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Former Councilman Wants Utility Tax Halted

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SPECIAL TO THE TIMES

A former city councilman is hoping that the nation’s upbeat economy could lead to a temporary tax break for residents. But the La Palma City Council isn’t so sure.

City residents have been paying a 5% tax on electricity, gas, cable television and water use since the tax was passed in 1993, when the city was suffering a recession.

Now, partly because of a growing population base and the rosy economy, that tax is responsible for 15% of the city’s general fund.

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Former La Palma City Councilman Keith Nelson said it’s time for city residents to share in the prosperity too.

He has asked the city to consider temporarily halting the tax.

“I believe we do need the utility users tax,” Nelson said during a City Council meeting earlier this week. “But what is a reasonable amount of money to have in the fund? . . . Is it being put to use?”

The City Council reacted cautiously to the request, even as council members asked the city attorney to research the issue. One questioned whether it would be legal to reinstate the tax after it was temporarily halted.

Others said they would like to see the tax reduced someday but said the city could not do without the cash flow.

“It should be reduced at some time,” Councilman Brian O’Neal said. “But not now . . . we have too many things on our plate.”

Councilwomen Lauree Aragona said the city needs the tax because it cannot become reliant on uncertain state funding.

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“We need to be able to take care of ourselves, and that is what this tax does for us,” she said.

City Manager Daniel E. Keen also voiced support for the tax. He noted that the city receives 80% of its general fund revenue from sales taxes imposed on 10 local businesses. That makes the city financially vulnerable if any one of these businesses leaves La Palma, he said.

City Atty. Joel Kuperberg will report his findings at the Feb. 15 council meeting.

Andre Briscoe can be reached at (714) 966-5848.

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