COUNCIL QUESTIONS RIORDAN TAX PLAN; REFORM LEGISLATION SOUGHT ON 3 IDEAS.

Byline: Rick Orlov Daily News Staff Writer

Mayor Richard Riordan's proposal to revamp the city's business tax code ran into difficulty Wednesday with Los Angeles City Council members questioning the extent of reform it represented and who would benefit.

The council did instruct the City Attorney's Office to draft legislation on Riordan's proposal as well as two others presented by council members Jackie Goldberg and Mike Feuer.

Councilman Richard Alatorre, who worked with Riordan on the mayor's plan, urged his colleagues to stick with the proposal, which would reduce business taxes by $23 million and simplify the tax code by going from 64 categories to eight.

``Taxes in the city now are too high,'' Alatorre said. ``The system is too confusing and there is not enough compliance. Now we are in a position to do something about it.''

The council has until March 5 to place its final proposal on the June ballot. Voters must approve the portion that deals with raising taxes on certain groups.

But Goldberg said she hopes the council will adopt her proposal, which seeks to target certain industries for tax incentives, as well as not rush to put anything on the ballot.

``This is not real reform,'' Goldberg said. ``It provides some tax relief, but it's not real reform. What I'm saying is let's step back a second and say we can do better. We can't be goaded into this by the `sky is falling' mentality. The sky won't fall if we take our time and do this right.''

However, Chief Legislative Analyst Ron Deaton told the council that if it didn't get the measure on the June ballot, it could not be put to voters until 2001.

Feuer urged support for his plan, which took many of Riordan's proposals and included a tax break for start-up companies.

Also, Feuer's plan would have less impact on the general fund - reducing revenue by $12.8 million.

``I recognize that much of this is symbolic,'' Feuer said. ``But symbolism in this context does matter.''

Deputy Mayor Rocky Delgadillo said the mayor was trying to address a significant problem in luring and keeping business in the city.

``Each year, Los Angeles is ranked as No. 1 in business taxes,'' Delgadillo said. ``Even with the relief we are proposing, we will still be the highest in the region but it would make us competitive with Santa Monica, Culver City and Beverly Hills.

``We know that 66 percent of the business that leaves Los Angeles goes across the street. From our perspective, the Glendale office market has grown at the expense of downtown Los Angeles.''