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LA voters support cannabis tax proposal, split on hotel tax changes; proposed half-cent LA County sales tax for health care falling short
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os Angeles voters appeared to be backing a proposal to impose taxes on unlicensed cannabis businesses operating in the city Wednesday, while appearing divided on measures aimed at updating the city’s so-called hotel tax. With votes still being counted, Measure CB was leading with 277,346 votes, or 71.09%, compared to 112,814 votes, or 28.91%, against the measure. Measure CB would extend existing cannabis business taxes to unlicensed cannabis operations, including a 10% tax on cannabis sales, a 5% tax on medical cannabis sales, a 2% tax on manufacturing, cultivation and other commercial activities, and a 1% tax on transportation, testing and research. City analysts estimated the measure could generate between $30 million and $35 million annually for the city’s general fund, which supports fire and police services, street and sidewalk repairs, transportation projects and other municipal services. Administrative and enforcement costs associated with the measure were projected at between $2.2 million and $10.5 million, according to the ballot language. Recreational cannabis was legalized in 2016 by California voters under Proposition 64. In 2017, LA voters approved Proposition M, authorizing the city to regulate and tax local cannabis businesses. Meanwhile, returns showed mixed results for Propositions TC and TT, two measures aimed at updating the city’s transient occupancy tax, commonly known as the hotel tax. Los Angeles voters were asked to decide Propositions TC and TT, which would
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apply the city’s hotel tax to online travel and booking companies and temporarily increase the tax rate from 14% to 16% through 2028 before reducing it to 15% in subsequent years, respectively. Proposition TC was leading with 215,998 votes, or 55.73%, while 171,567 votes, or 44.27%, were cast against the measure. City officials say Proposition TC modernizes the hotel tax, which is applied to all fees and charges associated with occupancy of hotel and motel rooms, short-term rentals and hostels. The proposition aims to require online travel companies and platforms to collect and remit the tax on the full amount paid by customers, which officials say will ensure fair and consistent tax collection across the lodging industry. Proposition TC would generate an estimated $5 million annually for Los
Angeles, analysts said. Proposition TT was trailing with 212,034 votes, or 55.27%, against the measure, compared to 171,566 votes, or 44.73%, in support. Proposition TT seeks to increase the hotel tax through 2028, when major events are scheduled to happen, starting with the World Cup this month, the Super Bowl in 2027 and the 2028 Olympic and Paralympic Games. City officials estimate Proposition TT would generate $44 million through 2028, and decrease to $22 million annually once the rate falls by 1% in 2029. Malibu, Santa Monica and Beverly Hills all have a 15% hotel tax. City officials have said the proposed tax measures are not intended to impact city residents, but rather tourists and other outside visitors. City Council members See Propositions Page 28
Primary election: Governor, county races head for November runoffs By Joe Taglieri joet@civicnewsgroup.com
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By City News Service
Tim McOsker, Bob Blumenfield, Eunisses Hernandez, City Administrative Officer Matt Szabo, and Chief City Tourism Officer Doane Liu are encouraging voters to approve Propositions TC and TT. They argue the proposed taxes are anticipated to even the playing field for licensed cannabis businesses and ensure the hotel tax is collected from online platforms — two issues the city has struggled with. Opponents of Proposition TT such as City Councilman John Lee, Hotel Association of Los Angeles President Jackie Filla, and LAX Coastal Chamber President Chad Madender have argued that increasing taxes doesn’t help Los Angeles prepare for major global events. “Higher visitor costs make Los Angeles less attractive
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s vote counting continues following Tuesday’s statewide primary election, Democrat Xavier Becerra and Republican Steve Hilton are headed for a gubernatorial runoff in November, while a number of county and congressional races were in play. Hilton and Becerra outpaced a large field of competitors in the primary. With returns still being counted throughout California, Hilton had 1,387,459 votes, or 27.8%, as of Wednesday afternoon, while Becerra had 1,267,375 votes, or 25.4%, according to the latest election results from California Secretary of State’s Office. Billionaire hedge fund manager Tom Steyer, a Democrat, was in third place with 979,265 votes, or 19.6%. Riverside County Sheriff Chad Bianco was fourth with 567,033, or 11.3% of counted votes. Hilton is a political strategist and observer who worked for former British Prime Minister David Cameron and Fox News. A California resident for 15 years, his central campaign themes have been tax reductions, spending limits and reducing bureaucratic red tape. Hilton addressed supporters Tuesday night in Huntington Beach, standing on a stage with the words “Change is Coming” behind him. “It looks very much as if Californians really will have the chance to vote for change in November and take our state in a new direction, a fresh start for our state, which is long overdue,” Hilton said. “But I just want to say something to every single person who voted for me, and every single person who voted in this election, whether you voted for me or not. I am here See Primary election Page 04
for you, for every single one of you.” Hilton has criticized Becerra over a campaign finance scandal involving two employees caught misappropriating funds. Becerra has denied any knowledge of the alleged wrongdoing. Becerra listed his priorities if elected — “fighting Donald Trump”; delivering affordable healthcare “without debt or delays”; building more affordable housing; using “the power of the state to lower prices where the market has failed,” ensuring artificial intelligence “that works for everyone” and governing “differently” in the effort to curb homelessness, which he said was “a moral emergency and policy failure.” Becerra is a former state attorney general and former secretary of the U.S. Department of Health and Human Services. “The California dream? It’s alive tonight,” Becerra told his supporters in Los Angeles Tuesday. He said his campaign was “fueled by little more than grassroots support, some sweat equity and the full faith and confidence that California is always worth the fight.” Becerra characterized himself as an earlier outlier in the race who went on to become the front-runner. “Almost immediately, he’s counted out, an afterthought, overlooked by many, outspent by a ton,” Becerra said. “Even called along the way to drop out and save us all the trouble. Well guess what, the underdog stayed in the fight. Like my parents, I never gave up, never stopped putting one foot in front of the other, never stopped believing in the beacon-like goodness of California, and thankfully, neither did you. Because we