FULLERTON : Lower Utility-Users Tax Rate Suggested

City Manager James L. Armstrong is recommending a 2% utility-users tax, instead of the 3% tax the City Council approved to balance the budget, he said Friday.

The council was set to give the final approval on Tuesday to a 3% tax on water, electricity, telephone, gas and cable television bills.

The 3% tax was tentatively approved 3 to 1 by the council at a June 15 meeting.

Armstrong said he is seeking the lower tax rate because the state will not take as much money from the city during the 1993-94 fiscal year as previously thought.

“We’re pleased that the state situation came out better than we thought,” Armstrong said. “We don’t need that level of taxation, so let’s reduce it.”

The tax is estimated to raise about $800,000 for each percentage point for the 1993-94 fiscal year.

Armstrong said the city was expecting to lose $1.8 million in property tax shifts to state coffers, but now expects to lose $606,000.

Chamber of Commerce President Thomas J. O’Neill, who led strong opposition to the utility-users tax, said he remains unhappy.

“We are still against any form of new taxes without approval by the people. We don’t want any utility tax,” O’Neill said.

Councilman Chris Norby, who has voted against the tax, agreed and said he will not support a 2% tax. He said deeper cuts can be made in city spending.

“Very few people, because the budget is so complicated, have looked at it to see exactly what cuts could be made,” Norby said.

He plans to outline some of his alternatives to the tax at the council’s next meeting.

The council will hold the final public hearing on the utility-users tax at the Fullerton College Campus Theater, at 7:30 p.m.

The theater was also used for the June meeting, when more than 700 people attended the first reading of the ordinance. Most were opposed to the tax.

Armstrong said the decision to recommend reducing the tax was not made because of the opposition.

“Obviously, the tax has been controversial,” he said. “We just felt that if we could get by with 2% instead of 3%, that was the responsible thing to do.”

“I think that’s great,” said Councilman Don Bankhead of the reduced tax. He voted in June to approve the tax, as did Councilman A.B. (Buck) Catlin and Mayor Molly McClanahan.

Catlin said he was pleased with the proposed reduction. “I think that’s the council voting responsibly,” he said.

In a technical point, Armstrong is recommending that the council still approve a 3% tax, but through a resolution, reduce it to 2% until the end of September, 1994.

“We don’t know what’s going to happen in 1994-95,” Catlin noted.

McClanahan said the city will continue to look at money-saving procedures.