Council Locks In Series of City Taxes

As it has every year since 1983, the City Council on Friday extended a series of “temporary” taxes on items ranging from utilities to hotel beds. But this time, at the urging of Councilwoman Joan Milke Flores to “stop fooling ourselves,” the council struck the one-year-in-effect clauses, effectively making the levies permanent.

The council spent only a few minutes discussing the measure, expected to bring more than $200 million a year to city coffers, before approving it 13 to 0.

The speed at which the action swept through the council surprised even some veteran City Hall staff members, who remember the long and acrimonious debates these taxes have spawned in past years.

“Everybody knows they’re not temporary,” said Flores as she recommended removing the so-called “sunset” provisions from the ordinances. Those clauses provided that the taxes would expire in one year unless the council voted to renew them.

Councilman Zev Yaroslavsky quickly seconded the motion and urged members to support the measure, even though he has said it is a healthy exercise for the council to review the taxes annually.

Only Councilman Nate Holden voiced any protest. “We’re talking about forever,” he cautioned his colleagues. But even Holden voted in favor of the measure when he was reminded that the city already is counting on the funds the taxes will generate in the coming fiscal year’s $3.2-billion budget.

“There’s no way to cut $200 million out of the budget,” said City Administrative Officer Keith Comrie. “It’s just part of our tax base now.”

The four taxes are:

* A utility user’s tax--the largest of the four--of 10% of gas, water and electric bills. This surcharge is estimated to raise $163 million in the coming fiscal year, according to Comrie.

* A business tax, levied at a sliding-scale rate of from 1/10th of 1% to 1/2 of 1% of gross receipts; it is expected to raise $17 million.

* A hotel bed tax of 12 cents per room per night, expected to bring in $15 million.

* A sanitation equipment charge, costing each single-family household in the city $1.50 a month, which will yield an estimated $11 million.

The taxes, which have withstood legal challenges, are not restricted by 1978’s statewide tax-cutting initiative, Proposition 13.