Seeking another way to acquire additional revenue for the city’s nearly depleted coffers, the Los Angeles City Council voted May 17th to place a measure to tax billboards, digital signs and supergraphics on the November ballot.
City Councilman Herb Wesson, a former state Assembly speaker, sponsored a motion that passed unanimously during a session where the council voted to drastically cut city services and eliminate 761 jobs.
“Throughout the budget, there is a need to be more creative in identifying additional revenue sources that will shore up the city’s finances, as well as gain voter approval,” Wesson wrote in a letter to Councilman Bernard Parks, the chairman of the council’s budget and finance committee, May 7th.
Faced with more than an estimated $222 million deficit, city leaders are searching for new avenues from which to derive funds as the nation battles lessening but continuing financial difficulties. In addition to the elimination of city employee positions, library hours and tree trimming will also be scaled back.
Wesson’s plan, according to city estimates, could raise approximately $50 million.
Dennis Hathaway, a Venice resident, supports the concept of a levy on billboards but is wary of how the initiative will be structured.
“With these things, the devil is always in the details,” said Hathaway, the director of the Coalition to Ban Billboard Blight. “Right now, there are virtually no details about the (proposal).”
The initiative will be drafted by City Attorney Carmen Trutanich’s office.
Westsiders, especially in the 11th District, have seen the number of billboards increase drastically over the last several years. An agreement struck with billboard companies that had city contracts during former City Attorney Rocky Delgadillo’s tenure allowed them to upgrade their traditional signs to digital advertisements.
But Los Angeles city leaders, especially Trutanich, have become more aggressive with outdoor sign firms over the last several months.
Last year, the council passed a moratorium on new billboards as part of a new sign ordinance, which a number of sign companies immediately challenged in court. U.S. District Court Judge Audrey Collins upheld the prohibition outlined in the sign ordinance on September 28th.
The outdoor advertising firms were dealt another setback November 5th when a Los Angeles Superior Court judge struck down the 2006 settlement in a legal action initiated by Santa Monica-based Summitt Media, which was not part of the original sign agreement.
Mayor Antonio Villaraigosa recommended last month an 18 percent reduction to the city attorney’s staff, which prompted an angry e-mail from Jane Usher, Trutanich’s special assistant. Usher blasted the mayor’s proposal, which would have removed $17.5 million from her office’s budget.
“This mayor lacks fiscal foresight. He has other agendas. He simply refuses to spend your money intelligently, to protect us,” Usher wrote, adding that Villaraigosa’s budget showed his “true colors.”
Usher, who handles litigation regarding supergraphics and billboards, told The Argonaut that the cuts could hamper the city’s ability to prosecute billboard scofflaws.
Villaraigosa and Trutanich later reached a preliminary agreement to cut approximately half as much as the mayor had suggested earlier.
Usher could not be reached for comment on the billboard tax proposal.
Del Rey Neighborhood Council President Mark Redick is opposed to Wesson’s plan, calling it a misguided attempt to fix the wrong problem.
“We don’t have a revenue problem in the city; we have a spending problem,” Redick said. “The elephant in the room that nobody wants to talk about is the (city employee) pension issue.”
Villaraigosa and some members of the council have called upon union leaders to assist them in crafting a new benefit and pension system for new city employees.
Redick, a hotel executive, says that he is not opposed to the ballot initiative process but he feels that permitting the electorate to vote on this particular proposed proposition is unwise.
“To refer a billboard tax to the voters is asinine, especially since it appears that this tax is to fund the status quo,” he asserted.
City Councilman Bill Rosendahl, who seconded Wesson’s motion, said it was about time that outdoor advertisers become more financially accountable to the city.
“The blight of billboards is on the city’s radar screen now, that’s in part to our city attorney and my council colleagues,” said Rosendahl, one of the most outspoken members of the council regarding the proliferation of billboards. “It’s time that every existing billboard has a revenue stream attached to it.”
Another Venice resident, David Ewing, has similar concerns about unintended consequences of taxing outdoor advertisements.
“I have mixed feelings about (the proposal),” said Ewing, who joined Hathaway and other Venice and Mar Vista residents in 2008 on a weekend volunteer effort to catalogue the number of outdoor advertising in the 11th District. “The problem with a billboard tax is it makes the city dependent on the billboard companies for revenue.”
Summitt Media and CBS Outdoors, through their representatives, declined to comment on the proposed ballot initiative.
“As far as we know there is not an item to vote on so we can’t comment on the specifics. However, we are looking into it,” Tony Alwin, a spokesman for Clear Channel Communications, answered to a query by The Argonaut on his company’s view of the proposed initiative.
CBS Outdoors and Clear Channel, two of the largest outdoor advertising firms in the nation, have the most signs in the 11th District.
Redick accused Wesson of being beholden to the city’s labor groups.
“Herb Wesson is the cat’s paw of the unions and their lobbyists,” he charged. “He owes his political existence to them.”
If the municipal government wants to generate money for the city coffers, it should sponsor an initiative that targets another agency that has suffered from unfavorable publicity in recent years, Redick said.
“Why not put something on the ballot that would reform the pension system or the Department of Water and Power?” the neighborhood council president asked.
This proposal, which Redick proposed in The Argonaut last month, would revamp the way that DWP board members are appointed and to restructure how the utility functions. The proposal was subsequently discussed publicly by City Councilman Greig Smith.
Hathaway is wary of any ordinance that could permit loopholes for outdoor sign companies to be taxed, yet grant them the ability to install more billboards.
“We would definitely not be in favor of a tax ordinance that would allow more revenue from billboards but give them the right to have more installed,” he said. “The tax would have to be only legally existing billboards without allowing any more.”
“Dennis makes a good point,” the councilman said. “I have confidence that our city attorneys will take this into account as they draft the initiative.”