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LOS ANGELES (CNS) - Plans to build more affordable housing could be hampered by pending federal tax reform, leading the Los Angeles County Board of Supervisors to unanimously pass a motion today against the legislation.
Supervisors Mark Ridley-Thomas and Sheila Kuehl recommended pressing Congressional members for a no vote on provisions that would eliminate tax- exempt private activity bonds that help finance roughly half of all low-income housing. Both the House and Senate have passed tax bills, but the reconciliation process will require additional votes.
``Few of us would argue that the current tax code is archaic. We get that,'' Ridley-Thomas said. ``But I want to make it very, very clear that (tax reform as proposed) will have serious, serious consequences in terms of the ability of state and local government to provide vital services.''
Tax credits for low-income housing are set to be retained under the current versions of both the House and Senate tax bills. However, the House bill eliminates the exemption for private activity bonds.
``The proposed reforms would have a devastating impact on housing and community development efforts in Los Angeles County and nationwide,'' said Monique King-Viehland, acting executive director of the Community Development Commission.
Private activity bonds funded an estimated 20,000 housing units statewide in 2016, King-Viehland told the board.
As for county residents who already own a home of their own, the Senate bill would eliminate property tax deductions and the House bill would cap those deductions at $10,000 annually.
About 13 percent of county homeowners pay more than that in property taxes, according to Assistant Chief Executive Officer Manuel Rivas.
The real estate provisions aren't all that the board dislikes about reforms proposed by Republicans.
Legislative advocates for the county have already been lobbying against elimination of the deduction for state and local income taxes and a plan to repeal the individual mandate for health insurance under the Affordable Care Act.
Nearly 85 percent of deductions claimed for state and local income taxes are filed by middle-class county residents, Rivas told the board.
Kuehl said the proposed reforms represent ``yet another, but even more egregious redistribution of wealth upward in the country. They used to talk about trickle down. It ain't trickle down. Nothing trickled down from any of this stuff ... Mostly we got hosed.''
Proponents of both bills say corporate tax cuts would spur investment, hiring and economic growth and that the legislation represents a simplification of a Byzantine structure of taxes and credits, many of which no longer serve their intended purpose.