HUNTINGTON BEACH : Council Blocks Vote on Tax for Benefits

City Councilman David Sullivan has failed to garner support for a November ballot measure to let voters decide whether to eliminate a tax that goes toward city employee retirement benefits.

More than 100 city employees at Tuesday’s City Council meeting whooped and hollered when the council rejected the proposal. Sullivan introduced a motion for his ballot measure, but none of his colleagues supported it, so there was no vote.

Other council members expressed concerns that if the municipal tax--which costs each Huntington Beach homeowner about $84 a year--was repealed it would have a devastating effect on the city’s finances.

City officials estimated a possible loss of $6.25 million, which would mean substantial cutbacks in services and city personnel.

“To me, the bottom line is this is a great city and we must provide a certain number of services,” said Councilwoman Grace Winchell, who lauded city workers as “good, responsible employees.”

“To cut $6 million would be totally irresponsible,” she said.

Councilman Jim Silva charged that if the tax were repealed, it would equate to a tax shift since other taxes would need to be raised to cover the lost revenue.

“It would be a tax increase in the city,” Silva said. “I can’t support it. It would end up costing taxpayers more money in the long run.”

The city has been collecting the tax, which appears on property tax bills as “Huntington Beach city debt,” since 1966.

Huntington Beach is the only city in Orange County in which a property tax levy is used to pay for employee retirement costs.

Sullivan said he raised the issue because he believes a vast majority of citizens don’t know that they are paying the tax.

Sullivan said he was proposing “an up or down vote on this tax.”

“I think if we put it on the ballot, an overwhelming number of citizens in the community would stop that tax,” he said.

The tax helps pay for the city’s $9.7-million yearly cost of employee retirement benefits. The city picks up the employee cost for these. The benefit was negotiated years ago with employee groups in lieu of salary increases and has continued over the years.

If the tax money were lost, City Administrator Michael T. Uberuaga said, at least 75 jobs would have to be cut and drastic reductions would be made in the police and fire departments.

Sullivan said Tuesday that “the battle was lost tonight, but I’m not so sure that the war has been lost.”

Sullivan added that citizens who favor eliminating the tax could organize to get the issue placed on a future ballot.

In a separate action, the council voted to ask the county assessor to reword property tax bills to clearly state that they include a tax for employee retirement costs. Sullivan cast the only vote against the action.