Weekly Report – June 22, 2015 – Invest in and Maintain a World Class Transportation System


In 2012 Congress authorized $11B to build out NextGen, a satellite-based technology that enables air traffic controllers around the nation’s most congested airspace to track planes more precisely and manage departures and arrivals easier, compared with traditional radar. This GPS technology has been implemented in other parts of the U.S. with great success, decreasing the amount of time planes sit on the tarmac and creating more direct routes, which cuts fuel consumption and emissions. The goal of the Federal Aviation Administration is to implement this technology in Southern California’s airspace starting in 2016. The L.A. region’s mountainous terrain and restricted air space due to military activities, make many of the available routes congested, especially under the conventional radar-based flying system. The FAA began a series of public meetings last week to explain and receive comment on the draft environmental analysis for this project and CA Congressmember Maxine Waters has asked that the public comment period for this proposal be increased from 30 to at least 90 days. She said the affected communities in her district need more time to consider the possible impacts of the flight path changes for both noise and emissions. Implementing GPS technology to make the skies more safe and efficient has been in discussion for more than a decade and I am recommending that the L.A. Coalition and our membership use every opportunity to communicate support for its timely implementation.

Port of L.A.

Congratulations to L.A. Coalition members Wallis Annenberg and Barry Meyer, both members of the Board of Trustees for the marine science center AltaSea at the Port of Los Angeles. Last week it was announced that AltaSea will be the home to SpaceX’s three rocket recovery vessels – Marmac 303 (a landing platform), Smith RHEA (a tug) and NRC Quest (the support boat) that support both the Dragon spacecraft and Falcon 9 rockets. AltaSea, which will be built in three phases, is envisioned as a 35-acre center with seawater laboratories, business offices, a lecture hall, interpretive center and a wave tank.  Many of the region’s leading universities, such as the Cal State five regional universities. L.A. Community College district and USC and UCLA, are already partnering with AltaSea on research opportunities and this new collaboration comes at a time when AltaSea remains in its early stages of development and is seeking additional tenants. SpaceX’s first mission is planned for early August and others will follow. Each mission will bring in a 50-member SpaceX team. The SpaceX DragonLab will also team up with AltaSea in advancing the “science of sustainability” with organizations such as the Southern California Marine Institute. The L.A. Coalition has supported this initiative by facilitating meeting between key stakeholders and highlighting the project in an op-ed: http://www.csq.com/2015/03/op-ed-michael-kelly-would-howard-hughes-invest-in-los-angeles-today/

L.A. Metro. 

With more than 14B dollars being spent on public rail projects throughout the L.A. region and plans to spend 30B plus in the future, the L.A. Metro Board continues to work with CA Congressmember Karen Bass to make permanent a federal pilot program that allows local transportation agencies to consider hiring local workers for transit and highway project that use federal funds. Currently, local agencies that receive federal funds can only consider income, not geography, when hiring workers. To address this issue the Department of Transportation established a pilot program that will permit L.A. Metro to prioritize local hiring on over two billion dollars in transit and highway projects. This investment will translate into tens of thousands of well-paying jobs for Angelenos, putting these tax dollars back into the communities that paid for the projects. Congressmember Bass wants this program to become permanent to allow for more local control to transit agencies to ensure that people who need jobs today will be the first in line for the jobs these projects create. For now, L.A. Metro will be launching their first federally funded contract subject to a local hire program for the Southwestern Yard, which is a key component of the Crenshaw/LAX transit project. Metro’s Local Hire Program will provide construction career opportunities to residents of the project area and L.A. County, allowing those most affected by construction to share in the economic benefits of this investment of public dollars. Specifically, Metro’s Local Hire Program for the Southwestern Yard will have the following hiring goals; 40 percent community/local area workers; 20 percent apprentice workers; and 10 percent disadvantaged workers. The L.A. Coalition has supported L.A. Metro’s America Fast Forward project that will build out 12 major public rail lines in the next 20 years and I would recommend that the L.A. Coalition use any and every opportunity to support the L.A. Metro Board and Congressmember Bass in advancing this specific initiative. This is also about leveraging local tax dollars for local jobs and creating an incentive for locals to pass sales tax measure if the jobs stay in the area. It should also apply to good and services not just employment.

Federal Tax Reform/Transportation Funding.

