Auditor Protests Fullerton 3% Utility Tax

A 3% utility tax the city of Fullerton passed in July should be declared illegal, according to a complaint filed in Superior Court on Friday by the Orange County auditor-controller’s office.

Orange County Auditor-Controller Steven E. Lewis filed the complaint, which seeks a legal ruling on the conflict between the city and the county.

The tax became effective Friday and is expected to cost the average household about $4.40 a month, according to city officials.

“Our attorneys have informed us that this is proper,” said Fullerton City Councilman Don Bankhead, who said he was not aware of a complaint being filed. “If it’s in the courts, it will have to be decided by the courts.”

Lewis alleges in the complaint that the tax violates Proposition 62, passed in 1986, which requires two-thirds of a governing body to approve new tax proposals.

According to the complaint, the city did not meet that requirement on July 20, 1993, when only three City Council members voted to enact a utility user tax that places a fee on residents based on their use of water, gas, electricity, telephone and cable television services.

City officials have estimated that the financially strapped city will raise about $1.6 million from the utility tax in the current fiscal year. If the tax is found to be unlawful, the city could lose that same amount in property tax revenue, according to the complaint.

A city resident also has filed a lawsuit against the tax.