Public Pays for Half-Million-Dollar L.A. Tourism Salary

Attachments:
LA_Inc_2009_990.pdf (1.3 MB) —

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 outrage. 

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 [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 compensation. 

CEO Liberman pulls down $488,000 a year. This is well above the pay scale for many public officials who have been lambasted for their featherbedding. Earlier this week, an Orange County Grand Jury study of compensation brought boos for some of that county’s most highly paid city managers. Yet the highest-paid of these, Laguna Hills City Manager Bruce Channing, is only pulling down $378,000. 

The difference is that there has not been nearly as much attention paid to the lavish compensation of officials in public/private partnerships. Nor is this information as easy to organize in the kind of databases that are being put together for teachers, city managers and other public employees around the country. But taxpayers are still funding these pay packages. 

What are they getting for this investment of public money? LA Inc. spends about $7 million a year on “advertising and promotion.” The justification for that spending is that tourism is a major portion of the county’s economy. But is there any need to spend public money to advertise Los Angeles as a tourist destination? 

Los Angeles is already the center of the American entertainment industry, which provides more free advertising for the area than any quasi-governmental entity could manage. It’s pretty widely understood, in the United States and abroad, that Malibu has beautiful beaches and Rodeo Drive offers a unique upscale shopping experience. I do not remember a time when I did not know the word “Hollywood.” What could LA Inc. possibly be offering in the way of tourism-boosting that would justify its cost? 

As an extra irony, that cost is coming out of the other end of the tourism business. By not imposing massive hotel taxes and airport fees in the first place, L.A. could help its tourism business in a way that can be justified without flimflammery: If you make it less expensive to come here, people will be more likely to come here. 

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • ||

    Well, it's not just directed at individual tourists, it's also directed at conventions and crap. They may take a little more massaging to get them to come to LA.

  • Appalachian Australian||

    Nobody seems to get that a bidding war between every major city for conventions, conferences, etc. is a zero sum game. The only way to win is not to play. It gets harder and harder to justify sending employees to conferences when each employee will be spending hundreds of dollars on travel taxes for a 3 day conference.

  • Comment Tater||

    It's only a zero sum game if there are a fixed and unchanging number of conventions and conferences being divided up by a fixed and unchanging number of "convention cities." In other words, never. But yes, budget-conscious companies (and tourists) will look at the numbers and decide whether it's worth it to physically travel or simply teleconference it (or have a "staycation.") The bottom line is that bed taxes work and are attractive to voters, who rarely have a problem passing along a tax to outsiders. To the locals, it's free money. And the locals will be happy as long as the conventioneers and tourists keep coming.

  • GSL||

    Just keep repeating: California needs 5 more years of higher taxes, because it absolutely cannot cut anything else from its budget!

  • MS-13||

    But is there any need to spend public money to advertise Los Angeles as a tourist destination?

    Diré el "no."

  • hazeeran||

    Better them starting there than "HOW do we spend public money to advertise Los Angeles as a tourist destination".

  • ||

    Even that generates good press!

    I've had people come up and ask me if Compton was really as awesome as everybody says. You don't think all that played well with all those white kids who bought all those units by Snoopy Poop Dog and Six Pack Shakira?

  • Fist of Etiquette||

    That "attachment" moved to the top of the post when I clicked on comments. Is my computer infected now?

  • rather||

    Like it wasn't before ;-)

  • Appalachian Australian||

    Obama's economic geniuses who are going to give us 1 million new jobs by the election have promised to boost tourism to the USA.

    This whole topic is a bit personal for me, since my company has to pay $12 a day right now when I'm renting a car for stadiums built a decade ago in the name of "tourism". There's a 1.5% surtax on hotels. There is a .25% sales tax increase (which drives up the cost of doing any kind of business) for the purpose of a convention center that hasn't even been built yet.

    $12/day for a total bill of $57/day seems excessive for promoting tourism. The taxes on my last rental car were 35% or so.

