Santa Monica Hotel tax hike urged.

IT'S not often that a business group supports a tax increase that would hit some of its largest members, but that's what appears to be happening in Santa Monica.

Last week. the executive committee of the Santa Monica Chamber of Commerce gave preliminary support to a 2 percent increase

If a majority of voters approve the increase, it would put Santa Monica's bed tax at 14 percent, on par with Los Angeles and Beverly Hills. It would also bring an extra $3.5 million a year to the city's general fund.

Several of the chamber's largest members are beachfront hotels; they coordinated with the chamber two years ago to overturn the city's living wage ordinance.

But Santa Monica Chamber President and Chief Executive Kathryn Dodson said city officials have suggested that if the hike in the bed tax is approved, some of the funds will go to the city's Convention and Visitors Bureau, which publicizes Santa Monica as a destination.

"If that money is spent on marketing the city, it could bring back positive results in terms of more tourists staying in our city and spending dollars here," Dodson said.

But according to the ballot lan guage, proceeds from the increase in the bed tax would go to the city's general fund to help fund "police, fire, libraries, parks and recreation, environmental protection, after school programs" and payments to the school district.

There's no mention of funding the Convention and Visitors Bureau, primarily because including such a specific target might make it a special purpose tax that needs two-thirds voter approval.

Dodson said the chamber was exploring avenues to ensure that some of the funding goes to the CVB.

Meantime, chamber executives are also talking with various hotel owners in town to heat their concerns and gauge whether they will support the bed tax increase.

"There may be some hotel people that oppose this and fight it," Dodson said. "But others feel this might result in more funding for the CVB."

Business Tax Politics

Mayoral politics is complicating the effort to reform the L.A. city business tax.

L.A. lawmakers are now considering two business tax reform proposals: one from a blue-ribbon task force to cut the business tax 3 percent a year for five years and the other from Councilmembers Eric Garcetti and Wendy Greuel to cut the tax 5 percent a year for five years.

On Aug. 6, L.A. City Councilman and budget committee chair Bernard Parks called for a study on the impact that reform proposals would have on city revenues. Proponents of business tax reform were dismayed by the move, saying the issue has been studied to death over the last 10 years and that no more studies were needed.

Parks is also running lot mayor against incumbent James Hahn, prompting some to question his motives in calling the study.

Privately, some close to the process say that Parks may he trying to stall the proposals because he wants to deny Hahn the ability to claim credit for business tax reform.

Through his press spokesman Bernard Parks Jr., Parks denied this, saying he had legitimate concerns about the impact a business tax cut would have on city revenues. Also, results of economic modeling of the proposals have yet to come in, he said.

"We just want some clarity here before moving forward. It should only take a few weeks, not months on end," Parks Jr. said.

But even a delay of a few weeks would likely mean that the council would miss the Oct. 31 deadline for reform that's been set by a coalition of business groups.

Ironically, proponents of business tax reform cite the mayoral race for the increased attention they have noticed from Hahn's office on the issue.

The mayor has been criticized in the past for his hesitance to push through a major business tax reform. He has responded by saying he's been concerned about cutting business taxes in the midst of a budget crisis.

"They've definitely perked up about this," said Mel Kohn, a private-sector accountant who chairs the Business Tax Advisory Committee, which came out with the 3 percent cut per year proposal. "I think the mayor's race has helped focus their minds on this."

Moving California Primary?

It was an experiment doomed to failure.

Eight years ago, California officials, frustrated by the state having little say in picking each party's presidential nominees, decided to move the state's primary from June up to March.

Unfortunately for California, many other states had the same idea and also moved their primaries up. So, in the two presidential elections since California's move, all the nomination contests continued to be decided before California voters went to the polls. In the recent Democratic primary, much was made of the frontloading effect that helped propel Sen. John Kerry to the nomination. The so-called "Super Tuesday"--of which California was part--only served to put the exclamation point on Kerry's drive.

Now the Calfornia Legislature is considering a bill to move the primary back to its original June date. One of the benefits would be to shorten the general election campaign season and possibly reduce the expenditure levels.

The bill, which is being carried by Sen. Ross Johnson, R-Irvine, cleared the Senate earlier this year and the Assembly elections committee last month. It must still go before the lull Assembly later this month.

Trade Mission to China

Calling all companies seeking business in China: Los Angeles County small-business officials are planning a trade mission to China this October.

The eight-day mission to Shanghai, Beijing, Hangzhou and Tongli will be the fourth one in recent years organized by the county's Small Business Commission. The last one took place in Oct. 2003; this one is being billed as a way to snare some contracts in advance of the 2008 Summer Olympic Games, which are scheduled to be held in Beijing.

More information is available at the commission's Web site at laosb.org.

Staff reporter Howard Fine can be reached at (323) 549-5225, ext. 227, or at hfine@labusinessjournal.com.