Editor’s Note: City Hall wants to tear down half the LA Convention Center, borrow $350 million on top of the $450 million already owed on it and then turn over its operation to AEG to profit from an entertainment complex that includes an NFL stadium, LA Live and Staples Center — all heavily subsidized by taxpayers with at least half of all tax revenue that’s generated going to the Denver-based company. In the meantime, vast amounts of public money and tax dollars that could be keeping cops on the streets and fire stations open is going to pay inflated salaries at the Convention Center — a white elephant that costs the public tens of millions of dollars a year.
By Tim Cavanaugh, Reason.com
Although excessive public-employee salaries are getting close attention in California, many ostensibly private
officials – including a tourism bureau boss who makes almost
$500,000 a year – are paid mostly or entirely from public money. In
some cases, these compensation packages are higher than the pay of
public employees who have been the focus of public
LA Inc. is a non-profit that functions as Los Angeles’ convention
and visitors bureau. LA Inc. is organized as a 501(c)(6). In its tax filing (LA-Inc tax.pdf) LA Inc.
describes its main function: “Advance the prosperity of LA’s
visitor economy and the livelihoods that depend on it.”
LA Inc.’s budget in 2009 was
$19.4 million. About $15.6 million of that money came directly from
the public: $10.4 million from a portion of the city’s 14 percent
hotel room tax and $5.2 million from Los Angeles World Airports.
Another $1.3 million came from membership fees and $2.4 million
from business activity, including advertising in LA Inc.’s visitors
guide. But by far the largest portion comes from public funds. If
you want to know what happens to all those taxes and fees that run
up your airport and hotel bills, this is one example.
LA Inc.’s budget will soon be going up thanks to a recently
approved additional 1.5 percent hotel tax. Mark Liberman, LA Inc.’s president and CEO, says the new
dedicated tax could double the organization’s budget.
Where does all that money go? More than 40 percent of it goes to
pay staffers. Salaries, pensions, benefits and other compensation
make up $8.6 million of the organization’s spending. All of LA
Inc.’s executives make well over $100,000 a year in total