Hamburger joint owner Art Meier is mad.
The proprietor of Art’s Burgers in El Monte, Meier fears losing sales if the city’s voters approve a tax on sugary drinks that would add 12 cents to the cost of a can of Coke.
The emergency move last month by the El Monte City Council to put the measure on the November ballot was unexpected.
If it passes, Meier believes it could result in a nightmare for businesses like his, what with keeping track of how many ounces of taxable Coca-Cola, as opposed to nontaxable Diet Coke, customers get from an open fountain, for example.
“I don’t see this as right, declaring a fiscal emergency just so they can tax us,” Meier said.
He is not alone in his feelings, nor is El Monte the only city taking this tack. Retailers and business owners in Culver City and La Mirada also are facing the prospect of unexpected sales tax hikes if voters approve ballot measures in November. Emergency tax-hike proposals in two other cities – Duarte and Baldwin Park – fell short of making the ballot.
Business reaction to the tax proposals has been surprisingly mixed. Some business owners say they would rather face a higher tax than watch their cities cut more in services. Others oppose the tax hikes, saying they would drive away customers and scare off businesses from opening or locating in their cities.
The slew of proposed tax hikes was brought on by the increasingly dire financial straits cities face. After several years of budget and staff cutbacks as revenues sagged during the long economic slowdown, cities were slammed earlier this year when the state ordered the dissolution of local redevelopment agencies, forcing most cities to turn over millions of dollars each to the state.
In the last two months, three California cities have declared bankruptcy: Stockton, Mammoth Lakes and San Bernardino. In Los Angeles County, some officials in Compton have threatened a bankruptcy filing in coming months, claiming the city will no longer be able to pay its bills. But so far, there’s been no official action toward bankruptcy.
“The redevelopment kill was the accelerant for many of these cities, like a bank calling in a line of credit,” said Larry Kosmont, an economic development consultant in Los Angeles.
The tax hikes have generated the most controversy in El Monte, where the City Council took a double-barrel approach. The council first voted to ask voters to extend an existing temporary half-cent sales tax hike for another five years to mid-2019.
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