigosa said he would ask voters to eliminate the scheduled 2039 expiration of the Measure R sales tax. Doing so would allow the Metropolitan Transportation Authority to borrow against future revenues to finish key rail and highway projects in 10 years instead of 30, Villaraigosa said.

"By extending Measure R, we'll create jobs, we'll relieve traffic congestion, we'll complete all of the rail projects in one decade, instead of three," Villaraigosa said.

"In the end, it will bring us closer to the vision of Los Angeles that Mayor Tom Bradley spent his whole life fighting for, a vision of the most diverse city in the world drawn closer together by a world class transit system."

Accelerating the projects would make them cheaper by allowing the city to lock in low interest rates on borrowing and taking advantage of current low construction costs, Sanders said.

A ballot measure to extend Measure R indefinitely would require approval by the Metro Board of Directors, followed by a two-thirds vote by Los Angeles County voters.

It would also require an amendment to state law that bars taxes for transportation from being limited to 30 years. Assemblyman Mike Feuer, who is running for City Attorney, has introduced a bill that would change the law. It received approval from an Assembly transportation committee.

Mayoral candidate, attorney and conservative radio host Kevin James, opposed the plan, calling it job creation on the backs of taxpayers. The city needs to improve its transportation infrastructure, but "when the mayor goes back and asks the voters to make (the tax) permanent, then the message is being sent that the initial tax was either insufficient or squandered," James said.

"Until we build a level of credibility and rapport with our voters, I don't think this is going to pass."

Other mayoral candidates—City Councilman Eric Garcetti and City Controller Wendy Greuel—expressed varying degrees of support for the ballot measure.

Garcetti was fully supportive.

"People need jobs," Garcetti said. "L.A. needs infrastructure repairs, and labor costs are low right now. So we need action now, and extending Measure R is a way to bring it."

Greuel's support was more tepid. She called herself "cautiously optimistic" about the plan, saying she wanted to gauge the public's support for the plan.

"Clearly there's a desperate need for a transportation system and those infrastructure improvements," Greuel said. "People want traffic relief now. This infrastructure is important to the future of the city."

However, Greuel said, she wants to see details on how the money will be spent to ensure there will be funds to operate the new transit projects.

Villaraigosa closed his speech by touching on education, which he does not have direct authority over. Villaraigosa described successes of the Los Angeles Unified School District against a backdrop of severe budget cuts. He said the number of LAUSD students meeting a state testing goal has more than doubled since he took office. The number of charter schools in the district has also doubled, Villaraigosa said.

Villaraigosa urged residents not to be "discouraged by critics or distracted by cynics."

"We can put people back to work," Villaraigosa said. "We can make the promise of a free and quality public education real in the second largest city in the United States. We can overcome our city's tragic legacy of discrimination.

"We can be safer than ever. We can be a closer city. We can be a more connected city."

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