PLACENTIA : City Council Votes to Raise Utility Tax

After three hours of acrimonious testimony, the City Council voted 4 to 1 Tuesday to raise the utility tax rate from 3% to 4%.

The tax hike was needed to offset a $761,000 deficit in the current fiscal year, City Administrator Robert D’Amato said.

“The proposed 1% increase only allows us to maintain the current level of spending,” D’Amato said. “It does not put back the 10 full-time employees, including three police officers, that we have already lost.”

But many residents questioned D’Amato’s claim that if the utility tax--levied on telephone, electricity, natural gas and cable television use--was not increased, city services would have to be cut even more.

Resident Dale Goodman said the city could delay several scheduled purchases and improvements.

“I can’t believe you wouldn’t cut things before you cut employees,” Goodman said. “I just don’t think any police would come out of the budget before things did.”

Other residents said the increase would not have a significant impact on their finances, but could help the city out of a tough spot.

“As a homeowner and business owner, I’m getting hit twice,” said Mike Swearingen, a resident. “But some of us feel (the tax increase) is the only way to continue to provide excellent services.”

Some residents claim the increase will keep their property values up by ensuring that city services are kept intact.

“People are often penny-wise and pound-foolish,” John McClanahan said. “If you moved my house to Santa Ana, the value would drop by $150,000. (The difference) is the services this city has. I don’t need my property values to be decreased because we let the city run into the ground.”

Councilman John O. Tynes, who voted against the tax when it was enacted in 1970, said Tuesday that he was wrong then and he supported the increase now.

“I don’t know what we would do without that tax now,” Tynes said. “Whatever my feelings were then, Proposition 13 changed the rules.”

Mayor Maria Moreno cast the sole no vote on the increase, saying the issue warranted a referendum in November.

The tax increase will go into effect in September and is expected to raise about $433,000.