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Finance department proposes revenue push: expand tax discovery unit, pursue delinquent accounts and modernize LA Tax system
Summary
City finance staff offered two revenue initiatives — an expanded tax‑discovery enforcement unit and a debt collection push — and sought funds to modernize the city’s LA Tax system after recent outages and reconciling problems.
Finance department officials told the Budget Precommittee they have two near‑term revenue proposals aimed at increasing collections and reducing uncollected liabilities.
What was proposed The first proposal seeks to expand the city’s tax‑discovery unit (which matches city, state and third‑party data to find unregistered businesses) by adding 25 positions and operational funds with an upfront cost of about $3.2 million. Finance staff estimated the expansion could yield roughly $18 million in one‑time and continuing revenue next fiscal year, with continuing revenues near $10 million annually thereafter if the unit operates at scale.
The second initiative would expand the city’s debt collection capacity by adding three positions and support to pursue high‑value older accounts that are close to statute‑of‑limitations deadlines; staff estimated that effort could recover about $2 million and requested roughly $360,000 to fund it.
Modernizing LA Tax system and operational problems Finance officials also emphasized a separate, longer‑term modernization need: the city’s LA Tax (business tax administration) system has experienced recent technical failures that disrupted online renewals and daily revenue reporting. Presenters said a modernized system would restore the city’s ability to receive and reconcile payments reliably, reduce manual staff work and support improved taxpayer self‑service. The department sought funding authority and flexibility to begin implementation and requested staff flexibility to hire quickly where needed.
Committee response and next steps Council members urged the finance office to provide a memorandum detailing the proposed programs’ staffing plan, projected revenue schedules and a clearer accounting of baseline positions affected by the mayor’s proposed cuts. Members also requested an analysis of whether a limited amnesty program — temporarily waiving penalties in exchange for prompt payment — would be an efficient revenue tool.
Ending Finance said it will provide the requested memos and asked the committee to authorize flexible hiring and implementation funding to enable a fast start if the committee endorses the revenue proposals.
