LOS ANGELES : Council Seeks Restoration of Local Tax on Banks, S

In an attempt to stave off a looming budget crisis, the Los Angeles City Council voted Tuesday to sponsor state legislation that would impose local taxes on banks and savings and loans.

Financial institutions became exempt from local taxes in the 1970s when the state preempted the levies imposed by Los Angeles and other cities. At the time, the state agreed to return the tax revenues it collected from banks to the cities, but the practice was discontinued several years ago because of the state’s budget crunch.

The legislation, pushed by Councilman Zev Yaroslavsky, chairman of the city’s Budget and Finance Committee, would restore local governments’ taxing power on financial institutions. “While your local shoe store and your barber shop pay business taxes, the Bank of America doesn’t pay a cent,” he said.