Good news to report from L.A. City Hall this week: The L.A. City Council introduced a motion that would create the L.A. Area Chamber-proposed Office of Economic Analysis to help answer the question, “How would this law impact jobs?” Enacting this motion will encourage city officials – and the public – to discuss how new policy proposals would affect private sector job creation, business growth and the overall economy here in Los Angeles.
This proposal – based on the model established in San Francisco – would establish a small office of trained economists charged with analyzing legislation that may have a direct impact on the economy. The goal is to provide unbiased, quantifiable information that lawmakers can use to assess or improve legislation and avoid counterproductive policy proposals.
Independence and objectivity are essential to making this new office a success. The Chamber along with our fellow business organizations will be vigilant in ensuring that the new office is structured to be as free from political influence as possible.
The city’s business tax policy towards Internet-based companies would be a perfect topic of review by a new Office of Economic Analysis. Internet-based companies have traditionally been placed in the multimedia tax category. Recently, the city’s Department of Finance notified some of these companies that they are being moved into a higher tax bracket and must now pay up to 500 percent more in gross receipts taxes. One firm’s tax liability jumped from $200,000 to more than $1 million per year.
The Chamber is proposing the city halt all reclassifications until the newly-established Business Tax Advisory Committee completes its work. We also believe that these Internet-based companies should be returned to their original tax category until that process is finished.
The Chamber thanks City Council President Eric Garcetti and Councilmember Greig Smith for introducing the economic analysis motion. We also appreciate the great work of City Controller Wendy Greuel and Mayor Antonio Villaraigosa’s office for their support of this effort. To do this right, it must be a collaborative team effort between city officials and the business community. We are committed to completing this work and delivering Angelenos a smart improvement to our city’s governing process.
Gary Toebben is President & CEO of the Los Angeles Area Chamber of Commerce and writes for Fox & Hounds Daily.