| 20260127 |
LA County |
Los Angeles |
City Council |
Item |
(17)
25-0029
BUDGET AND FINANCE COMMITTEE REPORT relative to potential
ballot measures, options and proposals for the June and November
2026 elections to increase General Fund Tax revenue.
Recommendations for Council action:
1. APPROVE the following general revenue tax options to
Strengthen Fiscal Stability and Preserve Core Services for
placement on the June 2, 2026 Primary Nominating Election
Ballot:
a. Tax Measure: Transient Occupancy Tax; Current
Rate: General Fund – 13 percent, Total – 14 percent; Rate
Increase: 4.0 percent, 2.0 percent; Duration: 4 percent
until December 2028, 2 percent thereafter and permanent;
Annual Estimated Revenue Impact: $89 million, $45
million
b. Tax Measure: Parking Occupancy Tax; Current Rate: 10
percent; Rate Increase: 5.0 percent; Duration: Permanent;
Annual Estimated Revenue Impact: $67 million
c. Tax Measure: Cannabis Business Tax Parity; Current
Rate: Various; Rate Increase: N/A; Duration: Permanent;
Annual Estimated Revenue Impact: Approximately $70
million
2. REQUEST the City Attorney, with the assistance of the City
Administrative Officer (CAO) and Chief Legislative Analyst
(CLA), to prepare and present the necessary Resolutions and
Ordinances for the proposed ballot measures stated above for
the June 2, 2026 Primary Nominating Election Ballot, on or
before January 28, 2026, for Council adoption by no later than
February 11, 2026; and, to include a separate ballot measure to
close the TOT loophole regardless of the amount, as follows:
a. Revise the definitions of tax applicability to explicitly
include Online Travel Company (OTC) charges and
markups as taxable charges.
b. Add a requirement that operators disclose all OTCs
providing payments.
c. Add language clarifying the applicability of TOT to certain
common fees and charges.
d. Add language requiring any organized platform or
marketplace facilitating short-term rental of property within
the City to collect applicable TOT at the time of payment
and remit the money collected to the City.
e. How the City can address enforcement with OTCs, not
just with the home-sharing platforms, as many of whom
are working with the City in good-faith.
3. INSTRUCT the CAO to engage on-call consultants to study the
following four general revenue tax options for consideration as a
measure on the November 3, 2026 Ballot, or future ballots:
​
a. Major Event Tax
b. Shared Ride Tax
c. Vacancy Tax
d. Retail Delivery Fee
4. INSTRUCT the CAO to identify funding up to $100,000 per
study for each of the tax and fee revenue options selected by
the Council for further consideration, excluding any options
selected for the June 2, 2026 Ballot.
5. INSTRUCT the CLA and Office of Finance, with assistance from
the Department of City Planning (DCP), to provide an update to
the next scheduled Budget and Finance Committee and
Planning and Land Use Management (PLUM) Committee on
the status of the pending Vacation Rental Ordinance [Council
file No. (CF) 18-1246], including options to increase the citywide
cap on vacation rentals, changing the geographic unit subject to
concentration caps from Census tracts to community plan areas
and increase said cap, increasing the maximum number of days
per calendar year a vacation rental may be rented, and
implementing a vacation rental application fee to fund
enforcement activities.
6. STRIKE Recommendation No. 7 contained in said CAO report
relative to rescinding the Council action of July 30, 2025, CF 22-
0392-S1, which requests the City Attorney to prepare and
present an ordinance to amend Ordinance No. 188699 relative
to the establishment of a Transportation Communications
Network (TCN) Revenue Fund, that would allocated 75 percent
of TCN Revenue by Council District based on the percentage of
total area (square feet) of operational digital displays located
within each Council District, and 25 percent for citywide
purposes.
Fiscal Impact Statement: The CAO reports that there is no immediate
fiscal impact on the General Fund as a result of the recommendations
in the report; however, recommendations identify potential future
actions that may require additional appropriations through interim
budget actions subject to Mayor and Council approval.
Financial Policies Statement: The CAO reports that the
recommendations in the report comply with the City’s Financial
Policies in that the report is for informational purposes only and does
not commit the City to any future expenditure of funds without further
legislative action. |
January 27, 2026
LA County
Los Angeles
City Council
Item
#17
|