Placentia : Council Rescinds Utility Tax Increase After Vote

After next month, Placentia residents will see a reduction in their telephone, electricity, cable television and gas bills.

City Council members agreed Tuesday night to reduce a 5% utility tax to 3% after the Nov. 5 advisory vote that resulted in 74% of the ballots favoring lower utility rates.

The utilities users tax had been raised from 3% to 5% effective April 1, but irate residents collected 3,111 validated signatures on a petition that asked that the issue be placed to a vote. Because tax matters are not subject to the referendum process under the state Constitution, council members agreed to place the issue on the ballot as an advisory vote, which means they were not bound by the outcome.

Councilman John Tynes and Mayor Pro Tem Art Newton on Tuesday also suggested that residents be given a refund of the tax increase already collected, and that the tax be rescinded after the Civic Center is paid for in 1988. Both suggestions were voted down.

Opponents of the utility tax argued that the main reason for implementing the tax was to build the Civic Center. Once paid for, the tax should be rescinded, they said. Officials who supported the tax said there was no cutoff and argued that the tax was geared to pay for other projects, such as street maintenance, in addition to the Civic Center.

Gary Arnold, of the city watchdog group Placentia Watch, said Wednesday that the city should have used the money specifically to pay off the Civic Center and then “knock the tax.”

City officials said the 2% increase was expected to bring $557,000 more to the city in the next year. Without it, staff members will now take another look at their five-year capital projects plan.