Fullerton’s Divisive Utility Tax Is Repealed

After much debate and delay, City Council members Tuesday night repealed the controversial utility tax that caused the ouster of the three council members who voted to levy it.

“It’s time,” Mayor Julie Sa said. “We have to repeal the tax tonight. It’s time to get rid of the tax, forget about it and start concentrating on 1995.”

Sa publicly apologized for the county’s financial crisis and then urged residents to help the city overcome any difficulties by volunteering their services.

“I’m asking for cooperation, input and help from the whole community,” she said. “We need to start thinking about how we will attract businesses to Fullerton and revitalize business already here.”

The council voted 3 to 2 to repeal the 2% utility tax effective Feb. 28. Council members Jan M. Flory and Don Bankhead cast the dissenting votes, saying the city should wait and see if the county investment crisis will be resolved and if the state balances its budget by taking funds from the cities.

“I think to eliminate the tax at this time is absolutely foolish and ridiculous,” Bankhead said. “I don’t think this 2% utility tax has anything to do with driving business out of Fullerton.”

The council two weeks ago postponed the decision to repeal the tax because it had no idea whether the city’s $18 million, which is tied up in the county’s troubled investment fund, was safe. Council members said then that if the city loses the $18 million, they would have to consider such measures as keeping the utility tax.

But last week, Councilman Peter Godfrey said keeping the tax would be “like (sprinkling water) on a forest fire and wouldn’t help much.”

City Manager James L. Armstrong said now that the tax will be withdrawn, cuts totaling about $2 million will have to be made in services throughout the city. The cuts will not be severe, however, because the city has already begun the “downsizing process,” he said.

Killing the tax seven months earlier than its scheduled expiration date of Sept. 30, “only accelerates the (budget-cutting) process,” Armstrong said. “Eventually, the tax was going to go away anyway. We’re going to have to get used to it earlier.”

Residents cheered when the council voted to repeal the tax.

“I’m delighted,” former Chamber of Commerce President Thomas J. O’Neill said. “Fullerton can get by with or without the utility tax, regardless of this county financial fiasco.”

The tax on all utilities, which was levied in October, 1993, triggered the successful recall of former Mayor A. B. (Buck) Catlin and council members Molly McClanahan and Bankhead, who won back a seat on the council in the November election, six weeks after being ousted.