Last week’s election results appeared to be heading in the right direction for business interests in the Los Angeles area.
Voters returned business-backed incumbent candidates to the Los Angeles City Council and sided with business positions on most ballot measures.
Nevertheless, the margins in two races crucial for business interests were too close to call at press time. Councilman Bernard Parks’ race was one; an oil extraction tax was another. Separately, in Beverly Hills, an oil extraction tax vigorously opposed by local oil companies went down to defeat.
“The election pretty much went along the lines we wanted,” said David Fleming, founding chair of the Los Angeles County Business Federation.
Indeed, five of the six business-backed incumbents seeking re-election to the Los Angeles City Council won outright last Tuesday, including Paul Krekorian, Tom LaBonge, Tony Cardenas, Herb Wesson and Jose Huizar. And the business-backed candidate for the one open council seat, Mitchell Englander, also won.
But Fleming and other business leaders late last week were reluctant to call a total victory in the council elections, as results for the council race deemed most crucial for business interests were not definitive.
Parks, a business ally and fiscal hawk, was leading but it was not certain that he would end up with more than 50 percent of the votes to avoid a runoff. Parks’ opponent, Forescee Hogan-Rowles, had more than $1.2 million in labor backing and late last week vowed to continue fighting.
“This is the race with the biggest impact on the business community,” said Carol Schatz, chief executive of the Central City Association, which primarily represents downtown business interests.
Other business leaders said privately that if Hogan-Rowles is able to force a runoff, local unions would likely pour in another $3 million to $5 million, which could be enough to defeat Parks. Unions have long targeted Parks for his tough budget stances and his support of business. Labor funding proved the difference in Mark Ridley Thomas’ victory over Parks in a hotly contested county supervisor race in 2008.
Most business-backed candidates also won election to the Los Angeles Unified School District Board of Education, particularly reform-slate incumbent Tamar Galatzan.
In ballot measures, local oil companies breathed a sigh of relief as voters in Beverly Hills rejected a hike in that city’s oil extraction tax and voters in Los Angeles appeared to reject an oil extraction tax of $1.44 per barrel. The 51 percent margin for the Los Angeles tax wasn’t a lock at press time. But oil industry executives were looking at the bright side.
“It looks like these wrong-headed taxes will be defeated,” said Hal Washburn, chief executive of Los Angeles-based Breitburn Energy Partners LP. Breitburn operates a site in Los Angeles just south of Beverly Hills with 50 wells, many of which slant drill underneath that city. If both measures had passed, Breitburn would have been taxed by both cities for the same oil it drew out of the ground.
“If these measures had passed, it would have cost jobs because the investment in oil fields would have gone elsewhere,” he said.
The recent spike in prices at the gas pump probably contributed to the likely defeat of both measures.
Los Angeles voters also sided with business interests on two pension reform measures, one of which reduces pension payouts to future city employees.
“We welcome the voter approval of these pension measures, even if they don’t go nearly far enough,” Fleming said. Business groups have called for more sweeping pension reforms, including reining in benefits and increasing contributions from current employees.
Voters did pass two ballot measures that several business groups opposed: one calling for a ratepayer advocate at the Los Angeles Department of Water & Power and another banning campaign contributions by city contractors. Business groups viewed the ratepayer advocate as an additional layer of bureaucracy and portrayed the contractor contribution ban as discriminatory because it didn’t limit money from unions.
But these setbacks were seen as minor.
“Not all the results went our way, but those that didn’t weren’t as important as the ones that did go our way or appear to be going our way,” said Gary Toebben, chief executive of the Los Angeles Area Chamber of Commerce.
Most business groups took no position on one of the more controversial measures: a 5 percent gross receipts tax on medical marijuana dispensaries.
Meanwhile, in Beverly Hills, the chamber took no position on the hike in the oil extraction tax, which voters defeated. While recognizing the city’s need for additional revenue, the chamber said in a statement that the tax hike would put the city’s oil tax rate above that of surrounding cities.
The Beverly Hills Chamber of Commerce had opposed a parking measure on the ballot. But voters passed Measure 2P, which mandates two-hour free parking at most parking structures within the city. The measure was placed on the ballot by a landlord who wanted to preserve and expand free parking for businesses on Crescent Drive. The chamber board opposed the measure because it restricted the city’s flexibility to adjust parking rates as financial conditions changed.
Chamber officials said they weren’t overly upset.
“We support free parking for our merchants,” said Anita Zusman Eddy, vice president of government and economic development affairs for the chamber.
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