Business Tax Divide Widening Between VICA, L.A. Chamber

POLITICS

by Howard Fine

Call it another manifestation of the north-south split across Mulholland Drive. This time, it’s a rift on business tax reform.

Early this year, the Valley Industry and Commerce Association launched its “Ax the Tax” campaign aimed at eliminating the city of L.A’s gross receipts tax and replacing it with to-be-determined alternatives. VICA tried to get other chambers of commerce on board, including the L.A. Area Chamber of Commerce.

But so far, the L.A. chamber has not jumped on the bandwagon. Last week, the chamber said it’s committed to a tax reform strategy of “collect, cut, and rebate,” or “CC & R.;” “Better collection of the business tax from scofflaws, an across-the-board tax cut for all businesses and a cash rebate to participating businesses is needed,” the chamber said in a policy update.

Nowhere in the update does the chamber mention scrapping the gross receipts tax.

“Almost any other tax one can think of would likely mean that somebody else pays more than they do right now, and that’s not politically palatable,” said chamber president and chief executive Rusty Hammer.

Not so, said Marvin Selter, a Valley-based management consultant who is past chair of VICA and sits on the city’s Business Tax Advisory Committee. “We’re weighing alternatives right now that could reduce the tax burden for business without increasing taxes for anyone else,” he said.

Both sides downplay the notion that this is a deep schism in the business community. Both Hammer and Selter say that the L.A. chamber’s CC & R; proposal is an interim step that can be acted upon in the next few months, while implementing any alternatives could take years.

More Ballot Billions

The state bond measures being drafted for the Nov. 5 ballot seem to be getting bigger and bigger.

Late last month, state Sen. Jim Costa, D-Fresno, the author of the $6 billion bond measure to fund the L.A. to San Jose backbone of a high-speed rail system, amended his bill to increase the authorization to $9 billion.

If this amended bill passes, it would go on the ballot alongside a $13 billion bond measure for new schools and a $2.1 billion housing bond measure.

But all those would be dwarfed by another proposed measure being carried by Assemblymembers Keith Richman, R-Northridge, and Joe Canciamilla, D-Pittsburg. ACA11, which passed the Assembly elections committee last month, would amend the state’s constitution to direct an increasing share of the general fund to infrastructure. In 2004, the share would be 1 percent of the general fund; that would increase to 3.75 percent over 20 years. If this measure were to garner a two-thirds vote in November, it would steer an estimated $112 billion to infrastructure projects over the next 20 years.

Hard-Luck Cases

Talk about working on institutions that have been on the ropes. Gerald Parsky, chairman of L.A.-based Aurora Capital Partners, who was George W. Bush’s California point man during the 2000 presidential campaign, took on what many regarded as a thankless task in trying to reform the state’s moribund Republican party. He pushed a plan to install professional management of the party in an attempt to dilute the influence of the ideological conservative wing. But those reforms hit a snag when Richard Riordan’s gubernatorial campaign imploded and the conservative Bill Simon surged ahead to capture the GOP nomination.

Now, on another front, it’s Parsky’s sister Barbara’s turn. The corporate marketing veteran has just joined Edison International as vice president of corporate communications, where she will be the chief communications and advertising strategist. While Edison may not be on the verge of filing for bankruptcy protection as it was a year ago, it’s still months away from being able to resume buying power for its customers.

Staff reporter Howard Fine can be reached by phone at (323) 549-5225, ext. 227, or by e-mail at

[email protected].