LA HABRA : Council Approves 6% Utility Users Tax

The City Council approved a 6% utility users tax this week, arguing that the city desperately needs the estimated $3.3 million to $3.8 million that the new tax will raise over the next year.

Councilman David Cheverton said the utility users tax will cost the average household about $12 per month, based on gas, water, electricity, phone and cable TV bills amounting to $200. Each bill will contain the 6% tax.

“Quite honestly, I felt I had a gun to my head,” said Cheverton, who joined the council in unanimously approving the tax Tuesday. “This is going to allow us to bring our city budget back into balance for this year.”

The city’s current budget is about $12 million. Without the state’s funding cuts, it would have been $14 million, Cheverton said. “We’re basically just replacing money that the state has taken away from us,” he said.

The tax will probably not show up on utility bills for three to four months, Cheverton said, because the utility companies will need some time to process the change. The city will not see any new money until July, according to Cheverton. He said the city will run through its general fund reserves to get by until utility tax revenue starts coming in.

George Kozy, a resident and restaurant manager, said the utilities tax is an unfair way to raise money because poor people may pay just as much in taxes as the rich. “This taxes poor people, because everybody pays utilities,” Kozy said. “It puts more of a burden on poor people.”

Kozy said he spends about $150 each month on utilities. He suggested that a temporary sales tax would be a better way to raise money, but that tax could not be imposed by the city--it would have to be approved by the state.

Cheverton said the only alternative was to slash the city’s payroll. “Most likely to go would have been police and fire, because we’ve already cut the other departments down as far as we can go,” he said. Cheverton said the utility tax will keep 60 to 70 staff positions that otherwise would have been cut.

Ernie Leyva, the manager at La Habra Plating Co., which specializes in gold plating, was resigned to the utility tax. “It’s a sign of the times,” he said. “The money (for city government) does have to come from somewhere. We in turn will pass it on, and the consumer is the one that will end up picking up the tab.”

A proposed business license tax and a hotel and bed tax were voted down by council members.

Cheverton said the city would like to come up with conservation education programs, to help residents save gas, water and electricity.