
Villaraigosa at the L.A. Auto Show in 2010. It's ok, we know you're only smiling because you're daydreaming about the CicLAvia you had ridden in the month before. Photo:Photo by Kevork Djansezian/Getty Images North America via zimbio
Picture this. One day one of the most important political figures in the city stands in front of a major Downtown attraction and announces that train service to this attraction will be increased dramatically in the coming weeks. The next day, a major political figure, flanked by an up-and-coming political star and the City Council President, stands with the head of the local automotive dealer lobbying group and announces a political proposal to end business taxes for car dealerships.
In most parts of the world, that would be a sign of a hot political campaign with two candidates offering competing visions for a city’s transportation future. In Los Angeles, it’s just two days in the life of Mayor Antonio Villaraigosa. While car dealerships are praising the Mayor’s proposal, supporters of green transportation options are puzzled by today’s announcement.
“This city can’t take too many more of Mayor Villaraigosa’s ‘business friendly’ policies,” writes Alex Thompson, President of Bikeside. “The guy extends Metro hours one minute, and decides he wants more car dealerships the next.”
Earlier today, Villaraigosa, Council President Eric Garcetti and Councilman Mitch Englander stood toe-to-toe with the car dealership lobby and announced a plan to end local business taxes for car dealerships operating in the City of Los Angeles. The plan makes sense from a short-term economic point of view. Auto dealers produce substantially more sales tax than business tax. In 2010, auto dealers accounted for only $3.6 million in business tax revenue but $29 million in sales tax revenue.
But the three pols see a potential sales tax boom if they can convince the car dealerships that have fled the city for Glendale, Pasadena, and Beverly Hills to come back. Since 1986, the City of Los Angeles has lost 95 auto dealers. If those 95 dealers were still operating within the City limits, Los Angeles would have an additional $57 million per year in sales tax revenue. In addition to the new tax proposal, Villaraigosa also announced that Beverly Hills Porsche is moving from Beverly Hills to Los Angeles. The Mayor’s Office of Economic and Business Policy helped to persuade Beverly Hills Porsche to come to Los Angeles by pulling department directors together and speeding the permitting process.
“For too long, LA’s business tax has driven auto dealers outside the City limits,” said Villaraigosa. ”It’s time to reform the way we tax auto dealers so that we can bring more jobs and more sales tax to our City.” Read more…