FULLERTON : Chamber Opposes Planned Utility Tax

The Chamber of Commerce on Thursday denounced a city plan for a 3% utility-users tax that would be imposed on electricity, gas, telephone, water and cable television bills for both residents and businesses.

“The appetite of government for taxes is almost insatiable,” said Frank M. Reid, chamber vice president.

Reid and other chamber members criticized city leaders during a news conference for “overspending and wastefulness” and demanded closer scrutiny of the city budget.

The utility tax was tentatively approved by the City Council in April, but the council must hold two public hearings before a final vote.

The chamber has distributed flyers to publicize the first hearing on Tuesday. The flyers condemn the tax as “the largest tax increase in Fullerton history.”

Hundreds of protest letters and calls have flooded City Hall. The opposition has prompted the council to move the hearing to the campus theater at Fullerton College, which can seat more than 500 people.

Councilman A.B. (Buck) Catlin, who supports the tax, called the chamber’s campaign “inflammatory.”

“The council majority is trying to protect essential services,” Catlin said. “We have been cutting back for the last two years. Those things that the public has come to expect as ‘givens’ will not be given.”

Last year, the state took $2.1 million from Fullerton in property taxes and other revenues that had formerly been shared with the city. City Manager James L. Armstrong estimates that the state could take $3.9 million in 1993-94, based on the governor’s proposed budget.

The utility tax is a way to replace that lost revenue, Armstrong said. “It’s a structural change in how you finance government,” he said.

But chamber president Thomas J. O’Neill said the city must cut what he called nonessential expenditures.

“I’m a big reader. I always have a book. But, hey, libraries are optional,” O’Neill said before the news conference.

Fullerton faces an estimated $4.2-million deficit for the 1993-94 fiscal year, which begins July 1. The council and city staff held their first public hearing in January to try to close the budget gap.

Under Armstrong’s direction, city department heads came up with $4.2 million in cuts that could be made. The city said that a 3% utility tax would cost the average family about $6 a month and raise about $2.6 million in 1993-94.

In April, Catlin, Councilman Don Bankhead and Mayor Molly McClanahan announced their support for the tax and decided to cut only $2 million from city departments, protecting the Police and Fire departments. Council members Chris Norby and Julie Sa said they opposed the tax, but all five council members voted to approve the package to balance the budget.

O’Neill said he wants the council to forget the utility tax and proceed with the full $4.2 million in spending reductions. That would eliminate nine positions in the Police Department and 11 in the Fire Department. Nine of the firefighter positions would be filled with apprentice firefighters.

Tuesday’s hearing will be at Fullerton College Theater, 321 E. Chapman Ave. There will be free parking across the street in the Plummer parking structure. The meeting will begin at 7:30 p.m.