Lawndale Council to Vote on Tax Measure : Revenues: Council members are divided on putting proposed 2% levy on utilities on November ballot.

A proposed ballot measure that would impose a 2% tax on water, gas, electricity, cable and telephone services for Lawndale residents and businesses will be taken up tonight by a divided City Council.

At the meeting, scheduled to begin at 7 p.m., the council is also to vote on a no-growth budget that projects shrinking revenues. Noting this, Mayor Harold Hofmann and Councilman Larry Rudolph have said they would support the tax proposal as a way to raise revenues for the tightly squeezed city.

But Councilwoman Carol Norman has vowed to vote against placing the measure on the ballot, and Councilman William Johnson said he is unlikely to support it unless the entire council is in favor of it.

“The only way it will fly is if every one of us wants it,” Johnson said. “Without the entire council consensus that they want that to go, I don’t think the voters are going to support it.”

Because there is a vacant council seat, a 2-2 vote would prevent the measure from appearing on the November ballot.

Proponents of the proposed utility tax say Lawndale is the only city in the South Bay that does not tax its residents and businesses on at least some utilities. In addition, they say, the proposed rate of 2% is smaller than that charged by any other neighboring city.

“We’re at the point right now where our revenues from every source--the county, the state, the (federal government)--are cut back,” Rudolph said in an interview this week. “I feel we ought to put it (the proposal) before the voters and let them decide.”

But opponents of the measure, which needs a simple majority of votes to pass, say Lawndale prides itself on being a city with low taxes and that a utility tax should be considered only as a last resort.

“It’s a regressive tax,” Norman said. “To some people, $5 is nothing. But to others, it means almost a week of groceries. . . . There are other ways to address our problems: restructuring business licenses, adding some fees for things that have been free for a long time.”

The tax, she said, “is a lazy way out.”

Lawndale’s finance director, Judith Longman, said that the tiny, blue-collar city of 27,000 residents desperately needs the $240,000 a year that the tax would be expected to generate.

“Most cities do have a utility users tax,” she said. “It’s very unusual not to have one at all. If the city is going to continue to maintain service levels as it has in the past, new sources of revenue are absolutely essential.”

If approved by the voters, the measure would go into effect Jan. 1. Revenues from the tax would be unrestricted and would go into the general fund to pay any of the city’s expenses. Because it is a general tax not earmarked for any particular service, it only needs the approval of a simple majority of voters, rather than two-thirds.

A homeowner who pays $100 a month for all his utilities would pay $2 more under the proposed measure, Longman said. Although businesses would be charged at the same rate, they would probably end up paying more because their utility bills tend to be higher, she said.

According to a survey published last month by the California Municipal Business Tax Assn., Lawndale’s proposed tax rate is “very modest” compared to that of any neighboring city, Longman said. Lawndale’s proposed tax, however, would cover more utilities than some of the taxes imposed by other cities.

Residents of neighboring Hawthorne, for instance, are taxed 3.5% on their electricity, gas and telephone services, though not on their water and cable services, Longman said. Gardena residents pay a 4% tax on their electric, gas and telephone services, though not on their water and cable. Redondo Beach charges its residents a 4.7% tax on all their utilities, she said.

Although each of those cities exempts senior citizens from the tax, and two of them exempt low-income residents, Lawndale’s proposed measure would make no special provisions for its elderly or low-income residents, Longman said.

“If we exempted senior citizens and low-income residents, we would exempt practically all the residents in town,” Longman said. “This is not a young city.”

But Lawndale resident and community activist Nancy Marthens said the lack of an exemption for seniors is just one more reason she plans to campaign against the tax if it is placed on the ballot.

“I think it’s a last-minute (proposal) carelessly thrown together to try to defray budget deficiencies,” Marthens said. “Most of us are already being taxed to the limit, as things currently stand. . . . I don’t want to see (the tax) become a vehicle to take care of deficient budgets in the future.”

Pete Paley, former president of the Lawndale Chamber of Commerce, agreed that seniors should be exempted from the tax. But, he said, he believes the tax is fair because the city has been relying too much on business revenue to pay for its operating expenses.

“I think they really need to generate some funds for the city, and that’s probably one of the better ways to do it,” Paley said.