HUNTINGTON BEACH : Council Drops Proposals to Increase Oil Tax, Impose Rentals Fee

The City Council this week scrapped a proposal to increase the oil barrel tax and to impose a business license fee on single-family home and duplex rentals.

As a result, the shortfall for this fiscal year’s $96.1-million general fund budget climbed to about $912,000.

The two proposals were expected to raise a total of $129,000 to help ease a $783,000 budget shortfall.

Council members Grace Winchell and Ralph Bauer voted in favor of the proposals, which drew overwhelming opposition.

Real estate agents, residents and property owners overwhelmingly objected to the business license fee. Opponents called it an unfair tax that would have placed a financial burden on landlords since many of them own rental property as a retirement investment, not as a for-profit business. The council also received a number of letters objecting to the proposal.

The fee would have raised about $150,000, but start-up costs to process the licenses were estimated to be $66,000 the first year, officials said.

Resident Robert Ballard, who owns rental property, told the council: “If the tax goes through, we can’t pass on the cost.”

Members of the Downtown Residents’ Assn. supported the business license. Residents said the fee would give the city assurance that property owners pay their fair share for public safety services.

Opponents of the proposed 2-cent increase for the tax on each oil barrel charged that if the hike was approved, the city would have the highest tax in the area. The tax would have generated $45,000 in revenue.