Calabasas : Cities in a Quandary Over Tax Decision

Since the state Supreme Court upheld a 1986 ballot measure that requires voter approval of general and special taxes, Calabasas and other area cities have been trying to assess how the ruling will affect their fiscal situations.

But that hasn’t been an easy task, city officials say, because the ruling, made Sept. 28, raises more questions than it answers. They say it is not clear, for example, whether government entities will have to refund all general and special taxes implemented without voter approval since 1986.

That, they say, would create dire fiscal problems for many cities, including Calabasas, which raises about $1.7 million annually with a 5% utility tax that the city has charged since it was incorporated in 1991.

“There is no question that would have an impact on the way we do business,” Calabasas City Manager Charles Cate said.

The California League of Cities, which will hold its annual conference this weekend in San Francisco, may be able to provide some guidance to local governments about what to do next, said Calabasas City Atty. Casey Vose.

Legally, Vose said, government entities can ask the court to rehear the matter, which could help clarify the retroactivity question.

Jonathan M. Coupal, director of legal affairs for the Howard Jarvis Taxpayers Assn., said cities could resolve the matter by putting any new taxes implemented since 1986 on a ballot for March, 1996.

Meanwhile, neighboring Agoura Hills is hoping for the best and preparing for the worst. Officials have drawn up a list of $1.2 million in cuts--the amount of revenue brought in to date from a 4% utility tax implemented about a year ago--in case the ruling is deemed retroactive. Among other cuts, City Manager Dave Adams said, Agoura Hills would have to scrap plans to repave roads and upgrade sidewalks around town.