Taxes Raised to Avert Mental Health Cuts : L.A. County: Supervisors hike utility, motel, hotel and amusement park levies in unincorporated areas.

The County Board of Supervisors on Tuesday approved a package of new taxes, money transfers and countywide cost-saving measures that will protect the stricken mental health system from $41.9 million in program cuts.

To the cheers of hundreds of mental health advocates, the board approved--in a series of split votes--new taxes for utility users and raised the hotel and motel room tax from 10% to 12%. The two taxes are expected to raise $14.6 million in the remainder of this fiscal year. It also voted to levy a 2% tax on the gross receipts of amusement parks in unincorporated areas--Universal Studios and Magic Mountain. That measure would add about 50 cents to the price of a ticket and raise about $4 million this fiscal year.

The supervisors also agreed to contribute $250,000 from the contingency funds of each of their districts, for a total of $1.25 million.

Finally, they voted to impose belt-tightening measures on other county departments that would free $4 million for mental health programs, bringing the total bailout package to $23.85 million. That is just short of the $25.4 million the county Department of Mental Health said it needed to maintain its programs. The difference is not expected to affect programs, officials said.

Because the mental health system has been spending money it did not have since the fiscal year that started July 1, massive program cuts--an estimated $41.9 million--would have been needed to make up the deficit in the remaining months. The $24 million in new revenue will render those cuts unnecessary, officials said.

Mental Health Director Roberto Quiroz is to report to the supervisors next Tuesday on how the money will be used.

Quiroz has submitted eight reports to the board on what the impact on the mental health system would be if the supervisors did not come up with the money.

Programs earmarked for elimination would have left 27,000 of the mental health system’s 58,000 patients without care. He predicted that this would have led to increases in crime and swelled the numbers of mentally ill on the streets and in jails.

The supervisors struggled for four weeks with the choices before them. Each week, they had put off decisions and postponed the issuance of legally mandated, 30-day layoff notices to county mental health employees and contract clinics.

The Sheriff’s Department, among other parties, asked the board last week to approve new taxes rather than cut mental health programs. The department cited growing numbers of mentally ill prisoners, similar to findings of the National Alliance for the Mentally Ill, which in September described the Los Angeles County Jail as the “largest de facto mental institution in the nation.”

Presiding Tuesday over his first meeting as the board’s chairman, 5th District Supervisor Mike Antonovich pushed hard for the tax package that he had unveiled in more modest form the week before. Phone taxes were added to what was to have only been a users tax on gas and electric utilities.

The utility and hotel tax measures affect only residents and businesses in the county’s unincorporated areas. The 5% utility tax on phone, gas and electricity users would raise about $14.3 million between Jan. 1, when it takes effect, and the fiscal year ending June 30. The hotel/motel room tax would raise about $300,000 during that period, according to Richard B. Dixon, the county’s chief administrative officer.

The amusement taxes come on the heels of higher gas prices and a looming recession that could deter park patrons.

Magic Mountain spokeswoman Bonnie Rabjohn said, notwithstanding the tax increase, her company “has no plans to raise admission prices next year.” Magic Mountain charges adult $23 for admission and $14 for children under 48 inches tall.

A spokeswoman for Universal Studios, which charges adults $22 for admission and $16.50 for children ages 3 to 11, would not comment on whether her company would raise ticket prices or contest the supervisors’ vote.

About 1 million residents in the unincorporated areas will be affected by the taxes. Supervisor Deane Dana, supporting the package, said most county residents already are paying similar utility taxes levied by their municipalities and ranging from 4% to 12%.

Supervisor Ed Edelman, who has consistently opposed cuts in mental health services, supported every revenue measure, usually seconded by Supervisor Kenneth Hahn. Edelman tried three times to get the revenue monies boosted through belt-tightening to fully fund the mental health budget. He compromised on $4 million, which passed over Antonovich’s objection.

Antonovich warned of new state deficits on the horizon that will make it harder to maintain county services in fiscal year 1991-92, and argued that any money saved this year should be retained by departments as a cushion for their programs next year.

Pete Schabarum voted for belt-tightening and transfer of district contingency monies, but opposed all new tax measures, as he said he would last week.

Watching his traditional allies, Antonovich and Dana, argue for new taxes, Schabarum declared that the board’s “conservative majority” reputation had “died a death this morning.”

Mental health advocates were jubilant.

“I feel like I’ve given birth to a baby elephant,” said Anthony W. Harris, executive director of the Assn. of Community Mental Health Agencies, which represents 42 private mental health clinics under contract to the county. “What an incredible accomplishment!”

Millard Ryker, executive director of Community Counseling Service, a South-Central Los Angeles clinic destined for closure under Quiroz’s latest plan, savored the reprieve.

“I think it is tremendous that the supervisors chose to take this responsibility and do this,” Ryker said. “I think this means we are here to stay.”

Their glee was checked by the prospect of a tougher fight next year when another state deficit leads to new cuts in aid to counties. The crisis this year was triggered by a $71-million reduction in mental health funds ordered by Gov. George Deukmejian to help balance the state budget.

Lawmakers are already warning of a bigger state budget shortfall next year.

The state is “not going to take that battering alone,” Dixon warned. “They are going to share it with the counties.”

Times staff writer Jube Shiver contributed to this story.