Alhambra : Homes Get Gas Tax Break

As part of an overall plan to phase out utility taxes, the city has dropped gas taxes for residential customers, City Manager Kevin Murphy said.

Deletion of the gas tax was approved by the City Council last May and became effective Jan. 1, Murphy said. Tax savings will be reflected in residential gas bills in January or February.

The city adopted 5% taxes on water, electricity, gas, telephone and cable television in 1983. Murphy said the taxes were approved because of a recession and reductions in state and federal funding.

As new development projects generated additional property and sales taxes, the city began phasing out portions of the utility tax, he said. The utility tax on water was eliminated in 1987 and the one on electricity was phased out in 1988.

The tax on telephones is scheduled to be deleted in January, 1991.

Sales taxes from new businesses have made up for lost utility tax revenues, so no city services have been cut, said Murphy.

Murphy does not anticipate that utility taxes for commercial customers will be phased out. Businesses pay $1.5 million of the $2.7 million collected in utility taxes, he said.

“I don’t know how we can take off another $1.5 million,” Murphy said.