Faced With Shortfall, City Council Gives Tentative OK to 5% Utility Tax

Citing a $550,000 budget shortfall and the lingering threat of harsh revenue cutbacks by the state, the South Pasadena City Council last week tentatively approved a 5% utility tax that is expected to produce as much as $1 million annually.

After a public hearing of nearly two hours, the council voted 5 to 0 to approve the city’s second utility tax in the past five years. A similar tax was installed in 1987 but was phased out in less than two years, after it had collected $1.2 million for various construction projects.

The new tax, which drew strong approval from the majority of speakers at the public hearing, will be applied to telephone, gas, electricity and water bills. City officials estimate it will cost the average household an extra $10 to $15 per month.

In approving the utility tax, the council rejected a staff recommendation that the issue be placed before voters as an advisory measure in November.

Councilman James S. Woollacott Jr. argued that the additional revenues are needed immediately and that the city would be forced to spend $10,000 to place the measure on the November ballot.

Councilman Paul Zee, who at the council’s July 1 meeting lobbied for putting the measure on the ballot, changed his stance after talking with citizens and studying the results of a city-sponsored survey in which 53% of 900 respondents favored the tax.

“I wanted to see more support from the community, and now I see that,” Zee said.

The measure, which requires that the council re-evaluate the tax rate at least once a year, exempts low-income residents and disabled war veterans. The council scheduled a special session for 7 p.m. Monday to hold a final vote. If approved, the new tax would take effect immediately.