Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Municipal Budget topic
No spam. Unsubscribe anytime.
City to place business-tax repeal on November ballot after CAO warns of $860M-a-year loss
Summary
The Los Angeles City Council voted to place a certified initiative that would repeal the city's grocery/gross-receipts business tax on the November 2026 ballot after a CAO presentation that estimated a $740M first-year gap and about $860M average annual loss; the council discussed required emergency steps but did not adopt the ordinance itself.
The Los Angeles City Council voted to send a certified initiative that would repeal the city's grocery/gross-receipts business tax to the November 2026 ballot after a presentation by Chief Administrative Officer Matt Sabo outlining major fiscal risks.
Matt Sabo told the council the measure would eliminate the non-cannabis portion of the business tax and could cause an immediate $740,000,000 revenue shortfall in the first year, with an estimated $860,000,000 average annual loss over the first five years. Sabo said the loss would force emergency action "including a hiring freeze, layoffs and cancellation or deferral of capital projects," and could require renegotiating labor agreements and reevaluating Olympics preparations.
Council members discussed three legal options for a certified initiative: adopt it as an ordinance, hold a costly special election, or place it on the next regular municipal ballot. City Attorney Fareed Trevetti confirmed the council's choices and noted proponents could withdraw the measure before the August deadline. Council members expressed concern about the scale of the fiscal gap and the immediate operational impacts Sabo outlined.
Advocates and opponents of the initiative addressed the council during public comment. The CAOs report and council discussion focused on the immediate and long-term service and staffing consequences should voters approve repeal in November.
Council action: the council moved to place the measure on the November ballot and the motion passed on the roll call vote (15 ayes). That action forwards the initiative to voters rather than adopting the repeal as a council ordinance, preserving the electorate's decision while leaving budget planning and contingency steps for later implementation.
What happens next: placing the measure on the ballot will require the city to include the estimated revenue impacts in the ballot materials and to prepare contingency budget language in case voters approve the repeal. Sabo and staff said they will prepare lists of potential reductions and implementation steps the council could be required to adopt if the measure passes.
