As the economic downturn continues to slam Los Angeles businesses, an L.A. city councilman is proposing further reductions in the city’s business tax and changes to the city charter to allow the city to give more generous incentives to attract businesses from elsewhere.

The proposals are part of a legislative package that L.A. City Councilman Greig Smith was set to unveil at Friday morning’s City Council meeting. Smith is the chairman of the council’s jobs, business growth and tax reform committee.

“During these extremely tough economic times, we need to do everything we can to help stimulate small and local businesses that are the backbone of our economy,” Smith said.

One proposal would automatically trigger cuts in the gross receipts tax during times of economic hardship.

The final phase of the current round of business tax cuts kicks in beginning January 2009 with a 3.9 percent decrease, bringing the total cut to 15 percent over four years.

City Attorney Rocky Delgadillo would prepare an amendment to the city charter to allow the mayor and the council to offer incentives to businesses moving to the city, including extending business tax waivers.

Other proposals include creating a consolidated economic development department and increasing funding to spruce up business districts.