CITY COUNCIL ELECTIONS / 12th DISTRICT : Candidates Clash on Creating Taxes to Balance Budget : Julie Korenstein: The challenger would consider assessments on sports and entertainment, but only after trimming some City Hall expenditures.

If she had been on the Los Angeles City Council in recent days, candidate Julie Korenstein said, she would have “leaned toward” backing two entertainment-related taxes to help balance the city’s budget, but only after slashing some City Hall “luxuries.”

Korenstein’s willingness to rely on new taxes in a budget crunch puts her at odds with Councilman Hal Bernson, the 12th District incumbent she is trying to unseat in Tuesday’s runoff election.

Bernson has voted against any new taxes to close the city’s current $52.7-million budget gap.

Korenstein said in an interview that “under the current circumstances” she would levy a new tax on tickets for sports and entertainment events and another new levy on cable TV users rather than enact the real estate transfer tax that was narrowly adopted Friday by the council to balance its budget.

Her objection to the real estate transfer tax--an exaction that will be levied at a rate of $2.55 on every $500 of assessed value at the sale of real property--is that it will hit middle-class homeowners the hardest, Korenstein said.

The two new taxes Korenstein preferred were considered by the council but dropped amid heavy lobbying by the affected industries when additional revenues were discovered.

But even before she would turn up the tax volume, Korenstein said she would closely look at possible cuts in the City Council’s own $13-million office budget and glaring examples of waste, such as the $500,000 that is reportedly being spent to remodel a suite of rooms at City Hall to make a lounge for lawmakers. The lounge expenditure is “insulting” to taxpayers, she said.

“Hal Bernson has been at City Hall for 12 years. He should know by now what cuts need to be made,” said Korenstein, remarking on how Bernson offered no firm strategy for reducing city expenditures during the just-completed council budget debate.

Besides taking a look at the council’s office budget as a place to look for extra revenue, Korenstein said she would support an indefinite rollback in council members’ salaries.

The $90,680-a-year salary for each council member is “phenomenal,” Korenstein said. “It’s far and above what’s essential. It needs to be undone.”

Because it would take a City Charter amendment to accomplish any change in the current system of setting council salaries, Korenstein advanced the pay cuts as part of a long-range strategy for putting the city’s fiscal house in order.

Bernson counters that it is a hoax for Korenstein, currently a member of the Los Angeles school board, to preach fiscal austerity when her board is now trying to dig its way out of a $350-million budget crisis of its own.

To “a very, very large extent,” the school district’s massive fiscal troubles can be blamed on Korenstein’s 1989 vote to support a three-year contract that gave an 8% pay increase each year to teachers, contended Bernson, who continually notes as well that Korenstein got more than $70,000 in campaign donations from three teachers union groups before casting her vote for their contract.

“A cheap shot to get publicity just before the election” is the way Bernson termed Korenstein’s plan for cutting council salaries. “Our salaries are not excessive when compared to the private sector.”

Korenstein and Bernson also are sharply split over whether the city’s powerful Community Redevelopment Agency should be granted greater authority to use property tax revenues generated from properties in the downtown business district for its own revitalization programs.

Korenstein opposes a plan to raise the $750-million, court-mandated cap on the amount of revenue the Redevelopment Agency can now get in downtown property taxes, while Bernson has joined Mayor Tom Bradley to support raising the cap to $5 billion.

Korenstein claims that the Redevelopment Agency siphons off property tax revenues that could otherwise go to the city’s general fund--to support, for example, the police or fire departments--and that raising the cap only delays the day when those revenues will return to the city.

But it is Bernson’s position that Korenstein is among a small clique of “CRA-haters who don’t understand what the agency is all about.”

In fact, Bernson himself in the late 1970s was among the agency’s biggest critics as a private citizen who sat on a panel to review the Redevelopment Agency’s workings.

“Yeah, I’ve changed my opinions,” Bernson conceded recently. It’s now his view that the CRA has been a valuable tool for bringing development to blighted areas of the city that in turn builds up the city’s tax revenues by stimulating economic activity that helps generate new sales taxes, Bernson said.