L.A.'S DRIVING OUT BUSINESS, JOBS: CITY NEEDS TO ADOPT A MORE FRIENDLY TAX STRUCTURE TO KEEP FIRMS AT HOME.

Byline: Kenneth W. Keller

MY friend Carol just started a new job. She is intelligent, well-spoken and has a solid skill base. Carol networked, attended job fairs, searched the Internet, read the classifieds every day. She focused her resume and cover letters. Carol practiced interviewing. Her mind was in the right place and she wanted to work, and work hard, for a company.

She did all the right things, and it took her over a year to find a job. Sadly, Carol's story isn't an isolated one. In Los Angeles, the unemployment rate remains almost two full percentage points above the national average, meaning close to 300,000 people are out of work. In reality, perhaps 600,000 people are unemployed, because the official number doesn't include those whose unemployment benefits have run out or have taken part-time jobs.

Hundreds of thousands more are working, but are ``underemployed.'' These people have education, skills and talents and want to earn more, contribute more and assume greater responsibility in the workplace, but can't find opportunities to do so.

Why are so many people still out of work and still hurting from a recession that allegedly ended years ago?

In January, the Daily News identified a primary cause of the problem: the city of Los Angeles business tax structure. The city's high tax structure and unfriendly business attitude has organizations relocating to neighboring municipalities, where taxes are lower and jobs are welcomed. It's a zero-sum game, where one city loses, and in most cases the loser is the city of Los Angeles.

But the impact goes much further: The result is an economic recovery lagging far behind the rest of the country. That is why people like Carol have to look so long and so hard, to find suitable work.

City Hall is unfriendly to business and refuses to act until it literally has a ``revenue gun'' put to its head. A recent example was when major health care providers located in Woodland Hills threatened to move unless the City Council reduced taxes and tax rates. Another example was the fiasco regarding home-based business taxes.

What appears to be lacking in City Hall bureaucrats is the understanding that if the business base of the city were expanded, it would mean more tax revenue, not less. It would mean more money for programs, more police officers and newer equipment, more fire stations and personnel, more money for books and longer hours of operations for libraries, more parks and better streets. And, since the Los Angeles Unified School District has a budget based on property taxes, any resulting increase in property values due to an increase in employment would be reflected in more revenue, not less, to improve the school system.

Reducing business taxes across the board will create jobs. When this is done, Los Angeles will be making the statement to business and organizations around the world that ``we want you here.'' Right now, this attitude doesn't exist. When was the last time you heard about a major company moving to Los Angeles? You don't . . . you read about companies leaving Los Angeles.

Price reductions and promotions provide customers an incentive to buy products and services. Why shouldn't the Los Angeles City Council come to the realization that they too, are in a competitive marketplace and that a price reduction (in this case a tax reduction) will result in an increase in volume (more businesses in Los Angeles)?

Unless changes are made in the city's tax structure and rates, unemployment is likely to remain high. The Los Angeles City Council has the authority to put into motion a series of steps that will result in new jobs that will revitalize the region, or they can continue to stick their heads in the sand and maintain the image of a city with an unfriendly business attitude, with a tax structure that is a major cause of high unemployment in this region.

I'm glad for Carol, but I know that there are a lot of people just like her in Los Angeles. I hope that they will all find work soon.