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Sales Tax Increase for Public Transit to Cost $25 Annually

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Photo by Adan Garcia via Flickr

As an assembly bill that would enable Metro to put a half-cent sales tax increase on November's ballot makes its way towards the state Senate this month, a report released from the Los Angeles County Economic Development Corporation (LAEDC) said that such an increase would only cost people $25 extra per year (if the sales tax rate goes up, it will go from 8.25% to 8.75%, "translating to an extra 50 cents in taxes for every $100 you spend on goods and service," says Road Sage Steve Hymon).

Additionally, the $1 billion raised each year by the tax would pay for transit projects such as the Westside Extension ("Subway to the Sea") and Gold Line Extension while generating $32 billion in local economic activity and creating employment equivalent to 210,000 full-time, year-long jobs spread over a 30-year construction period, says Metro.

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But for all this to happen, three major approvals must happen. First, in order for Metro to be allowed to propose increasing the tax, law must be changed. Therefore, Assemblyman Mike Feuer, who represents parts of Hollywood, the Westside and the Valley, has submitted AB2321 that would enable Metro to put the half-cent sales tax increase on the ballot.

The bill passed the state assembly and now has to move through two senate committees before hitting the senate floor. More than likely, if it is passed, there will be amendments, which will send the bill back to the assembly for approval. After that, it would to Governor Schwarzenegger for his signature.

"I am intensely focused on the passage of the bill," Feuer said in a phone interview. "But I am cautiously optimistic about it's prospect. This is a challenging bill. It is critical to pass it and I take that very seriously."

The second challenge for eventual public transportation funding is for the Metro board to approve placing a measure on November's ballot asking voters to increase the sales tax by a half-cent. They meet at the end of June, which is likely before it even hits the Governor's desk -- therefore, Metro's vote will be contingent on the passage of the bill in Sacramento. But all signs point towards Metro passing the measure, so after they do, it will be a waiting game to see if the first challenge comes through.

The third challenge may as well be the hardest. It will require a two-thirds vote by the people, and, no doubt, there will likely be a fight on both sides. The Howard Jarvis Taxpayers Association has already taken a position against it. "LA County is already a high tax county. We are second in the state, next to Alameda County," Executive Director Kris Vosburgh told LAist. "Taxpayers will get more pain without any gain in return. We already have a one-cent sales tax for transit. Is anyone really satisfied with what their penny is buying?"

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On the other side of things, Feuer says if people want to help the bill get through the Senate committees, contacting the chairs with positive and encouraging letters of support and thank you would be best. Both Senators Alan Lowenthal and Jenny Oropeza are known to be transit friendly.