City officials are warning taxpayers that the budget they put together is a bit heavy on the spending side. It seems city accountants figure they’ll need more than a quarter billion dollars more than they have planned for to pay the bills next year, according to the Los Angeles Times
Los Angeles officials are “warning” taxpayers that they may collect the monies they need from them in tax hikes and get the remainder in cutbacks and by altering city worker’s pension plans, including the eligibility age for retirement.
Actually, according to the Times report, an “overhaul of the employee pension system will be needed to keep the city afloat.”
The L.A. City Council is preparing a round of tax increases
to be put on the March ballot along with an amendment that would raise the retirement age for new employees and tinker with the pension plan to squeeze out more cash.
Currently, Antonio Villaraigosa
is mayor of L.A. and resides at the Mayor's Mansion, Getty House, located in Windsor Square in Hancock Park.
Business leaders say a proposal that nearly doubles city taxes on property sales would slow economic development and further depress the region’s cratered housing market.
According to the Times
, James Ward Litz of the Beverly Hills/Greater Los Angeles Assn. of Realtors said the change would increase the cost of a home and put L.A. at a “‘competitive disadvantage”" with other cities.
For one example, a proposed “documentary transfer tax” would jump to $9 for every $1,000 of the property's sale value, or $4,500 on a $500,000 home.
If approved, L.A. will host the highest such tax in the surrounding area, For instance, there is a 55-cents-per-$1,000 rate charged in Glendale, West Hollywood, Burbank and Beverly Hills.
The DTT tax hike would put an estimated additional $100 million in city coffers.
While the business community and unions may be taken aback by the city’s proposals, this week the council voted 12 to 1 to consider the tax hikes, pension cutbacks and other increases, including raising the parking occupancy tax
to 15% from 10%.
Regarding city workers, the retirement age for newly hired civilian employees in L.A. would jump from current age 60, to 67, and to 55 for employees with at least 30 years seniority.
The proposal caps pensions for new civilian employees at 75% of their salary. Over 30 years, the pension changes would bring in another $3 billion, according to the Times report.
Meanwhile, former Mayor Richard Riordan
and other business leaders say the city should freeze the pay of firefighter and police officers whose retirement costs exceed 25% of their salaries. Instead, the council plans to make such changes applicable to new hires only.