Problem: We face $1 Billion in deficits over the next 4 years. We have $10 Billion in unfunded pension obligations. 77% of our general fund currently goes to city salaries and pensions. In 5 years, that number will be 100%. An economic recovery based on a foundation of bad budgeting will not sustain itself. We are already seeing our local government make bad tax choices upon cuts in services because if you're wrapped up in the system, you're indebted to the city hall pension mill and lack the freedom to change things.
Solution: It doesn't matter what we do to spur innovation and create jobs. If we don't get our city's financial house in order, LA will always be working without a stable foundation and each year will be a painful repetition of the past decade. Boom followed by bust. We have got to:
- Overhaul our city's pension system. Our public safety employees (police and fire) will get 90% of their salary beginning at age 50. They may cash out all their unused vacation and sick time in their last year of work and base their pension off that artificially high rate for the rest of their lives. It’s only been like this since 2001. It’s unsustainable and it has to change or our city's credit rating will tank, most city services will be cut, crime will go up, stability will go down, business will go bad, and bankrupt we shall be. In that scenario, no one will even get a pension.
- Make it easier to open a new business in LA by creating physical and virtual “One Stop Permit Centers” where hopeful entrepreneurs can obtain all of the permits they need to open a new business in LA in one place that is driven by an attitude of customer service.
- End the Gross Receipts Tax or "Business Tax" as it is also known as. This is a tax on every penny of revenue taken in by a business even if NO PROFIT is made. This is just nuts. If someone is trying to get a business off the ground and isn't making money yet, what good does it do LA to tax that business into bankruptcy? Wouldn't LA be better off nurturing this business's success and then collecting the sales taxes on the backend instead of bleeding the last drop out of some person who isn't even making a profit?