Los Angeles residents were promised that the 2028 Olympic Games would be “zero cost” to taxpayers, but it isn’t working out that way. The latest evidence is a motion in the L.A. City Council, introduced by Monica Rodriguez, to place a proposed 10% ticket tax on the November ballot for voter approval.
In April, Rodriguez put forward a separate motion to add a “Zero-Cost Principle” to the City Charter and bar the Olympics organizing committee, LA28, from depositing surplus revenues into a new Legacy Fund instead of reimbursing the city for all costs incurred to host the Games. City Attorney Hydee Feldstein Soto has also vowed to prevent LA28 from diverting money to a Legacy Fund before reimbursing Los Angeles for all expenses.
But that may not work. LA28 could go out of business after the Games conclude, and taxpayers would be out of luck.
The tax would add to the high price of tickets that already carry a sky-high service fee of 24%. Taking a family of four to the Games can run into the five figures. Why are L.A. residents being asked to approve another tax? Because years ago, city officials signed a Host City agreement that left crucial details for future negotiations instead of locking down a commitment to protect taxpayers.
The Enhanced City Resources Master Agreement, providing for reimbursement of extra costs connected to hosting the Games, was supposed to be concluded by last October. That still hasn’t happened.
So Los Angeles has no assurance of reimbursement for all the extra costs of additional police, fire, sanitation, traffic control and other public services that officials expected LA28 to pay. The city budget may have to cover it all.
The city is also on the hook as the financial guarantor of the Games. If LA28 has insufficient revenue to meet a budget in excess of $7 billion, the city is required to cover the first $270 million in cost overruns. The state has accepted responsibility for the next $270 million. Above $540 million, it’s all on the city taxpayers.
The federal government has appropriated $1 billion for security for the L.A. Games, but it’s not clear how much, if any, of that money will go to the city treasury to cover expenses.
The “zero-cost” Games could set an Olympic record for draining the L.A. city budget.