Pomona Council Deadlock Kills Payroll Tax Plan

An attempt to shift part of the city’s tax burden from utility customers to those who work in the city failed this week when the City Council refused to place the matter before the voters.

After a vociferous debate Tuesday night, the council split, 2 to 2, on a measure that would have allowed voters to decide whether they preferred a 1% payroll tax over the existing 11% utility tax. Councilman Mark Nymeyer, who first proposed the idea but later withdrew his support for the tax, was absent.

Councilman C. L. (Clay) Bryant and Councilwoman Nell Soto argued that Pomona residents should vote on an advisory referendum on the payroll tax proposal, which has met vehement opposition in Pomona’s business community.

“The public are the ones we serve, they’re the ones who are paying the bills and they’re the ones who are suffering under this utility tax,” Bryant said.

Stack of Letters

However, Mayor Donna Smith and Councilman E. J. (Jay) Gaulding said they opposed the tax because it would drive business out of the city. Smith presented a 2-inch-thick stack of letters she said were from business owners opposed to a payroll tax.

“That kind of shows you some of the opposition I’ve received,” Smith said. “. . .This (tax) is only going to shrivel up business.”

In response to Bryant’s call to “let the people decide,” Gaulding and Smith said it was the council’s prerogative to determine whether a payroll tax should be imposed.

“This is a constitutional representative republic, not a democracy,” Gaulding said.

Smith said a citizens’ vote on the measure--which she said could cost as much as $50,000--would be an expensive way for council members to shirk their political responsibilities.

“We are supposed to be representatives and leaders, and we are going to be the ones blamed 10 years down the road if businesses don’t come into the city,” Smith said. “If this is such a good idea, why don’t we vote on it tonight?”

Bryant accused Smith and Gaulding of caving in to pressure from business interests.

“They have been leaning on this council, and this council doesn’t have the guts to stand up to them,” Bryant said.

However, Gaulding said he opposed the payroll tax not only for its effect on business but because it would unfairly shift the burden from those who live in the city to those who work in it. He added that a payroll tax would involve a lot of paper work and could be difficult to enforce since employees could be paid by branches of a company outside of Pomona.

“The thing that’s wrong with the payroll tax is the inequities in it,” Gaulding said. “I don’t think the payroll tax is going to do anybody any good, because everybody’s going to circumvent it as much as they can.

“I don’t like the utility tax . . . but it’s the only thing we have to keep this city going.”

Although he did not get the measure on the ballot, Bryant said after the meeting that he came out ahead on the issue, since he had vowed to propose the payroll tax during his council campaign last fall.

“I was in a win-win situation,” Bryant said. “I tried to do something for the people, and if (other council members) opposed it, they’re going to be held accountable for that.”

Smith rejected the idea that she was ignoring the will of the public by not placing the payroll tax proposal on the ballot.

“I haven’t heard an outcry of people saying, ‘Replace the utility tax with a payroll tax,’ ” Smith said. “If there really are people who wanted it on the ballot, they can do that with a citizens’ initiative.”

Admitting that the payroll tax is a dead issue, Bryant said he will now seek a spending and hiring freeze to help the city reduce its utility tax.

Also at its meeting Tuesday, the council unanimously passed a motion by Smith to have the city staff consider various means of lowering the utility tax, including spending cuts and a “split-rate” tax under which businesses would pay more than residential customers.