Municipal Taxes to Dominate Tuesday's Elections

By DOUGLAS P. SHUIT and KEN ELLINGWOOD

March 2, 1997 12 AM PT

TIMES STAFF WRITERS

With shock waves from two statewide tax-limitation initiatives just now reaching the suburbs, cities are scrambling to find new dollars--and hang onto money they’ve already been spending--as voters in dozens of Los Angeles County cities prepare to cast ballots Tuesday in municipal elections.

Voters are being asked to make decisions on taxes that in some cases they have been paying for several years. They also will elect new City Council members and consider issues ranging from a new casino authorization in Hawaiian Gardens to a multiplex movie theater project in Monrovia.

The driving forces behind the tax issues are two initiatives, Propositions 218 and 62, that are forcing cities to ask voters to approve hikes already on the books or extensions of utility user fees and other special taxes and assessments.

Most cities rely on money raised through such levies, so a rejection by voters would send officials scurrying to avoid sweeping reductions in budgets for police, parks upkeep and recreation programs--the sorts of ground-level services residents are most likely to see on their blocks.

Proposition 218, which passed last year, and Proposition 62, an 11-year-old measure whose implementation was delayed until recently because of court challenges, were put on the ballot by anti-tax crusaders to plug what they said were loopholes in Proposition 13, the landmark 1978 measure that slashed property taxes.

Propositions 218 and 62, which have overlapping requirements, apply tough Proposition 13 voting requirements to special assessments and levies such as taxes on utilities.

Some cities have chosen to meet the requirements head-on by seeking voter approval, but others refused, hoping the courts or state Legislature will intervene with some dramatic rescue plan.

“Cities are frantic with worry--that’s the impression I have from talking to city officials,” said Alan Heslop, a government professor at Claremont McKenna College. “They talk to one another and are convinced 218 is an Armageddon. I don’t think it is,” he said, explaining that budget cutbacks will force cities to learn to do more with less.

Joel Fox of the Howard Jarvis Taxpayers Assn., which sponsored all three tax-limitation initiatives, conceded that voters might be in a mood to support some of the taxes because they have been paying them.

“I would not be surprised to see a lot of them pass--not all of them, but a lot of them,” Fox said. “Taxpayers are used to paying them. This isn’t new money coming out of their pocket.”

Officials in cities such as Paramount, for example, are making the most of that theme in hopes of preserving millions of dollars already on their books.

“Measure A does not create any new taxes,” declares a ballot argument signed by the five members of the Paramount City Council who favor a bundle of taxes before voters. “It simply allows the city to continue receiving existing revenues. Revenues that have been put to good use and have turned this city around.”

The taxes now collected by Paramount provide $2.3 million in revenue--or just under one-fifth of the city’s general fund budget. Norwalk is one place city leaders decided not to risk a vote. A 7% levy on gas, electricity and other utilities generates $5 million a year for the city--roughly 23% of its annual budget--and officials said they just didn’t want to take a chance on losing that money, at least for now.

“It would be just a horrendous hit if we put it on the ballot and people voted against it. These days people see tax and vote no,” said Norwalk Mayor Gordon Stefenhagen, who said he hopes the state Legislature or courts will intervene. “I would hate to see what our city would look like without that money.”

In other cities, officials are viewing Tuesday as a day of reckoning--and sounding the alarms.

Leaders in Bellflower warn that the city would face 20% cuts in money for law enforcement, parks, and other programs if voters turn down two tax measures. Three of five City Council members seek approval of a business license tax of about $100 and a 5% levy on gas, electrical and telephone service.

“We collect 5% on utilities and 4% goes to policing,” said Bellflower Councilman Ken Cleveland, contending that law enforcement and other programs would be devastated if the tax issues are defeated.

But Councilwoman Ruth Gilson, who opposes the taxes, said the city should have known that it might lose this source of revenue.

“They gambled, they got caught,” Gilson said of other council members who knew that Proposition 62 had passed, was being reviewed in the courts and might be ruled constitutional, as it was in 1995. The gamble many cities took was to keep collecting the taxes.

“This is what happens when local government gets hooked on spending money they haven’t gotten approval to spend. The people showed when they voted for Proposition 13, Proposition 218 and Proposition 62 that they wanted the right to vote on taxes. Now they will.”

Lakewood also faces the possibility of drastic budget cuts if voters turn thumbs down on a 3% surcharge on utility bills. The tax has been in place since 1992 and generates $1.8 million annually that the city uses to support police, parks and street maintenance.

Lakewood Mayor Robert G. Wagner opposed the tax five years ago, but he says the city has come to depend on it. “It’s become one of our primary sources of funding,” Wagner said. “There appears to be significant support for it in the city.”

In San Dimas, voters will take up an 18-year-old landscaping assessment district that provides $850,000 a year for the upkeep of parks, median strips, equestrian and hiking trails and 21,000 city-owned trees.

San Dimas officials chose to seek the special tax by ballot because the previous assessment district would be invalid after a July 1 deadline set by Proposition 218.