Federal lawmakers continue to seek a long-term solution to the nation’s transportation funding program and that discussion includes broad changes to corporate taxes. Treasury Department officials and lawmakers are discussing major tax changes, according to House Ways and Means Committee Chairman Paul Ryan (R., Wis.) and the focus is on a combination of business-tax changes that could alter the U.S. tax code, while also generating one-time revenue for highways and other infrastructure. The changes being discussed would likely put the U.S. system of taxing corporate overseas income more in line with that of other countries, something U.S. multinational corporations generally would like. The one-time revenue would likely come from taxing profits that American companies have parked offshore to avoid U.S. tax – an idea that many companies don’t like. Senate Finance Committee Chairman Orrin Hatch (R., Utah) is also interested in a long-term fix to the highway-funding mess and he is willing to consider corporate tax changes to do it. The federal highway program has been operating on a series of brief extensions. The current one, which expires July 31, was for just two months. Both committees are scheduled to hold hearings on highway funding this week. Dave Reichert (R., Wash.), chairman of the Ways and Means Select Revenue Measures subcommittee, said his panel will examine whether they could finance a multi-year highway bill while making the U.S. international tax system more competitive. Some senators in both parties also are exploring the idea of using one-time revenue from corporate tax changes to finance multi-year spending on highways and other infrastructure. Sen. Charles Schumer (D., N.Y.) co-heads a Finance Committee working group on international tax changes and committee staff has said that a deal could lead to significant revenue for roads. An alternative to a corporate tax overhaul would be to pass a highway fund extension of two years or so in July, using a combination of smaller-bore tax changes, spending cuts and attempts to reduce waste and fraud. Some of the tax changes being discussed would also give the government more ability to collect unpaid taxes. The L.A. Coalition will monitor this dialogue and determine as a group if and when it should weigh in.

Promote Los Angeles as a Leading Hub for Technology, Entertainment and Creative Talent
HBO has made it official – its series – Veep – will relocate to L.A. – to take advantage of the $6.5 million in tax credits offered by the Californian Film Commission and its new $330 million per annum tax credit program signed into law last September by Gov. Jerry Brown. Veep had snagged about $13.9 million in tax credits from Maryland over its first three seasons and their four seasons of production hired over 3,000 state of Maryland residents and is estimated to have had an economic impact of $114 million. In Louisiana, Governor Bobby Jindal has signed into law limits on the lucrative tax credits that helped turn Louisiana into Hollywood South. Jindal on Friday signed House Bill 829, a contentious proposal passed in the last minutes of the recent legislative session. The bill caps the amount the state pays for film tax credits for the next three years at $180 million annually. That’s about $77 million less than the state was otherwise expected to spend in the fiscal year that begins July 1 and $70 million less for each of the two following years. Some contend that HB829 will subject the state to lawsuits by impacted taxpayers and will result in the loss of a large number of production jobs. The changes could violate existing contractual arrangements and will cause uncertainty that could lead companies to film elsewhere.

Develop Los Angeles as a Top Tourism and Convention Center

The L.A. Convention and Exhibition Center Authority sent a letter to L.A. City Councilmember Curren Price, the chair of the economic development committee, stating the Commission’s approved recommendation of HMC Architects to design a proposed $350 million renovation of the outdated L.A. Convention Center. Ernie Wooden, a L.A. Coalition member and the President & CEO of the L.A. Tourism and Convention Board has highlighted that L.A. has lost out on nearly $5 billion in economic benefits over the last four years from 271 conventions that bypassed the city because its convention center was either too small or lacked enough hotel rooms within walking distance. An additional 530 conventions bypassed L.A. for various other reasons, such as transportation issues and a lack of small meeting rooms. During the four-year period, the L.A. Convention Center hosted 108 major conventions which helped support 426,300 jobs linked to the tourism and hospitality industries. The good news. A total of 29 new hotels with 5,200 rooms are either under construction or on the drawing boards in L.A. County, including 1,825 rooms within walking distance of the convention center. Ernie has said the region needs 7,000 additional rooms, with at least 3,500 rooms within walking distance of the convention center to attract more large conventions. Economists noted that although a rise in tourism would generate 119,500 job openings in the next five years, most of those positions would require workers with no high school diploma or specific skills. The L.A. Coalition has supported this initiative up until this point and will need to evaluate the project as its cost to the taxpayer becomes more clear.