Los Angeles Councilmember Proposes Ballot Measure for New Tax on Private Golf Courses

LOS ANGELES – City Councilmember Adrin Nazarian introduced a motion on Friday seeking to place a measure on the November ballot that would impose a significant new parcel tax on private, nonprofit membership clubs, including the city’s exclusive golf courses. The proposed tax, set at $4 per square foot, could generate an estimated $250 million in annual revenue for Los Angeles, according to Nazarian's office. The measure targets large, private recreational facilities that have long benefited from a state law that keeps their property taxes exceptionally low. If the motion is approved by the City Council, it will be sent to the city attorney's office to draft a formal resolution and ordinance for the November 3 ballot. According to the motion, the new revenue stream is intended to fund a wide range of city priorities. These include capital improvements such as repairing potholes, fixing sidewalks, and repaving streets. The funds could also be used to support the local film and television industry through tax credits and permit fee relief, as well as to establish a financial assistance program for first-time homebuyers. The motion also lists affordable housing production, homelessness response, and other economic development initiatives as potential uses for the money. The proposal takes direct aim at the financial benefits these clubs receive under California's Proposition 13. Passed in 1978, the landmark state law capped property taxes at 1% of a property's assessed value from 1975 and limited annual increases to just 2%. Critically, a property's value can only be reassessed to current market rates when it is sold. For properties like private country clubs that rarely change hands, this has resulted in tax bills that are a small fraction of what they would be if based on their actual market value. This proposal in Los Angeles is part of a larger trend we're seeing where municipalities, facing budget shortfalls, are exploring highly targeted taxes on specific industries or property types. For businesses like private clubs, which may have operated under a stable tax structure for decades, such a sudden and significant shift can be jarring. It underscores the need for constant monitoring of local legislative proposals, as what seems like a niche issue can quickly become a major financial liability. Proactive tax planning is no longer just about federal and state compliance; it's about anticipating these local-level changes. To illustrate the disparity, Nazarian’s office stated that six of the city's private country clubs collectively occupy nearly 1,000 acres of land valued at over $15 billion, yet they pay only $811,000 in property taxes per year. The councilmember's office estimates that, based on their value, these properties should be paying approximately $139.9 million annually — more than 160 times their current tax burden. “With the budgetary crises our city is facing, it’s time to think of new, creative ways to generate revenue to keep the services that we all rely on running,” Nazarian said in a statement, adding that it is important to “undo past inequitable tax policies.” Nazarian has said he was inspired to act after listening to an episode of author Malcolm Gladwell’s “Revisionist History” podcast. The episode focused on the Brentwood Country Club, questioning why vast, private green spaces in Los Angeles receive what amounts to a public subsidy via Proposition 13 while being inaccessible to the general public. The proposal is already drawing scrutiny and concern. The Howard Jarvis Taxpayers Association, in a statement, questioned whether the city would spend the new revenue as advertised. “If the revenue from this proposed $4 per square foot parcel tax goes into the general fund, there is no legal obligation for the city to spend it on the advertised purposes, it can be spent on anything,” the association said. Rick Stegall, a golf course manager speaking as an individual, warned that the measure could “kill the industry,” fearing it would be a “straw that is going to break the camel’s back” for private golf in the city. The concern that new tax revenue will be diverted into a general fund is a common and legitimate one we hear from clients, highlighting the importance of scrutinizing the specific language of any ballot measure. For the affected clubs, a tax of this magnitude would require a complete overhaul of their financial models, likely leading to significant increases in membership dues or cuts in services. Navigating these challenges requires expert financial guidance. C&S Finance Group LLC's tax preparation and compliance services help businesses understand and prepare for exactly these kinds of complex local tax changes. Business owners can learn more at csfinancegroup.com. The motion is now set to be reviewed by the City Council's Rules, Elections, and Intergovernmental Relations Committee. The full council is expected to vote on the initiative before a June 28 deadline to determine whether it will appear before Los Angeles voters in the November general election. All eyes will now be on the committee hearing and the subsequent full council vote. The coming weeks will likely see the formation of organized opposition from the affected clubs and their members. Ultimately, the council's decision by the end of June will determine if Los Angeles residents will have the final say on this new tax.