“We didn’t want to be accused of trying to end-run it,” City Manager Don Pruyn said. “The requirement for the two-thirds vote is awfully onerous, but we’re hoping the public will appreciate the fact we’ve done a pretty good job with the money.”

The other locality where voters must approve the tax measures by a two-thirds margin is Pasadena.

A vigorous battle is underway in Claremont, where taxpayers will decide the fate of about $4 million--nearly a third of the city’s operating budget.

Taxpayer activists object that the Claremont measure lumps two separate levies--a 5.5% utility tax and a 7-year-old landscaping and lighting assessment--into a single ballot question. They charge that the approach is confusing and designed to shield the assessment.

“We said, let’s just clear the air. Let’s just put them both in the ballot,” said Mayor Algird Leiga, who favors the measures. “If you split them apart, you’re saying you don’t necessarily need them both.”

Foes have vowed to challenge the measure in court if it passes.

“The whole city is split on it,” said measure opponent Leslie Boring.

Faced with challenges to existing tax sources, some cities are moving in different directions in their bid to raise money.

Monrovia city leaders are asking voters to approve a proposed movie theater complex, which they hope will energize the sleepy downtown and spark a surge in tax collections.

And Hawaiian Gardens is again asking for approval of a casino that officials hope will allow continued funding for the city’s independent police department and stave off bankruptcy. The casino was approved by voters in 1995 but was challenged in court by opponents, who so far have stopped its progress.

“We need the revenues from the casino to survive,” said Hawaiian Gardens Mayor Lupe Cabrera, a retired businessman. The mayor said the city is virtually broke and has been able to meet its payroll only because a foundation controlled by wealthy investor Dr. Irving I. Moskowitz, who wants to operate the casino, has been making periodic payments of $200,000 to the city. Cabrera said Tuesday’s ballot measure was drafted to “clean up” some problems stemming from a lawsuit filed by opponents. City Atty. Julia E. Sylva said in an analysis that Tuesday’s measure would take effect only if the courts throw out all or parts of a proposal approved in 1995.

“It’s not cleaning up anything,” said Santa Monica attorney Fredric Woocher, who represents opponents of the measure. “[The casino supporters] have this pattern of doing things illegally, and then when someone sues them on it, they sort of say, ‘We didn’t do anything illegal, but if you are right, then we have this to protect us.’ We don’t think it’s going to protect them from anything.”

Also up for a vote is a 6% tax on utilities, which generates about $415,000 a year for the city.

In other tax-related questions, South Pasadena and El Monte hope to extend utility levies, while Pasadena wants to renew its library tax a year early out of concern that the levy might fall under the approval rules imposed by Proposition 218.

But taxes aren’t the only issue creating a stir in Tuesday’s election.

Passions are running high over ballot measures in Redondo Beach, where voters will consider limiting terms for school board members and weigh a proposal to trim the city manager’s authority over some City Hall staffers.

Under one of the proposals, the city manager’s authority over the city attorney, treasurer and city clerk and their deputies would be eliminated.

That measure comes amid turmoil at City Hall, where City Manager Bill Kirchhoff and Assistant City Manager Ken Simmons were placed on a three-week paid leave last month while an outside consultant evaluated their management styles. That action came in the wake of allegations by the Redondo Beach Police Officers Assn. that the city spied on the officers during a meeting. The city denied the claim.

The City Council on Friday eliminated the assistant manager’s post and transferred financial oversight power from the city manager to the city clerk.

The other measure would limit school board members to two four-year terms. The Redondo Beach Unified School District went to court in an attempt to block the measure, contending that the City Council lacked authority to put the proposal on the ballot because school board terms are governed by state law.

To the southeast, the cities of Bellflower and Lakewood are warring over an advisory measure on a new school district that may never be created.

Lakewood city leaders would like to create a new district for their city. Students who live in Lakewood now are sent to schools in four different districts: Bellflower, Long Beach, Paramount and the ABC District in Cerritos.

After hearing about the plan, for which petitions are still being gathered, Bellflower officials called for an advisory vote on the proposal, pointing out that some 1,393 Bellflower students who now go to schools in Lakewood would be forced to find new schools.

Elsewhere, Monterey Park voters will consider a ban on billboards, and West Hollywood residents weigh whether to limit City Council members to two terms. Carson residents will vote on whether to ban the sale and discharge of fireworks in the city.

City council seats are up for grabs in more than 40 cities, and in many, voters will fill elective offices like city clerk and treasurer.

The ballot in Monrovia will include the name of a popular incumbent, Mary Wilcox, who died Feb. 21. Her name could not be removed from the ballot.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Local Ballot Measures

These cities have tax measures on Tuesday’s ballot. All need simple majority vote for approval, unless noted.

Bellflower: Adopt 5% utility users tax, $100 business license tax

Carson: Allow 1% rise in hotel tax; adjust business tax yearly for inflation

Claremont: Continue 5.5% utility tax, lighting and landscaping levy

El Monte: Continue 7% utility tax

Hawaiian Gardens: Adopt 6% utility tax

Lakewood: Adopt 3% utility tax

Paramount: Ratify taxes on utilities, business licenses, vendors and waste facilities