Westminster Utility Tax Issue : Ruling Against Prop. 62 Hailed

For months, Westminster’s acting City Administrator Robert Huntley has had to defend the city’s fight against Howard Jarvis’ Proposition 62, which would void the city’s utility users’ tax and mean an annual $2.5-million loss to the city.

But on Thursday, a jubilant Huntley, who has faced a tax protest by an estimated 500 residents who have refused to pay the utility tax, said he hoped that some city residents “will now understand our fight.”

Huntley’s comments were in reaction to Wednesday’s decision by a Sonoma County judge who ruled that Proposition 62 is unconstitutional--the opposite of what an Orange County judge decided last January in a similar case brought by Westminster.

Westminster has appealed a decision by Superior Court Judge William F. McDonald, who ruled against the city Jan. 12 when he found Proposition 62 “constitutional and enforceable.” Proposition 62, a statewide initiative approved in November, 1986, requires that new or increased general taxes be approved by the voters.

As a result of McDonald’s ruling, Westminster could lose $2.5 million in annual revenue it receives from the utility user tax imposed by the City Council in September, 1986, two months before Proposition 62 was approved. That figure amounts to about 12% of the city’s $20-million annual budget and its loss could mean “serious cutbacks” by 1989, Huntley said.

McDonald’s ruling came in a lawsuit challenging the portion of Proposition 62 that says any new or higher general taxes enacted by local governments after July 31, 1985, can be collected after Nov. 5, 1988, only if endorsed by the voters.

But it has been the city’s position that the law needs clarification and that it should be sent to the state Supreme Court for resolution, Huntley said.

In a decision disclosed Wednesday, Superior Court Judge Laurence K. Sawyer in Santa Rosa said the state Constitution exempts tax statutes from the referendum process. He ruled in a lawsuit filed by the Sonoma county administrator against the county auditor. The case does not directly affect the Westminster case.

The judge based his ruling in part on a 1957 case in which a court said the reason for excluding tax laws from the referendum process was “to prevent disruption” of government through “interference with the administration of its fiscal powers and policies.”

“It’s exactly the argument we had maintained Proposition 62 was doing to us here in Westminster,” Huntley said in an interview Thursday.

“Perhaps residents won’t think we’re spending city money frivolously now,” Huntley added.

To date, the city has incurred about $25,000 in legal costs, Huntley said.

However, one Westminster resident who supports the protesters remained unconvinced that Wednesday’s opinion would change their minds.

“Hell no. This new opinion won’t change anything. Why would it?” said Anthony Bitonti. “There are many residents in the city who believe that the city’s passage of the utility users tax was wrong and unnecessary. They still intend to protest.”