2 Cities OK New Taxes, 2 Reject Them on Eve of Vote

City councils in Compton and West Hollywood approved new taxes at meetings Monday, but councils in Pomona and San Fernando rejected revenue-producing measures proposed to beat the possible passage of Proposition 136 on today’s ballot.

If Proposition 136 passes, it will take effect at midnight tonight and prohibit local communities from imposing new taxes without first getting voter approval.

At a special meeting Monday, the Compton City Council agreed to double its utility tax from 5% to 10%.

In a memo to the council, City Manager Howard Caldwell said the city needed the additional $3.6 million in utility tax revenues in order to prevent layoffs next year. Over the past two years, the city has had to lay off more than 100 employees in order to balance its budget.

Councilwoman Patricia A. Moore cast the only vote against the tax hike. She said it was the council’s responsibility to find some other way to generate the badly needed revenues.

The West Hollywood City Council adopted a business license tax by a vote of 3 to 2 over the vehement protests of about 30 opponents in the council chamber. Los Angeles County sheriff’s deputies removed two unruly protesters.

Designed to raise $1 million a year, the measure would impose a $270 annual tax, for example, on a business with annual sales of $565,000.

About 50 angry opponents crowded the San Fernando City Hall as council members considered a utility users tax, introduced to protect the city from the possible impact of Proposition 136.

“You’re damned if you do. You’re damned if you don’t. I’d rather be damned later than today,” said Councilman Jose Hernandez.

The ordinance, rejected on a 4-1 vote, would have established a framework enabling the council to quickly and easily enact emergency taxes on gas, water, electricity and telephone and cable TV service--without asking the voters--in case of a severe economic slowdown.

The Pomona City Council delayed action on seven revenue measures that would have raised $1.7 million a year after residents accused the council of trying to circumvent Proposition 136.

At least some of the proposed taxes and fees, including a 10% tax on interstate and international telephone calls, would require a vote of the people under the proposition.

The council approved a surcharge on trash at the Spadra landfill to raise $102,000 a year, but city officials said that fee would be unaffected by the ballot measure. The council delayed action on proposals to quadruple the transfer tax on real property, levy a fee on rubbish haulers of 5% of their gross receipts, and change the fees for construction contractors.

Proposition 136, the brainchild of those allied with the Jarvis-Gann anti-tax crusaders, would prohibit a city or county from enacting a new general-purpose tax or increasing an existing one unless the voters approved.

A new or increased special-purpose tax, such as a levy to pay for increased police protection, could not be enacted without a two-thirds vote.

This article was reported by Times staff writers Anita Cal, Aaron Curtiss, Michele Fuetsch and Mike Ward.