City May Delay Permit Fee Hikes; Sewer Bureau Appeals for Funds

Struggling to balance the budget without raising the ire of residents, Los Angeles city officials Wednesday proposed delaying fee increases for police business permits even as other officials announced they are seeking a series of rate raises for sewer services.

At the same time, City Hall is trying to defuse a controversy that erupted this month after officials sent letters to 151,000 businesses and independent contractors ordering them to pay back taxes or face penalties.

Los Angeles officials are pursuing fee increases and the collection of all the business taxes the city is owed, in part to deal with growing budget problems. But with the economy still shaky, taxpayers are not letting their city government get by with boosting fees without letting them hear about it.

“Whenever the economy is sluggish, people tend to be a little more nervous about how they spend their money and how their government spends their money,” said Jon Coupal, president of the Howard Jarvis Taxpayers Assn.

That concern has been conveyed in hundreds of phone calls and letters in recent weeks from businesses and individuals. Some have called to say they had no idea that the work they did from home, whether freelance writing or baby-sitting, constituted a small business. Many pleaded for exemptions and waivers from back taxes.

Others have protested planned fee hikes on 14 police-issued permits, including 1,000% or more for firearms vendors, pawnbrokers and towing operators. A pawnbroker permit, for example, is due to rise from $24 to $2,000.

On Wednesday, City Council members Cindy Miscikowski and Dennis Zine introduced a motion to extend the deadline for paying police permit fees from Dec. 31 to March 31 and use that time to reevaluate whether the fee hikes are justified.

Also during Wednesday’s council meeting, Councilwoman Wendy Greuel called on her colleagues to waive all penalties and interest charges on back taxes owed by individuals and businesses who gross less than $100,000 a year.

“Now more than ever, the city needs to take all necessary steps to protect its businesses and families from excessive tax burdens,” Greuel wrote in a motion distributed to the council.

The council is set to vote Friday on the motions.

Later Wednesday, the City Council heard from the city Sanitation Bureau that the cost of rebuilding the city’s sewer system to meet state and federal mandates may require an increase of 3% per year for four years in the sewer service charge. Bureau manager Lisa Mowery told a council panel that her office has submitted a proposal to the mayor to enact the first 3% fee increase next year.

“We have not had an increase since 1992,” Mowery said.

The bureau went into debt to finance a $1.6-billion revamping of the Hyperion Waste Treatment Plant, and is currently spending $600 million to replace sewer lines throughout the city.

The sewer service charge is about $240 per year for the average-sized house, Mowery said. A 3% fee increase would add 60 cents to the average monthly bill, officials estimated.