L.A. Controller Urges Action to Support Local Businesses, Create Jobs and Generate Revenue
LOS ANGELES — Today, L.A. Controller Ron Galperin issued a letter to Mayor Eric Garcetti and the Los Angeles City Council recommending a series of measures to increase contracting with local businesses in order to support communities, create jobs and boost sales tax revenue to pay for more neighborhood services.
“Los Angeles is missing out on millions in sales tax revenue that is benefiting other cities instead because so much contracting is done with non-local vendors,” said Controller Galperin. “I see an opportunity to change that, which would both support local businesses — including small businesses owned by women, people of color and LGBTQ individuals — and create more jobs for our communities. It would also put more money back into the City’s General Fund to support services that Angelenos rely on and need.”
Galperin found that Council-controlled City departments paid out $7 million in sales taxes that went to other California jurisdictions for commodities purchased from FY 2018 to FY 2020. During the same period, the City paid just $4.1 million in sales taxes that went back into L.A.’s General Fund for commodities purchased from Los Angeles-based vendors.
Even with the local purchase preference programs currently in place, Galperin said that between FY 2018 and FY 2020, only 18% of the City’s commodities spending went to vendors in Los Angeles.
Galperin noted that, while changes were recently made to the local business preference program, the City Council should also consider increasing the bid preference further to account for the local allocation of sales taxes paid to Los Angeles-based vendors. In addition, changes should be made to the City’s contracts to encourage vendors to use Los Angeles-based locations as the place of sale when possible.
Read the Controller’s letter and recommendations: https://lacontroller.org/increasing-local-investment