VICA Position on L.A. Business Tax Ills: Toss the Whole System

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VICA Position on L.A. Business Tax Ills: Toss the Whole System

POLITICS

by Howard Fine

After more than five years of supporting efforts to reform the city of L.A.’s labyrinthine business tax code, the Valley Industry and Commerce Association has decided it’s better to throw out the whole thing and start over.

VICA’s board last week voted nearly unanimously to support scrapping the city’s gross receipts tax. Instead, VICA has asked that a task force set up to reform the business tax look for alternative forms of taxing businesses.

“Business owners have been grumbling about the gross receipts tax for years and years,” said Fred Gaines, partner in the Woodland Hills law firm of Gaines & Stacey and this year’s VICA Chairman. “The gross receipts tax is inherently unfair, since it taxes revenues, not profits. Since none of the cities surrounding us have a gross receipts tax, it also puts us at a total competitive disadvantage.”

What’s more, Gaines said, the tax code so daunting that 40 percent of the city’s businesses don’t pay.

L.A. Mayor James Hahn, who already has signed into law several measures reforming the existing business tax system, has not officially taken a position on the VICA proposal. But Jonathan Kevles, head of the Mayor’s Business Team, said he expects a blue-ribbon panel set up two years ago to study business tax reforms to consider alternative ways of taxing business.

Feud Re-Erupts

They claimed to have patched things up four years ago after a spat over Santa Barbara Plaza in the city’s Crenshaw district. But the feud between Earvin “Magic” Johnson and City Councilman Mark Ridley-Thomas never really went away.

Back then, Johnson and Ridley-Thomas clashed over the pace of the plaza’s redevelopment. Johnson also broke ranks from the Ridley-Thomas-supported Coliseum bid for a professional football team and supported a rival bid for a Carson stadium. After a couple of months of sniping, both said they wanted to bury the hatchet. Johnson even came back on board the Santa Barbara Plaza project.

But now, the feud has erupted again.

Ridley-Thomas, who is termed out from his council seat in two years, is running for the state Assembly seat now held by termed-out Rod Wright. Late last month, Johnson very publicly endorsed Ridley-Thomas’ opponent Mike Davis, currently an aide to L.A. County Supervisor Yvonne Brathwaite Burke.

Ken Lombard, Johnson’s business and political point man, said that Ridley-Thomas has been “very egotistical” and has “refused to compromise” on projects in his district. “It’s ‘My way or no way’ with Ridley-Thomas,” Lombard said. “That’s a major reason why the Santa Barbara Plaza project has been stalled for so long.”

Steve Gray Barkan, campaign consultant to Ridley-Thomas, responded:”It’s unfortunate that Mr. Lombard feels that way. The decisions regarding the Santa Barbara Plaza project were not made by the councilman. They were made by the Community Redevelopment Agency in consultation with the local Community Advisory Committee.”

Civic Center Working Group

L.A. City Councilwoman Jan Perry has proposed reviving an intergovernmental working group for the Civic Center area.

The Civic Center Authority as it was called, was set up several decades ago to spur cooperation between the city, county, state and federal governments, who all own and operate buildings in the Civic Center. But the authority was disbanded in the late 1970s. Since then, there have been sporadic attempts to restart the intergovernmental dialogue, but those efforts never turned into anything permanent.

“We need a forum so that each level of government can be kept up to date on what’s going on with projects at other levels of government,” Perry said.

Staff Reporter Howard Fine can be reached at (323) 549-5225, ext. 227 or at

[email protected]

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