Will Villaraigosa Bring Jobs to LA?

A week ago, I didn't know Sean Hannity beyond the television personality. Recent events, however, brought us together through our shared philosophy that freedom and the rule of law, rather than arbitrary and inconsistent actions by government bureaucrats, provide the foundation for economic prosperity.

I wrote a column that appeared in the Wall Street Journal last Friday telling the story of how the city of Los Angeles has unfairly harassed my business, Creators Syndicate. Hannity invited me on his show to talk about it, and I knew I had an ally.

Creators had a tax dispute with the city 15 years ago. We spent a small fortune on lawyers and suffered through a series of administrative meetings until finally we had a hearing before the city's Board of Review — the last stop in the appeals process, where rulings are final.

In 1994, we received a ruling in our favor and, relying on that ruling, decided to stay in L.A.

Two years ago, city auditors suddenly announced that rulings are only final for taxpayers — not for the city. They forced us to hire more lawyers, to attend more meetings and to endure yet another Board of Review hearing.

Last month we received a new ruling from the new board, and this one put the company in a much higher tax classification. Even though we received the new ruling in June 2009, they made it retroactive to 2004 while threatening to charge us mafia-level interest rates of 40%.

This meant a tax bill of several hundred thousand dollars, even though we had faithfully paid, year after year, according to the city's 1994 classification.

It is no surprise that jobs are disappearing from Los Angeles at an alarming rate when the city's tax authorities arbitrarily decide they can ignore their own rulings and impose taxes and penalties retroactively after they change their minds.

Their position sends the message to all business owners that they can never know what their tax rate is.

Los Angeles has an unemployment rate of 11.4% and climbing — almost doubling what it was a year ago. You'd think the city's leaders would do everything in their power to create more jobs rather than drive them away.

The good news is that Los Angeles Mayor Antonio Villaraigosa has said the No. 1 priority of his second term is job creation.

Hannity said he would ask the mayor to come on his radio show with me to discuss our struggle with the bureaucracy, and the mayor himself said he looks forward to talking with people who are creating jobs in Los Angeles.

"We are going to sit down face-to-face with our friends in the business community whenever and wherever we see the opportunity to help hire local workers and create local jobs," the mayor said in his second inaugural address a few weeks ago.

Respectfully, Mr. Mayor, what better time to answer your call for "whenever" than now, and what better place to answer "wherever" than on Sean Hannity's radio program?

I hope the mayor comes on the show. I will tell him that Creators Syndicate represents hundreds of the most talented columnists and cartoonists in the country (www.creators.com), including IBD's Pulitzer Prize-winning cartoonist Michael Ramirez. We might have fewer than 50 full-time employees, but we trigger a job-creating ripple effect in Los Angeles to the tune of hundreds, if not thousands, of jobs in the area of support services. If we leave, how is that good for the city?

Newly elected Los Angeles city attorney Carmen Trutanich campaigned on promises to protect taxpayers and to avoid lawsuits whenever possible. This is a golden opportunity for the city attorney to keep his promise. We want to spend our time continuing to build our business, not filing lawsuits.

I love Los Angeles and want to stay and support the city. But if they insist on changing the rules arbitrarily, we will be forced to sue. If the city wins in court, it will lose hundreds more jobs because we will move.

On the other hand, if the city adopts rules of fair play for taxpayers — where rulings apply to both sides and where administrative review boards are truly impartial — then there is hope that Villaraigosa's vision of more jobs in Los Angeles could actually come to pass.

You can read more about Rick Newcombe here.

Related: Rick Newcombe's Op-ed from The Wall Street Journal.