Despite Disclaimers, Thoreson Insists Katz Backed Utility Taxes

In his campaign literature, on his precinct walks and during his speeches, Republican Assembly candidate Robert F. Thoreson never tires of letting people know the No. 1 reason for his challenging Assemblyman Richard Katz (D-Sepulveda).

“See all those little fees on your water, power and phone bills,” Thoreson explained over and over again on a recent afternoon as he knocked on doors at a Pacoima mobile home park. “My opponent, Richard Katz, voted for those.”

Actually, Katz could not have voted to increase anyone’s utility taxes; that responsibility rests with the City of Los Angeles, which first levied a utility tax almost two decades ago. Nonetheless, the city’s 10% residential utility tax has evolved into a major issue in the campaign, thanks to Thoreson, a Northridge homeowner who said he decided to run for office because he considers the tax on his monthly utility bills “outrageous.”

The utility tax squabble revolves around a vote Katz cast four years ago on an amendment offered by Assemblyman Robert W. Naylor (R-Menlo Park) to a Democratic state senator’s bill against the senator’s will. The amendment would have forbidden all local governments from continuing to levy or increase any taxes without a two-thirds vote of the people.

Naylor’s amendment came after the state Supreme Court had ruled that municipalities could continue to impose utility and other general-revenue taxes without the two-thirds voter approval required for some taxes under the tax-cutting Proposition 13.

In a vote that fell along party lines, Katz and his fellow Democrats voted to table the amendment. Because the amendment was doomed to fail, Katz said, Democrats at the time labeled Naylor’s amendment a political ploy to make Democrats look like they favored increased taxes. However, political insiders from both parties said the Katz-Thoreson race is the first time since that vote that the issue has been resurrected in a campaign.

Legislative experts say that, even if the Naylor amendment had passed, it would have been declared unconstitutional. The Legislature cannot take away the taxing rights of Los Angeles or other charter cities, said Dave Doerr, consultant to the Assembly Revenue and Taxation Committee. Jeff Druyun, one of the City of Los Angeles’ legislative analysts, said the only way the city’s right to tax could be denied would be through a constitutional amendment.

But Thoreson, an auto-theft detective in the Los Angeles Police Department’s Rampart Division, remains unconvinced.

“I’ve talked to Naylor,” he said. “He says it’s not so. I’ve talked to other assemblymen. They say that’s not so.”

Charges Misrepresentation

Counterattacking, Katz said that, if Thoreson “was really that upset about it, he could have gotten the correct number of signatures, put it on the ballot and done something about it.” He accused Thoreson of “grasping” and “misrepresenting the facts” surrounding the utility tax.

But Thoreson’s campaign manager, Don Ediger, said Thoreson plans to continue to use the utility-tax issue in the closing days of the campaign.

“Our strongest issue, our most visible issue is the utility tax,” Ediger said. “You can safely assume we will continue to hit him on it.”

The City of Los Angeles, which last raised utility taxes in 1983, will generate $292 million this year from the taxes. The money, put into the general fund, helps pay for such operations as the police and fire departments, parks and libraries.

Druyun said the revenue is crucial to the operation of the city, which has a projected budget of $2.3 billion this year.

According to city statistics, the average monthly residential electric bill is $29.66, which puts the tax at $2.96. The average residential gas tax is $3.17 a month. The average phone bill was impossible for the city to calculate because of confusion following the breakup of American Telephone & Telegraph’s monopoly over phone service. There is no tax on water.

Rex Olliff, a finance specialist with the city, said the 10% tax is scheduled to roll back to 5% next year, although the City Council could decide to keep the rate at 10%.