EDITORIAL TAXING BUSINESS CITY HALL DRIVES COMPANIES OUT OF L.A.

LOS Angeles City Council members Wendy Greuel and Eric Garcetti are in a rush to beat an Oct. 31 deadline for passing some sort of city business-tax reform. And worthwhile though their effort is, as the debate heats up, it becomes increasingly clear that outrageously high taxes aren't the main reason corporations flee L.A.

City Hall is.

A case in point is an inane controversy that interrupted the reform process last week: Among the provisions that Greuel and Garcetti support is waiving taxes for five years on businesses that relocate from elsewhere. The provision has aroused controversy among the city's powerful labor unions because one potential beneficiary - Overture Services Inc., a Pasadena-based company - is contemplating a move to downtown's Arco Plaza.

And why is that objectionable?

Because Arco Plaza's owner and the security guards are in a fight over unionization.

That's it. Under state and federal law, the guards can become unionized at any time, and whether they do so should, it seems, be up to the guards themselves, based on their perception of the working conditions at Arco Plaza.

But in City Hall, the unions call the shots, so city leaders aren't content to step aside and let private labor disputes take their course. Labor bigwigs complained that Overture shouldn't get the tax break because Arco Plaza might indirectly benefit, and as far as they're concerned, no business should be allowed to prosper unless it's a union shop.

Sadly, that's a position the city leadership seems to embrace. No wonder most businesses opt to locate safely outside L.A. city limits.

Because of the Arco controversy, as well as some legal questions, the city's Ad-Hoc Committee on Business Tax Reform decided to postpone consideration of the policy. So a reform that could affect scores of companies and thousands of employees has been derailed, in no small part because one indirect beneficiary ran afoul of Big Labor.

Once again, City Hall has perpetuated its reputation as being anti-business - a reputation that does far more to drive away companies and jobs than even the business-tax itself. Greuel and Garcetti are trying to change that, but they have their work more than cut out for them.

Until people who put the public interest first are elected to city offices, nothing much is going to change.