Caruso Offers to Finance Drive for Sales-Tax Hike

Rick Caruso, the shopping-center mogul and member of the Los Angeles Police Commission, said Tuesday he would personally finance a drive to place a half-cent sales tax on the May ballot if the City Council refuses to put it there.

Caruso’s threat raises the stake in the debate between Mayor James K. Hahn and some members of the City Council over whether to ask voters to increase taxes to pay for more police officers.

Last month, Los Angeles County voters narrowly rejected a similar tax measure. But Caruso, who owns the Grove in Los Angeles and is developing shopping centers in Glendale and Arcadia, said he was prepared to spend hundreds of thousands of his own money to hire signature gatherers to get another citywide measure on the May ballot.

He also vowed to help finance the campaign.

“This would be the best investment I could make,” Caruso said. “Being a Republican, I don’t like taxes but sometimes you have to do it.”

Earlier this month, council members roundly rejected a proposal from Hahn to put the measure before voters in March. The mayor and Police Chief William J. Bratton backed the measure, which would have added 1,200 officers to the Los Angeles Police Department, bringing the force to about 10,500.

But council members said March was too soon, and some expressed concern that boosting the sales tax in Los Angeles could send shoppers fleeing to outlying cities such as Glendale and Pasadena.

Caruso apparently did not consult Hahn before making his announcement Tuesday, but the mayor and several council members nevertheless praised the move.

Mayoral spokeswoman Elizabeth Kaltman said Hahn was “thrilled” at the surprise move from his police commissioner, a powerful developer who is courted by the city’s political elite.

Councilwoman Cindy Miscikowski also praised Caruso, but said that officials “need to do a post-mortem” of the losing Measure A campaign to avoid making the same mistakes.

“I think the measure can be better shaped,” she said. “If we try and fail again, it will be a long time before we can ever think of revisiting it.”

Caruso’s stance marks the latest example in California of a wealthy person attempting to take an issue directly to voters, said Elizabeth Garrett, director of the USC-Caltech Center for the Study of Law and Politics.

She cited several examples of the trend, including the Orange County businessman who spent millions toward passage of a state measure in November requiring the DNA testing of many prisoners. Also in the November election, another businessman largely bankrolled the proposition to modify California’s “three strikes” law.

Garrett predicted that Caruso could easily get a tax measure on the ballot if he were willing to pay.

“If you pay well enough, you’ll get professional signature gatherers to get an issue on the ballot,” said Garrett, who added that signatures typically cost from $1.50 to $3 during a packed season of campaigns.

“Those who’ve got money get to decide what questions the voters are asked. But to succeed with voters, their issue must resonate with the public,” she said.

Indeed, such a tax hike requires a two-third majority, a difficult hurdle. Countywide, 60% of voters supported the November half-cent tax; in Los Angeles, 64% supported it. Measure A needed 66.7% to win.

Caruso, 45, owns Caruso Affiliated Holdings, a development company with $1 billion worth of projects and controlling franchise rights to many California Pizza Kitchen restaurants. His father, Hank, built the Dollar Rent A Car business.

Caruso, who was appointed to the Police Commission by Hahn in 2001, is considered a supporter of the mayor’s. He was commission president when the panel decided to replace then-Chief Bernard C. Parks with Bratton. Parks, now a councilman, is challenging Hahn in next year’s mayoral election.

“All we are doing is asking the council to let the voters decide. Let’s get it back on the ballot,” Caruso said.

If the City Council does put the half-cent tax hike on the May ballot, Caruso said, he would donate the first $500,000 toward the cause.

Some business groups have questioned the wisdom of pursuing a city-only tax that could prompt consumers to stop shopping for big-ticket items in Los Angeles and go to neighboring cities with lower sales taxes.

Caruso said he does not believe shoppers would go elsewhere if sales tax rises from 8.25% to 8.75%. Moreover, he said, Los Angeles’ business climate would improve with more police officers.

Caruso made the announcement at a Police Commission meeting. The panel has urged the City Council to place the tax on the May ballot, and several commission members applauded Caruso’s offer to finance the signature-gathering.

“I will be out there gathering signatures with him if the council doesn’t put it on the ballot,” said Police Commission President David S. Cunningham III.

The mayor’s sister, Councilwoman Janice Hahn, said council members “ought to save him the trouble,” and vote to put it on the ballot themselves. Council members have until mid-January to make such a move.