Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Revenue Generation topic
No spam. Unsubscribe anytime.
Finance proposes revenue push: tax‑discovery hires and LA Tax replacement to generate millions
Summary
The Office of Finance urged the committee to authorize staffing and one‑time funding to expand a tax discovery program and bolster collections, and to fund a modernization program ("LA Tax") to replace an aging tax administration system. Finance estimates the proposed steps could yield roughly $20 million in additional revenue over the next year
The Office of Finance asked the Budget and Finance Committee for a targeted, revenue‑first response to the city’s budget shortfall: add staff to find unregistered businesses, amplify collections on at‑risk receivables, and invest one‑time dollars to replace the city’s aging tax administration system.
Why it matters: The finance pitch is a classic municipal response to a shortfall: small investments to unlock recurring revenue. Committee members were receptive but asked for precise implementation memos and instructions on how quickly hires could be filled.
What Finance proposed: The department outlined two packages. The first would expand the tax discovery unit—staff that uses cross‑agency data sharing to find businesses that should be registered with the city. Finance reported that a recent mailing campaign registered 13,000 businesses and yielded revenue already included in the FY25–26 projection. Expanding the program would require about $3.2 million in new expenditures (15 tax compliance officers, 10 customer service specialists, mailing and overtime) but could bring in an estimated $18 million in FY25–26 and about $10 million annually thereafter.
The second package focuses on collections: additional investigators to work older accounts where the three‑year statute of limitations for city collections is at risk of expiring. Financing roughly $365,000 in staff would let the department pursue receivables Finance estimates are worth approximately $2 million.
LA Tax modernization: Finance also urged the committee to fund a multi‑year replacement of LA Tax, the city’s tax administration system. The department described a December 2023 system failure that required months of manual reconciliation and left revenue recognition and daily reporting unreliable. Finance argues a modern system would reduce crash risk, improve taxpayer self‑service, and lower manual reconciliation costs. The department asked the committee to include one‑time implementation funding as part of broader offset conversations.
Next steps: Committee members asked the CAO and the Office of Finance to submit memos with implementation timelines, staffing flexibility language and projected revenue timing; Finance emphasized hires would need to be filled quickly (by August) to achieve projected FY25–26 revenue.
