Anaheim Considers a Tax on Utilities to Close $10-Million Budget Gap : Deficit: A 3% levy would be added to the utility bills--water, electricity, gas, telephone and possibly cable television--to balance the city’s $544.1-million budget.

Looking for ways to close the gap on a $10-million budget deficit, city officials said residents could get hit with a new utilities tax that would make it more expensive to turn on the tap, light switches, stove and cable television.

The utilities tax is one of five separate tax increases under consideration to balance the city’s $544.1-million budget for 1991-92, which was filed Thursday at City Hall. But, officials say, a utility tax is the only revenue source that could nearly wipe out the deficit and keep 90 municipal employees, including some police and firemen, from losing their jobs.

“Another round of (employee) cuts would be absolutely devastating,” City Manager James Ruth said.

To pare what had been a $20-million deficit over the next two years, Ruth said the city has proposed to eliminate 97 other positions, cut the city library schedule from six to five days per week, curtail park maintenance and discontinue some services including a summer day-care program.

Up to five maintainence workers will lose their jobs under that proposal, but the remaining 92 positions scheduled to be cut are currently vacant.

The City Council is expected to review the proposed budget and staff recommendations at a work session June 11.

Under the proposal for the utility users’ tax, city staffers said a 3% levy would be added to the utility bills--water, electricity, gas, telephone and possibly cable television--of all city residences and businesses. The tax could generate about $9.6 million a year, according to city estimates.

“The general consensus right now is that a utility tax is the most equitable way to get out of this budget shortfall,” Mayor Fred Hunter said. “It’s the only option that has been seriously discussed. The next cuts would mean that police, fire and maintenance workers would be out the door, and I’m not going to let that happen.”

Hunter said discussions of a utility tax would include exemptions for low-income families and the elderly, although it had not been determined how those residents would qualify for exemptions. He also said it was unclear whether the city had the authority to tax the more than 38,000 cable television subscribers.

“We’re going to have to get some opinions on that from our city attorney,” the mayor said. “I don’t want to buy a lawsuit.”

Anaheim’s consideration of a utility tax comes a day after the city of Santa Ana proposed an increase in its utility tax to help cover a decline in revenue plaguing Orange County’s largest city.

“The national recession, combined with the Persian Gulf War, has especially impacted Anaheim’s tourist industry, which resulted in a significant reduction of ongoing revenues,” Ruth said in a letter to the City Council that accompanied the budget document. Especially troubling for the city have been declining sales tax and hotel tax revenues.

Although the city’s major capital improvement projects--the Sports Arena, proposed “people mover” project and downtown redevelopment--are not expected to be affected by the budget shortfall, Ruth said “there is no way” the city could accommodate Disney’s proposed $3-billion Westcot Center project and its demands for public contributions under the present fiscal conditions.

Although the entertainment company has yet to decide whether it will build its second Southern California theme park in Anaheim or in Long Beach, where it has proposed a 414-acre ocean theme resort called Port Disney, the company has indicated it wants the city to spend hundreds of millions of dollars to provide parking for the project, freeway improvements and other amenities.

Ruth said those projected demands on the city would be worked out in upcoming negotiations with the company, but he did not know how much money the city would be required to spend on the Disney development.

“Under the existing revenue structure, there is no way we could do it,” Ruth said in a briefing for reporters.