El Segundo Sets Special Election on New Taxes

El Segundo City Council members, uncertain whether a recent court decision lets them impose new taxes without a citywide vote, have decided to hold a special election on two tax measures.

After meeting in special session Tuesday night, council members let stand their earlier decision to schedule the March 7 election.

The measures would increase taxes for businesses and property owners and raise an estimated $6 million for the financially strapped city.

Council members held the special session to reconsider the issue mainly because canceling the election would have saved the city an estimated $20,000, according to Councilman Scot Dannen. However, if it had been canceled, the council majority--made up of Dannen, Mayor Carl Jacobson and Councilman Jim Clutter--could have enacted whatever revenue measures they preferred, and they have opposed higher taxes on residents.

A Reluctant Compromise

The council’s November decision to put the two measures on the ballot, which under state law requires four votes, was a compromise with which no council member was happy.

The council majority reluctantly agreed to put the measure affecting property owners, including residents, on the ballot only after Councilmen Alan West and Bob Anderson insisted on it. West and Anderson have generally opposed imposing any new taxes on businesses unless new taxes are also imposed on residents.

On Tuesday, the council decided to proceed with the election after it was confronted with conflicting legal interpretations of a decision handed down by the Court of Appeal in Santa Ana last September.

The appeals court, in an opinion written by Justice Thomas F. Crosby Jr., invalidated Proposition 62, the initiative sponsored by Howard Jarvis in 1986 that required voter approval for all taxes imposed by cities.

Confusion Over Approval

The court’s ruling held that the city of Westminster had the authority to impose a utility users’ tax without voter approval.

El Segundo City Atty. Leland Dolley interpreted the higher court’s ruling to mean that the El Segundo council could impose new taxes without a citywide vote.

But the attorney for the city clerk’s office, Stephanie Sher, interpreted the ruling to apply only to cities that imposed taxes before the passage of the proposition.

The Westminster City Council enacted that community’s utility user’s tax in September, 1986, less than two months before California voters approved Proposition 62.

Even though El Segundo will hold an election, Councilman West called it a waste of taxpayers’ money because the council has yet to reach final agreement on an overall fiscal strategy for the city.

“We don’t have our act together,” he said. “. . . I think it is time to step back and look at our needs and itemize them in great detail.”

The Right to Decide

But Dannen said the election should tell council members how voters want the city’s money problems to be solved. And regardless of the confusion over the recent court decision, he said, the electorate should have the right to decide tax issues.

“If the voters do not have the right to vote on these taxes, they should,” Dannen said.

One of the measures on the ballot would impose a $60-per-unit tax on residential property. Owners of non-residential property of less than 5,000 square feet would pay a flat rate of $200 a year. Larger businesses would be taxed according to floor space.

The other measure would boost the utility user tax, which applies only to businesses, to 4% and make it permanent. The current 2% utility tax is due to expire in 1991.

The measures will require a simple majority to pass.