Compton Proposal to Raise Utility Tax Sparks Opposition

A proposal to raise utility-tax rates by 40%--to offset a multimillion-dollar loss of federal revenue sharing--met a tide of opposition Tuesday in the first of two public hearings before the City Council.

Business leaders and residents alike streamed to a council microphone mostly to complain that local taxes already are too high and that officials have announced no formal plan as to how they would spend the money.

“The answer from the business community is ‘No’,” said Ernest Spears, a director of the 260-member Compton Chamber of Commerce.

“The people of the City of Compton are overtaxed,” added resident Lynn Davis, angry that she and other homeowners were not individually notified of the pending increase. The hearing was advertised in a local newspaper and other notices were publicly posted, thus meeting the city’s legal obligation.

Residents who supported the tax increase, although they were outnumbered at the hearing by more than 2 to 1, included Sidney Bowen, who argued that such an increase is vital if officials are to replace the money that used to come from the federal program. Revenue sharing pumped more than $2 million annually--the largest amount given any city in Southeast Los Angeles County other than Long Beach--into Compton’s coffers until Congress eliminated the 14-year-old program last year. Compton’s final $451,000 appropriation ran out when the fiscal year ended June 30.

‘Stop Thinking of the Pennies’

“Think of why we need the tax and stop thinking of the pennies,” Bowen urged the council and an audience that included cable television viewers. “Our basic city services are in danger . . . . If you believe that (revenue sharing) money’s coming from Ronald Reagan, you’re mistaken. . . . If you believe it’s coming from Gov. Deukmejian, you’re mistaken.”

The proposed increase, to be debated at a final hearing at 3:15 p.m. Tuesday, would raise the city’s 5% monthly utility tax to 7% and generate about $1.2 million, city administrators said. It would mark the first rate increase since the tax was established in 1969. (Council members killed a proposal in February that would have raised the utility tax to 9%.)

The average residential user of gas, electricity, telephone and water service would see the assessment rise about $2.19 a month, from $5.47 to $7.66, officials said. According to a city survey, the average residential customer in Compton pays $29.60 each month for gas, $29.42 for electricity, $35 for phone service and $15.46 for water, for a total of $109.48.

The average commercial customer, who uses substantially more electricity, gas and other other utilities, would pay from $7 to $9 a month more for each one, officials said.

But such an increase could compound already “severe” financial problems faced by businesses like Kraco Manufacturing, company Vice President Dick Stover told the council. Kraco already pays $1.2 million a year in utility taxes, Stover said. The increase would cost another $26,000 at a time when production costs have risen 37% to 40% above last year, he said.

If the tax is approved, Stover said, the family-owned automobile parts firm might consider leaving Compton, its home for 37 years. The firm employs 600 to 700 workers, 90% of whom live in the job-hungry cities of Compton or neighboring Lynwood.

“I don’t think raising taxes is the only answer to the problem,” Stover said.

1,000 Sign Protest

Joe Ochoa, vice president of the Latino Chamber of Commerce, said his group already has gathered 1,000 signatures of people who oppose the tax increase. “If we have to, we’ll bring in 5,000 signatures,” he said.

City officials have said that the tax increase would help pay for needed improvements in police protection and other fundamental services. No specific spending list has been presented, however.

Kelvin D. Filer, president-elect of the Compton chamber, suggested that the city support Secretary of State March Fong Eu’s plan to raise funds for law enforcement with a 10% increase in the state sales tax on liquor. Filer also noted that some officials have suggested that the tax increase would help pay for a new police helicopter and new police dog units--expenditures he thought were already being paid for out of the recently approved 1987-88 budget.

“The helicopter’s got to be serviced,” Mayor Walter R. Tucker replied. “The dogs have got to be fed.”

Methods to Save Described

But Councilman Maxcy D. Filer said that “there are plenty of places we can get the money from” other than a utility tax increase. He said the council could save $864,521 by eliminating a variety of travel expenses, a liability insurance reserve and the salaries of two assistant city managers recently added to the city staff.

“We just passed a sewer tax,” the councilman said. “We just raised the rubbish rate. All of that money is coming out of the same pocket,” he said in reference to the residents.

Tucker then suggested that if the city really wanted to save money, it could drop the Police Department and contract with the Los Angeles County Sheriff’s Department instead. While Compton pays $13 million for its police force, the neighboring City of Carson pays only $6 million for Sheriff’s Department services. Both cities are about the same size, Tucker said.