Council Rejects Cable Levy, OKs Tax on Movies, Sports

The City Council on Monday tentatively approved a 10% tax on admissions to most movies, plays and sporting events in Los Angeles, while discarding Mayor Tom Bradley’s proposed cable television tax.

The council’s action capped an unusual one-day budget debate that dismantled key elements of Bradley’s $3.9-billion fiscal plan.

Entertainment and sports executives, taken by surprise by the council’s decision, were expected to wage an even more vigorous battle than the cable industry, which spent nearly $500,000 to take out radio and newspaper ads and send 100,000 pieces of mail to council members in hopes of defeating the mayor’s cable tax proposal.

The council, by the minimum 8-4 vote needed for passage, approved the admissions tax instead of Bradley’s proposed 10% tax on cable television.

“OK, cable guys, you can go home now,” Councilman Richard Alatorre yelled across the council chambers that had been packed for most of the day with cable television executives. “But be back tomorrow after the entertainment guys show up.”

The council has until June 1 to turn over its version of the budget to the mayor, who then has five days to veto it. If Bradley upholds the budget, the admissions tax would be levied on movie tickets, events at Dodger Stadium, the Coliseum, the Sports Arena and dozens of playhouses. A two-thirds City Council vote would be required to override the mayor’s veto.

“I hope everybody understands the phones will be ringing tomorrow,” said Councilman Zev Yaroslavsky, chairman of the Finance and Revenue Committee, which crafted the council’s budget package.

“They’re going to make the cable (television) campaign look like an amateur campaign, and it wasn’t an amateur campaign,” Yaroslavsky said.

Both taxes were proposed to help close a projected $177-million deficit in the budget for the fiscal year beginning July 1.

In the end, the council approved about $100 million in budget cuts and $80 million in new taxes, including about $15 million expected to be raised by the admissions tax. The cable tax would have raised an estimated $12.7 million. The council also retained Bradley’s proposed $52-million real estate transfer fee hike on a 6-6 vote in the closing minutes of the deliberations.

The council restored to the budget about $25 million in programs that Bradley had proposed cutting, including 400 police officer positions, an after-school recreation program for 10,000 latchkey children and funding to keep parks and libraries open.

The admission tax has long been considered a sacred cow in the entertainment capital.

Councilman Joel Wachs joked that the tax was finally adopted after years of consideration because of new ethics laws that ban elected officials from accepting many of the gifts they traditionally enjoyed. “Now that the Dodgers don’t give us free tickets, we’re free to vote for this,” Wachs said.

But in some quarters, the opposition to an admissions tax was profound.

“It works against making Los Angeles the arts capital of the world,” said Councilman Michael Woo.

In announcing his budget proposal just one month ago, Bradley said he would oppose such a tax.

Veteran City Council members acknowledged that they may have to reverse their vote under pressure from the industry and constituents. City Council President John Ferraro warned that there is also a possibility that Bradley will veto the measure.

A spokesman for Bradley said the mayor would have no comment on the budget process until he receives the council’s final draft.

Councilman Hal Bernson, who voted against all tax proposals, predicted that his colleagues will reverse themselves before the admissions measure reaches Bradley’s desk.

“They’re going to get killed tomorrow,” Bernson said. “This isn’t over yet.” Also voting against the measure were Woo, Joy Picus and Joan Milke Flores.

Bob Graziano, the Dodgers’ vice president for finance, like most sports and entertainment executives contacted late Monday, was surprised by the council’s move.

“There often has been talk about an admissions tax,” Graziano said. “Every time the city needs to raise revenue it’s considered.” He said the team “can’t absorb a tax like that. Somehow it has to be factored into the price of tickets.”

Los Angeles Clippers spokesman Mike Williams said the tax would add about $2 to the price of an average Clippers ticket. “We are sensitive to the cost of Clippers basketball tickets,” he said. “We need to learn a lot more about (the tax), but we’ll always strive to keep our prices affordable.”

Graziano noted that the Dodgers already have sold tickets for many games after the tax is scheduled to take effect July 1.

Under the measure, nonprofit institutions such as the Music Center and Hollywood Bowl would be exempt from the tax, as would college sports. accommodations would be made for organizations such as the Dodgers that have made advance sales.

But Flores complained that the plan still suffers from some structural flaws. “They exempted practically all of the high-priced items,” leaving family-oriented events to shoulder the tax burden, she said. “What we need today is to encourage families to go out together.”

Picus complained that the council was “playing favorites. UCLA and USC are not-for-profit, but they are big revenue producers.”

“You could argue that it is unfair,” responded Alatorre, who supported the tax. “But you could argue that it is also unfair to have fewer police on the streets and that it is unfair to close down after-school programs and urban parks.”

Supporters also said they favored the admissions tax over the cable and other taxes because it is more broad-based, would raise money from non-city residents and would be levied on services considered luxuries.

Still, Flores warned, “Tomorrow we may come back and realize what we have done and be looking for an alternative.” She urged the council to consider adopting an $11-a-month trash collection fee instead.

Another alternative debated by council Monday was a 1% city income tax.

But Yaroslavsky said that proposal will prove to be even more unpopular with constituents. “That proposal is dead,” Yaroslavsky quipped, “or the (council) people who vote for it will be.”

Times staff writers Edward J. Boyer and John H. Lee contributed to this story.