Anaheim Council Voids Utility Tax, Cuts Own Salaries

In a surprise move Tuesday, the City Council voted to rescind a recently approved 4% utility tax imposed because of a budget shortfall and to cut their own salaries by 30%.

The tax was to take effect Sept. 1 and would have added about $5 a month to each household utility bill for the costs of electricity, water, telephone and gas.

Citing a groundswell of anti-tax sentiment in the city, Councilman William D. Ehrle proposed the changes and provided the swing vote to shift the council majority against the tax.

“I’ve come to the decision our proposed utility tax would only be an economic bandage for the hard times we face and would not be a sound solution for the city of Anaheim,” Ehrle said.

Councilmen Tom Daly and Irv Pickler joined Ehrle in voting to rescind the tax. Mayor Fred Hunter and Councilman Bob D. Simpson favored keeping the tax. “It’s easy to say, ‘No new taxes’ and walk away,” Hunter said.

The vote drew applause from members of the recently formed Anaheim Anti-Tax Coalition, which claims to represent renters, business people and homeowners associations opposed to the new tax.

“We were very surprised about the developments, and pleased,” said Amin David, a member of the group.

“They were wise enough to not try and fight this thing,” added Dennis Hardin, another group member. “It would have been political suicide.”

Officials estimated that the utility tax would have generated about $12 million in revenue, enough to cover the city’s $10-million budget shortfall in the fiscal year that started July 1. The cut in council salaries--from $1,000 to $700 a month--will fall considerably short of making up that deficit.

But Ehrle also proposed a 5% salary cut for city administrators and a 5% reduction in work hours for employees who are paid by the hour. In addition, he suggested closing City Hall for one day a month and offering early retirement packages to employees as other ways to save money.

The president of the employees union criticized those proposals and vowed to oppose them.

Tuesday night’s votes to rescind the tax and cut salaries for council members were preliminary ones. The council will vote again on the resolutions Aug. 6 and Aug. 13, and may also consider other cost-cutting measures.