  • Amakudari||

    Psh, San Francisco's tax on parking alone is 35%.

  • CrackertyAssCracker||

    This is a good example of what happens when raw unfettered dog-eat-dog capitalism is allowed to run amok. Just ask that guy from the guardian. All these shitty robber barons should just move to Somalia.

  • ||

    Latest AP-GfK poll (favorable-unfavorable, 6/20 and 5/9):

    Gingrich 26-59 35-47
    Huntsman 18-21 18-15
    Palin 38-55 36-59
    Pawlenty 29-24 24-26
    Romney 45-35 45-35
    Santorum 25-27 24-25
    Bachmann 37-28 30-29
    Paul 39-31 36-35
    Cain 25-23 ---

    ...and surprise, the only one who didn't get mentioned in the AP report on this poll is the one with the second highest favorable rating.

  • Appalachian Australian||

    We can't report poll numbers on unelectable candidates.

    Ron Paul could win the Presidential election and the news media would not consider it "newsworthy".

  • Conan the Barbarian||

    The media is going to make sure Romney is the GOP candidate. Then all of us (except the liberals) are going to barf, after which we'll swear off politics for ever. Again.

    Long live the slowly dieing MSM. People may think the MSM has a strong liberal bias, but by and large at the end of the day they still believe what the MSM tells them.

    Because people in the MSM wear suits.

    Do you wear suits, Tim?

  • ||

    They tried that some last time, too. Didn't work. With Romeny or with Clinton.

  •  ||

    Try to focus, Tulpa. Bed taxes. Nonprofits. Tourism.

  • ||

    And surprise, the one who wasn't even included in the poll is probably the only one who has a good chance of beating Obama.

  • chaussures air max ||

    thank you

  • jtuf||

    There are enough outrageous misdeeds by nonprofits to fill a second daily brickabrack if Reason wanted to.

  • DJF||

    Just another one of these "Public/Private" scams. It is designed to hide responsibly and accountability. There should be a wall of separation between government and private business.

  • WTF||

    Where does all that money go? More than 40 percent of it goes to pay staffers.

    "We've got to save our phoney baloney jobs!"

  • Kolohe||

    This is why 'public-private partnerships' that were discussed a few weeks ago regarding California's state parks must be looked upon with extreme skepticism.

  • Untermensch||

    Or put them out for open bid and the company that bids the lowest while meeting open and publicly available standards (to prevent sweetheart deals) gets the contract.

    In this case the deal is one in which the private entity might as well be a governmental one: there is no bid, now competition.

    There are ways to do public-private partnerships and ways not to do them. This is really crony capitalism since everyone involved is in bed together.

  • cynical||

    Shit, public-private partnerships should always be looked on with the sort of skepticism applicable to church-state partnerships.

  • creech||

    I had a discussion with a local tourism official. "Why should Aunt Millie in town to help out after her sister's operation, or to see her nephew graduate, have to pay a tax so
    out of towners can learn about some winery in our county?" His answer really came down to "because we can"
    nuanced by "these folks may not go to tourist sites but they use our roads, our police forces, and other municipal services while they are here."
    But all of which are already paid for by individuals and businesses that are being patronized and, presumably, already passed through in transaction
    costs for the goods and services Aunt Millie is using during her stay.

  • ||

    I'm amazed that any enterprise with a $19m budget would pay its CEO half a million.

  • Shannon Love||

    Yes, that's out of line compared to private companies.

  • ||

    When you consider that life guards in the LA area make $200K, $488K doesn't seem out of line.

  • ||

    Will do surgery for food.

  • ||

    "Advance the prosperity of LA's visitor economy and the livelihoods that depend on it.”

    That being the livelihoods of the staff of LA, Inc.

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online

  • Video Game Nation: How gaming is making America freer – and more fun.
  • Matt Welch: How the left turned against free speech.
  • Nothing Left to Cut? Congress can’t live within their means.
  • And much more.

SUBSCRIBE

advertisement