RICHMAN AIMS TO CUT RECEIPT TAX CANDIDATE SAYS VALLEY WOULD GAIN BUSINESS.

Byline: James Nash Staff Writer

CHATSWORTH - Vowing to make the San Fernando Valley's economy stronger, mayoral candidate Keith Richman on Thursday proposed cutting business taxes by half in a new Valley city and streamlining regulations on business.

Richman said reducing taxes on business would induce companies to move to the Valley or expand, and the resulting growth in revenues would compensate for revenues lost to the tax cut.

The business tax levied on gross receipts yields $360 million a year for Los Angeles, making it the city's fifth-largest source of revenue. Richman said the tax stifles business growth in Los Angeles and discourages businesses from moving to the city. Neighboring cities such as Glendale and Calabasas have no gross-receipts business taxes.

``The city of Los Angeles is the most expensive place to do business in Southern California,'' Richman said at a lunch gathering of the Chatsworth-Porter Ranch Chamber of Commerce. ``The gross receipts tax is a job killer. We need to change it.''

Los Angeles officials are considering revising business tax policies, in part because of long-standing pressure from groups including the Valley Industry and Commerce Association, which endorsed Valley secession this week.

In interviews Thursday, several of the nine other candidates for Valley mayor also endorsed business tax cuts but said they would phase in reductions rather than halve the tax overnight.

``I would propose maybe one-third or one-fourth in the first year,'' candidate Jim Summers said. ``Half might be too drastic in terms of revenues to the city.''

Richman countered that a new Valley city would operate more efficiently than Los Angeles, reducing the need for revenue. He said Los Angeles wastes about $350 million a year of the money it spends in the Valley, basing his calculation on comparisons with other large U.S. cities.

``I'm confident that we can cut the bloated bureaucracy,'' Richman said.

Candidates David Hernandez, Gregory Roberts and Henry Divina also called for phasing out part of the business tax over several years after the new city is financially healthy. Hernandez said he would focus on improving the climate for small businesses, which he called the backbone of a healthy economy.

Leonard Shapiro said he would eliminate the tax, which he said is unfair because it is based on gross receipts instead of profits.

``If they're going to do a business tax, let them do one that's fair,'' Shapiro said.

Bruce Boyer called for eliminating the business tax and 95 percent of Los Angeles' regulations on businesses. The government should regulate business only on fundamental issues of health and workplace safety, Boyer said.

``We need a pro-business city, which equals a pro-job, pro-growth city,'' Boyer said.

Benny Bernal criticized the other candidates' emphasis on taxes, saying business owners need well-educated workers and an environment free of crime. He said he would focus on improving schools and vocational programs in the Valley and on reducing the crime rate.

``Businesses flourish in safe cities,'' Bernal said.

Candidates Mel Wilson and Marc Strassman could not be reached.

In his address to about 40 people at the business group's meeting, Richman also called for additional efforts to lure new firms to the Valley. He said he would create a ``Buy in the Valley'' campaign to keep sales-tax dollars in the new city.

Richman said he also would capitalize on worldwide publicity for the new city by launching a campaign to bring tourists from across the United States and the world.

``I want the world to know that the San Fernando Valley is open for business, very different from the city of Los Angeles,'' Richman said.

At the same time, Richman said, an aggressively pro-business Valley city would spur Los Angeles to reform its own approach to taxing, attracting and retaining businesses, leading to economic growth in the remaining city.