SEAL BEACH : Utility-Users Tax More Than Doubled

The City Council voted this week to more than double the tax that residents and businesses pay on their monthly gas, electric and telephone bills, making Seal Beach’s utility-users tax the highest in the county.

Monday’s action--which increases the tax from 5% to 11%--is designed to help close a budget shortfall of at least $1.7 million.

Council members said the decision was a painful but necessary one, noting that the only other option was to make massive cuts in city services.

“No one ever wants to raise taxes,” Councilwoman Marilyn Bruce Hastings said. “But I don’t know where else we can get the money from. I don’t know what else we can do.”

A handful of residents and business people spoke against the tax increase at Monday’s meeting.

Dallas Pierce, a representative from Rockwell International, said the tax hike could cost the aerospace company as much as $300,000.

“That’s a little stiff for one company,” he said. “Times are tough everywhere. . . . It puts an additional burden on us at a time of (defense) downsizing.”

An official from the Seal Beach Business Assn. said the tax increase will hurt local merchants already hit hard by the recession.

Several residents suggested that the city consider further reductions in some services.

“Maybe our standards (for services) are very high. Maybe we can go from doing an excellent job to doing a good job,” one resident said.

The comments did not sway council members, who said the city has cut both spending and personnel by about 20% in the past two years. At the same time, city spending has declined from $13 million two years ago to an expected $10.8 million in the 1992-93 fiscal year.

“I think our choices are limited,” Councilman George Brown said.

The council agreed to review the tax each year in an effort to determine whether the extra money is needed.

Before Monday’s meeting, little organized opposition had surfaced to the tax plan. Last month, the Seal Beach Homeowners Assn. voted to endorse it.

“We have a wonderful city and it is somewhat in jeopardy” by the funding shortage, said community activist Gordon Shanks at Monday’s meeting. “The alternatives (to a tax increase) are not very viable.”

Dozens of cities across Southern California have utility-users taxes. Few are as high as Seal Beach’s. Neighboring Long Beach charges a 10% tax, while Los Alamitos charges 6% and Westminster charges 5%.

The tax increase will still require that the city cut at least $300,000 from its budget. An additional $500,000 in cuts might have to be made if the U.S. Supreme Court rules in a case that involves municipal sales tax rebates.

Most of Seal Beach’s budget shortfall is blamed on reductions in state funding.