Follow the Big Money as it Ripples Through L.A.

Los Angeles’ major daily newspapers this weekend each had separate stories that reflected big money in Los Angeles and, in a way, the two stories are connected.

The Los Angeles Times reported than many Silicon Valley entrepreneurs were spending big bucks for Los Angeles area real estate. We’re talking on the high end about $70 million for a custom mansion in Beverly Hills. One realtor said the techies are buying second, third or fourth homes on the West Side of Los Angeles and the beach communities in the $2 to $5 million range.

The Los Angeles Daily News reported on the top salaries of employees of the Los Angeles Unified School District. The article focused on the dismissed Superintendent John Deasy and his $440,000 paycheck. Of note, number five on the list was an elementary teacher who took in $235,000, much of it in unexplained “back pay.” The top ten annual salaries were at $200,000 and above.

Infusion of high tech money into the real estate market means increased property taxes for Los Angeles County. It also makes you think of the trouble long time residents would be in with their property taxes if the pre-Prop 13 property tax system were in place. Dramatic increases in property sales prices would ripple through the community increasing property valuations and thus taxes for all.

The top dollars for educators comes with an additional price tag. Teachers’ union officials, currently in tough negotiations with the LAUSD over pay increases, will use the information about top administrators’ salaries in their quest for more money. High pay for administrators and wage increases for teachers will lead to larger pension obligations for the district.

Will the buying splurge and increased housing payments raise enough tax revenue for the schools to offset the teacher salary demands and increased pension obligations? It’s all connected. My suspicion is the school demands for money will still fall short of the new revenue so the debate over more taxes will continue.

Originally published by Fox and Hounds Daily