ANAHEIM : Officials to Debate Utility Tax Extension

Officials will discuss extending the city’s controversial utility tax at a public hearing Tuesday.

Some city officials say it is necessary to extend the 2% tax on gas, water, electricity and telephone bills for at least a year beyond its scheduled Sept. 30 expiration because of budget shortfalls.

Mayor Tom Daly opposes an extension, saying the city should cut its budget instead. A council majority wants to continue the tax.

The public hearing will begin at 5 p.m. at City Hall, 200 S. Anaheim Blvd.

The tax generates about $6 million a year for the city. Officials say it costs the average resident $3 a month. It was adopted when city tax revenue fell two years ago.

In 1988-89, city general fund expenses were $104 million. The figure reached $145 million in 1990-91, when the city spent $15 million to buy land for the Anaheim Arena.

The city is spending $137 million during the current fiscal year, which ends June 30.

The city’s proposed budget, which the council is scheduled to adopt later this month, calls for $135 million in spending during the 1993-94 fiscal year.

When the council adopted the utility tax, about 1,000 people attended a boisterous public hearing at the Celebrity Theater.

The majority--primarily city workers, senior citizens, advocates for the disabled and the arts--supported the tax, saying the levy was necessary if various city programs were to survive.

Those opposed, primarily members of the business community, said the tax would hurt the city’s economy and burden small businesses.

Allen Hughes, executive director of the Anaheim Chamber of Commerce, said his group still opposes the tax but will accept an extension through June 30, 1994, the end of the city’s 1993-94 fiscal year.

“We did a lot of soul searching on this, but we looked at the city’s budget and concurred that it is necessary to continue the tax for a short time,” Hughes said. “But it is just a stopgap measure. It doesn’t solve the real problem, which is the city is spending too much money. Our concern is that Anaheim needs to attract new businesses and retain the ones it has, and every tax and regulation makes that task more difficult.”

A final vote on the extension is scheduled for June 15.