City Council OKs Taxes on Water, Parking

SANTA MONICA — Despite protests that it was putting the cart before the horse, the Santa Monica City Council on Tuesday imposed two new taxes and raised a third as part of a move to close an expected $11.2-million revenue gap for the coming fiscal year.

The council approved the taxes before seeing the new budget and before a series of public hearings that have been the traditional forum for residents to air their views on taxing and spending by the city.

The new taxes, which will take effect July 1, are a 10% levy on water and a 10% parking surcharge for pay lots. Taxes on other utilities were raised to 10%, up from 9.5%. Altogether, the new taxes are expected to bring in $3.8 million annually.

City Manager John Jalili said early action was needed so the city’s rent board could let renters know that the city’s new 10% water tax would be passed on to them. Furthermore, Jalili said he needed guidance on preparing the budget.

“We would like the council to make some decisions on additional cuts and revenue,” Jalili said.

But former Councilwoman Christine Reed and others said the vote was a mockery of the public process. “This is not right,” Reed said. “Your budget isn’t even published.”

City officials said it is not the first time that taxes have been raised before the end of the budget process.

Council members Robert T. Holbrook and Asha Greenberg voted against the tax hikes, saying they were premature. They were joined on the parking tax vote by Councilman Paul Rosenstein, who said the vote could wait until after public hearings in June. The council will vote on the taxes again at a second reading next month.

With the exception of Rosenstein’s one “no” vote, members of the liberal renters’-rights majority on the council voted unanimously for the new taxes. Three members of the Santa Monicans for Renters Rights steering committee testified in favor of the new taxes as the only way out of the budget dilemma.

The 10% water tax, which would cost the average taxpayer $36 a year, is in effect a double tax, placing a surcharge on clean water coming into the house and waste water flushed into the sewer system.

“They’re getting us coming and going,” said longtime resident and businessman Bob Gabriel.

In addition, the water tax is being attacked as regressive, hitting poor people who must use water but cannot afford the surcharge.

“To even consider a flat regressive tax on water is beyond my comprehension,” said resident Merritt Coleman.

Business owners also complained about the taxes and the council’s approach to solving its financial woes, which have been blamed on the recession and the state’s cutbacks to cities.

“These are not the times to be asking people to give more,” said restaurant owner Russell Barnard. “These are times to ask what we can reduce and how we can live with what we have.”

City officials say they have already made deep budget cuts in the last few years, absorbing more than a $9-million shortfall in the process. About 142 city staff positions have been cut in three budget years.

About $4.5 million of the expected $11.2-million shortfall for the 1993-94 fiscal year will be addressed through spending cuts. The balance of the shortfall, about $6.8 million, will be recouped through the new taxes, increased parking fines and other, as yet unspecified, increases in user fees.

One hurdle in curtailing spending is the council majority’s philosophical devotion to funding social services far beyond the norm for cities.

Councilman Ken Genser defended that priority at the meeting.

“I think the social service networks we have are part of our infrastructure,” he said.

Mayor Judy Abdo said she reluctantly went against a lifelong aversion to regressive taxation to vote for the water tax.

“I believe the residents of the city want to keep (our) quality of life,” she said. “Residents of this city are willing to contribute a little more.”

But Holbrook and Greenberg protested voting to raise taxes in a vacuum--and in a recession. “It comes down to what we can afford and what you can afford to pay,” Holbrook said.