Thursday, February 14, 2013

Raise Los Angeles Sales Tax Rate to 9.5% To Pay For City Employee Raises? I Don't Think So

While California launched the anti-tax movement with the passage of the Proposition 13 limit on property taxes back in the 1970s, the recent passage of Proposition 30 shows that Californians will take a thoughtful approach to selectively increasing taxes.  Consequently, along those lines a potential half cent sales tax increase in the city of Los Angeles  to close a massive budget deficit seemed like it could be a reasonable measure.  That is until today's Los Angeles Times article indicating that most of the revenue raised would be used to fund pay raises for Los Angeles city workers.  Pay raises???  In light of the recent attention on bloated public employee pensions throughout California, we have scheduled pay raises coming up for Los Angeles city workers?

Now it's understandable that city workers would like a pay increase, given that their wages have not gone up recently.  However there is one overriding factor that makes a pay increase ludicrous in these tough financial times.  In the city of Los Angeles, the minimum annual pay for full time city workers is $40,000 a year.  That's minimum pay, not average pay.  (A recent report did show one Los Angeles city employee earning a little under $40,000, but I presume that has since been remedied.)  Not to demean the individual, hard working employees of our city, but I would presume that there are some city of Los Angeles employment positions that would equate to minimum wage jobs in private industry.  Consequently it is alarming to see that minimum pay for city of Los Angeles workers is more than double the minimum wage in private industry.  Indeed, that same report noted window washers working for the city of Los Angeles earning in excess of $50,000 a year.

It is obviously clear why Los Angeles is facing such a budget shortfall, with bloated employee pensions and bloated employee salaries.  So who would come up with the idea of solving the gap by raising the sales tax, as opposed, maybe, to cutting labor costs.  Obviously, only government officials who are beholden to the city public employee unions, and not the taxpayers of the city of Los Angeles.

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