Carson Rejects Utility Tax; 47 Jobs Threatened : Budget: Council OKs 40% increase in business license fees, but that will not avert proposed staff cutbacks.

The Carson City Council, faced with potential budget cuts because revenues have not kept pace with expenditures, approved an increase in business license fees Tuesday but rejected a controversial proposal to levy a utility users tax that would have added up to $1.6 million in new revenue.

The council is considering a $29-million spending package for 1990-91 that would require laying off 47 full-time and part-time employees. Carson officials estimate the city will receive $29 million in revenues and that the proposed budget would not require dipping into the city’s $7 million in reserves.

The proposed 1% tax could have been imposed on a variety of utilities, including telephone, electric, gas, water and cable television services.

Councilwoman Sylvia Muise, an outspoken proponent of a utility users fee, said a 1% tax on electricity alone might have saved up to 30 jobs scheduled to be cut under the most recent budget proposal.

However, a majority of residents and business representatives in an overflow crowd at Tuesday’s council meeting spoke against the tax.

Walter Neil, president of the Carson Chamber of Commerce and a representative of Fletcher Oil Co., told the council that businesses in the city might be prompted to relocate if the tax were approved. Under the proposed 1% tax on electricity, Fletcher Oil Co. would have paid a $50,000 utility tax, Neil said.

The council rejected the utility tax proposal 3 to 2, with Mayor Vera Robles DeWitt, Mayor Pro-Tem Kay Calas and Councilman Michael Mitoma voting against the measure. Councilwoman Juanita McDonald joined Muise in support of the tax.

Muise on Wednesday said the council “can’t have it both ways” in attempting to maintain the current level of city services without increasing revenue to balance the budget. The decision on the utility tax has left her frustrated and irritated, she said.

The council unanimously approved a 40% increase in business license fees based on the change in the consumer price index since the fees were last raised in 1983. The increase is expected to generate $386,000 in additional revenue. A $100 fee for processing new applications for business licenses is expected to bring in $40,000.

However, the additional income is already figured into the city’s most recent budget proposal and will not avert proposed cutbacks, City Administrator Jack Smith told the council.

In light of widespread community opposition to proposed cutbacks, it is unclear when the council will vote on the spending plan for fiscal 1990-91--which began July 1--or whether council members are willing to follow through on pledges to adopt a balanced budget, according to council insiders.

“Do you think I know?” Muise asked Wednesday, reflecting on the current budget situation. “All I can say is that I won’t approve a (deficit) budget.”

Last year, the council passed a $34.8-million budget but spent only $29.9 million after instituting a hiring freeze and cuts in capital purchases midway through the year to reduce an anticipated deficit. However, the city still spent $2.2 million from its reserves to balance the 1989-90 budget, which was adopted midway through the fiscal year.

The next workshop on the budget is scheduled for Oct. 30 at 9 a.m.