Mayor Signs His Business Tax Cut into Law; Los Angeles Business Council Endorses Mayor's Plan to Increase Minimum Wage
LOS ANGELES -- Mayor Eric Garcetti today signed his business tax cut plan into law and received the endorsement of the influential Los Angeles Business Council for his plan to increase L.A.'s minimum wage.
"Together with the City Council, we are taking a strategic approach to creating jobs and opportunity for Angelenos. Cutting our business tax will entice more businesses to stay, come and hire in L.A., and responsibly raising the minimum wage will inject significant spending into our neighborhood businesses," Mayor Garcetti said. "I'm proud to have the support of the Los Angeles Business Council, which represents such a broad cross-section of L.A. businesses."
"Today, we are taking a significant step to helping our economy grow," said Council President Herb Wesson. "We want to do everything we can to retain and bring business to the City of Los Angeles. We also want to help our residents earn a decent wage, and today I'm pleased we're making progress on both."
"With today's cut to our business tax, we are shattering the myth that Los Angeles is a bad place for business," said Councilmember Paul Krekorian, who chairs the Council's Budget and Finance Committee. "And this is just the first step. We are committed to further reforming our business tax to make it cheaper, more predictable and less arbitrary. Tax reform like this works, and I'm confident it will help grow our economy and create more jobs for Angelenos."
Mayor Garcetti has made job creation and support for businesses a cornerstone of his back to basics agenda. L.A.'s business tax is the highest in the county, making our city more expensive and less attractive to do business in, while the current minimum wage leaves even full-time working people below the poverty line, which is a drag on our overall economic recovery.
The business tax cut represents a 16 percent overall reduction over three years, saving L.A. businesses a total of $90 million. The cut takes the top tax rate from $5.07 per $1,000 in gross receipts to $4.75 in FY 2016, $4.50 in FY 2017, and to $4.25 in FY 2018.
Mayor Garcetti's minimum wage plan would responsibly and gradually raise the wage to $13.25 through 2017. After that, The wage will rise responsibly and gradually each year, through 2017. After that, this common sense measure pegs the minimum wage to the Consumer Price Index so that it keeps pace with inflation.
"Cities do best when everyone can afford to spend into the economy," Mayor Garcetti said. "We are sending a strong signal that L.A. is open for business by cutting taxes, cutting red tape and offering concierge services through my Business Team."
"We applaud Mayor Garcetti and the City Council for cutting the business tax, which will help businesses in our city thrive and create jobs," said Mary Leslie, President and CEO of the Los Angeles Business Council. "And in an unprecedented vote of our entire membership, the Los Angeles Business Council has endorsed Mayor Garcetti's proposal to increase the minimum wage to $13.25 by 2017, as part of a broader economic development strategy for the City of Los Angeles."
Mayor Garcetti has focused on business tax reduction and reform throughout his public service career. As a Councilmember, he authored legislation to enact an across the board cut and elimination of the tax for the majority of L.A. small businesses. He also led the way to eliminate the tax for new Internet companies, a tax cut that was extended this year.