Utility Tax Erased but Fight Goes On : Budget: Anaheim council will convene in special session Friday to find money to avoid cuts. Despite acrimony of last meeting, both sides see room for compromise.

With the specter of layoffs and program cuts looming, Mayor Fred Hunter has called a special meeting of the City Council on Friday to deal with a budget crisis caused by the council’s decision to rescind a 4% utility tax.

Hunter, whose name-calling battle with Councilmen Tom Daly and Irv Pickler at Tuesday’s council meeting squelched any possibility for compromise then, said he called the special session because “I know there is a compromise out there.”

The meeting is scheduled for 9 a.m. at City Hall, 200 S. Anaheim Blvd.

Councilmen William D. Ehrle, Bob D. Simpson and Pickler also said Wednesday that an agreement is possible.

“I agree with the mayor that there is a compromise out there,” said Simpson, a backer of the 4% tax who is now pushing for a smaller tax with more restrictions. “Obviously there was a lot of emotion at the council meeting, and that is not good for making logical decisions.”

Daly, however, said he would continue to oppose any utility tax because the city-owned utilities already turn an $8-million annual profit.

If no compromise is reached, the city will begin the process of laying off about 50 full-time workers and making cuts such as the Pearson Park summer play series and the Corporate Challenge, an Olympics-style competition between businesses. Without new tax revenue, another 150 jobs and more programs could be lost.

Amin David, a leader of the Anaheim Citizens Against Taxation, the group formed to oppose the utility tax, said his group would “strongly” oppose any utility tax.

“We are steadfast in that we want no tax increase imposed on the residents of this city,” David said.

The council by a 3-2 vote Tuesday rescinded the 4% utility tax it had passed last month. Daly and Pickler, both of whom had opposed the tax originally, were joined by Ehrle in voting to rescind the tax. Ehrle said he changed his mind last week after realizing that businesses in the city are already overtaxed.

If no compromise can be reached, the council will order the elimination of dozens of jobs, including an assistant city attorney, a jailer, clerks and secretaries, cuts in City Hall supplies and call a halt to all unnecessary employee travel.

City officials said that if no utility tax is passed, the city might have to ground the Police Department’s helicopter fleet and close senior centers, library branches and recreation facilities.

But those programs appeared safe Wednesday, as Hunter, Pickler, Ehrle and Simpson all said they would oppose cuts that deep.

Ehrle said that it is unfortunate that people will have to lose their jobs but that he favors trimming the city’s 2,200-member work force because it is too large.

“Just because somebody works for the government does not mean they are guaranteed a job for life,” Ehrle said. “In business, when revenue is down, operations are consolidated and people are released, and the city should be no different. That is the hard business decision that has to be made. “

A compromise measure now being pushed by Simpson would create a temporary utility tax of 2%, 2.75% or 3% that would be abolished in two years. He also wants to stipulate that no business would have to pay more than $50,000 a year for each electric, gas or water meter. Households with incomes of less than $20,000 a year would be exempt.

Simpson said that he still supports a 4% tax because that would allow the city to hire more police officers but that he will take “as much as he can get.”

He said his compromise would allow the city to ride out the recession and “make wise decisions about what programs we are going to cut.”