LA. City attorney urges council to axe business tax.

Los Angeles City Attorney Rocky Delgadillo last week became the first citywide elected official to call for the complete elimination of the city's business tax.

Speaking to more than 300 business leaders as part of the Los Angeles Area Chamber of Commerce's annual city lobbying day, Delgadillo said the city's gross receipts tax on businesses was preventing companies from locating in the city and encouraging some companies already here to expand or relocate elsewhere.

"We must drop the business tax, get rid of it completely, if we are to have any hope of attracting significant numbers of new businesses and keeping existing businesses here," Delgadillo said.

As former Mayor Richard Riordan's deputy mayor for economic development, Delgadillo said those years taught him how much of an obstacle the business tax was for companies wanting to locate in Los Angeles. He said that eliminating the business tax would actually result in bringing more tax revenues because more companies would locate in the city.

Delgadillo's comments were greeted with scattered applause from the business leaders. But afterwards, one business lobbyist said he welcomed Delgadillo's leadership on the issue.

"I think it's great. If only the rest of the city's leaders would follow his lead," said Bob Burke, deputy managing director of GCG Rose & Kindel, a business lobbying and consulting firm with offices in Los Angeles and Sacramento.

L.A. Mayor Antonio Villaraigosa also addressed the business leaders, seeking to put to rest any lingering concerns that his union background was antithetical to business concerns. "I hope I have allayed those concerns. I understand that in order to create the wealth we need to make this a great city, we must have a city that opens its doors to business."

Villaraigosa urged the business leaders to support the $1 billion housing bond on the November ballot and also announced that he would accompany the chamber to Washington D.C. early next year to push for "our fair share" of infrastructure funding.

Speaking just before Villaraigosa, L.A. City Council President Eric Garcetti--who helped spearhead the city's current business tax reforms--said that even though his political philosophy is generally not aligned with business, he understood the importance of bringing more businesses into the city.

"I don't come to this business tax issue philosophically, but from a practical standpoint I've realized that by reducing the business tax, we are making the city more attractive for business. Since the reforms, our revenues from the business tax have gone up, not down as many expected."

Garcetti said he is focusing on bringing more affordable housing to the city. That, too, is a roadblock for business."