PLACENTIA : Hearing to Consider Utility Tax Increase

The first public hearing on a proposal to increase the city’s utility tax will be held at 7:30 p.m. Tuesday at City Hall.

City officials have requested the increase to help balance the $22.6-million budget adopted last month by the council.

The increase from 3% to 5% would raise about $866,000. The tax is levied on natural gas, electricity, telephone and cable television use.

The average household currently pays between $3.50 and $5 per month per utility. The increase would raise that to between $5 and $9 per month per utility.

City Administrator Robert D’Amato said if the tax is not approved by the council, the city would have to eliminate 15 full-time employees from all city departments, including the Police Department.

The cuts, D’Amato said, would severely affect the level of basic services the city could provide.

“There are not enough bodies around that we could make cuts of that many without impairing the ability to do what’s necessary to provide a minimum of security, traffic and road safety,” he said.

D’Amato blamed the state for the financial woes, forcing the need for the utility tax increase.

“The state is taking approximately $715,000 from the general fund,” D’Amato said. “Combined with additional charges the state is allowing the county to pass on to us, we’re looking at $1.8 million out of our general fund this year.”

Councilman John O. Tynes, who was on the council when the utility tax was initiated in 1971, said that most residents favor raising the tax over cutting services.

“I’ve been receiving calls from people who don’t like the idea of a higher tax, but they want services kept up,” Tynes said. “Most have been supportive of the increase.”

Tynes voted against the tax when it was first proposed but will probably support the increase when the council votes after a second public hearing Aug. 3.

“I want to keep services intact,” he said. “I hope we don’t have to let any employees go, and the only way would be to get money from somewhere.”

But resident James Stoddart objected to the proposed increase, saying it would backfire on the city.

Raising taxes “doesn’t work,” Stoddart told the council at a June meeting. “If you reduce taxes, people turn loose their money, spend it and create jobs,” he said.

Stoddart said the city should balance the budget without a utility tax increase, regardless of the impact that such cuts would have on essential city services.

“If I have a heart attack on my front lawn and nobody comes, so be it,” he said.

A frequent critic of the utility tax has been Lucy Grismer. Grismer contends that the utility tax was passed in 1971 to help pay for a new City Hall, with more than enough collected in the ensuing years.

“This tax should be repealed,” she said.

But D’Amato said the tax was levied to pay for City Hall and to finance capital improvements and the purchase of equipment, such as police cars and computers.

“What I read in the minutes (of the meeting when the tax was approved) was that this was not just for City Hall but for capital improvements as well,” D’Amato said.

The utility tax has been raised and lowered several times since it was first instituted, but it has never been abolished.

In 1985, an advisory vote indicated strong support for abolishing the tax, with 2,777 residents voting against it and 976 voting for retention.

But the council overrode public opinion and retained the tax.