Council Does an About-Face on Tax Hikes : Budget: The vote, however, simply delays politically sensitive decisions on program cuts and tax and fee increases, and does little to resolve a projected $60-million shortfall.

Backing down from plans to ask city voters for a huge revenue increase to fund next year’s budget shortfall, the San Diego City Council on Wednesday placed just one new tax-hike proposal and a request for a four-year spending waiver on the June 5 ballot.

The proposal to borrow $25 million to pay for a police and fire communications system would cost the owner of a $150,000 home $9 a year in property tax increases--far less than the $246 package of tax and fee hikes that received tentative council approval Feb. 8. Under Proposition 13, the tax increase must be approved by two-thirds of city voters.

“Victory for taxpayers!” said Councilman Bruce Henderson, the council’s most ardent opponent of new taxes. “We got back to the reality that we have $432 million . . . and I personally believe we can live within that amount.”

Just a month ago, the council enacted a $20-million property tax increase and gave preliminary approval to $81.7 million in new fees and taxes for next year’s budget.

The tax increase was rescinded two weeks later in the face of a public outcry, and Wednesday the council retreated farther by not even considering proposals to establish a utility users tax for business and industry or rescind free trash pickup for homeowners. Another proposal to ask voters for authority to dip into water utilities funds also was defeated.

But the council could still enact many of the revenue measures itself, after City Manager John Lockwood formally unveils his fiscal 1991 budget proposal in mid-May. In effect, Wednesday’s vote just delayed politically sensitive decisions on program cuts and tax and fee hikes until May or June.

It also did little to resolve the $60-million budget shortfall that Lockwood has forecast for fiscal 1991, which begins July 1. Lockwood has told the council he will have $432.6 million to spend next year, $60 million short of the revenue needed to keep city services at current levels, and he has warned of sharp cuts in police, library and park and recreation services if the money is not raised.

“They pushed it off so the community doesn’t have to participate in it, that’s what they did,” said Mayor Maureen O’Connor, who wanted voters to consider a utility users tax on business and industry and other taxes and fees. “They have said, ‘Voters, we don’t want to go to you and ask your opinion.’ And I’m not afraid of the voters.”

But Councilman Ron Roberts, who now favors council enactment of a $60-million package of new taxes and spending cuts, said he was “generally pretty satisfied” with the outcome of Wednesday’s crucial vote.

“With the exception of the communication system, which they’re going to put on the ballot, I feel pretty good,” Roberts said. The councilman, who supports spending for the communication system and increased police staffing, believes that loading the ballot with a series of tax hikes would doom them all--as well as the Gann spending waiver that will allow the council to spend new city revenue in fiscal years 1992 to 1995.

Roberts promised to bring his proposals back before the council later this year.

O’Connor predicted that the council will enact some tax and fee increases without voter approval this spring, further weakening government credibility, which she said has been badly damaged by recent votes to raise council salaries, remodel offices and expand council staffs while warning of a looming budget crisis next year.

“The system has to change at City Hall. Someone has to be in charge,” she said. “And right now, you have a very green council that has five votes making some very poor decisions.” Five votes constitutes a majority on the nine-member council.

But Henderson said the council would not dare to raise taxes without a popular vote.

“I don’t think there are five votes on this council to raise taxes without a vote of the people,” he said.

A vote before June 5 might doom the Gann waiver, “and if they do it after that, people will go crazy,” Henderson said. “There will be a referendum.”

The Gann waiver would authorize spending of $273 million in new revenue that the council expects to take in during the four fiscal years. Most members of the council, including O’Connor, who voted against placing it on the ballot Wednesday for procedural reasons, have described the waiver as vital to the city’s operation during that period.

Without the waiver, the city would not have the authority to spend more money than it will in fiscal 1991, even as the city grows and inflation drives up costs. A similar measure barely passed in 1987, the last time it came before voters.

The council also placed on the ballot two measures mandated by the Sept. 13 legal settlement of a voting rights lawsuit filed by the city’s Chicano Federation.

One measures asks voters to approve an expansion of the council from eight seats to 10, effective in 1993. A companion proposal would allow a one-time waiver of a charter provision that prohibits redistricting of boundaries more than once in four years.