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What I Say
About Frank Gruber Send email to: FrankGruber@surfsantamonica.com

What I Say: Correction

Dear Readers:

Today's column contains a significant error.

In the column I said that the City "enacted" the 10 percent utility users tax in response to the budget crisis ten years ago and that the tax now pulls in $28 million, but I confused enacting the tax with extending it, and thus also wrongly reported the financial impact.

The City in fact enacted the utility users tax in 1969. What the City did in 1993 was extend it to water and waste water bills, as well as increase the rate from 9.5 to 10 percent. The value of these changes in the 2003-04 budget is about $3.5 million.

The City did, however, enact the Parking Facilities Tax in 1993, which is a 10 percent charge on parking. This tax is expected to bring in nearly $6 million in 2003-04.

Thus, instead of $28 million, the 1993 tax increases represent about $10 million. Also, to be fair I should mention that in 1993 the state reduced the city and county share of property tax and other revenues to balance its own budget, and to some extent the City's tax increases merely replaced these reductions.

I apologize for these errors. However, on reviewing the column as a whole, I'll stick with the main point, which is that during the boom years instead of finding something prudent to do with the proceeds of the tax increases, the City made decisions to increase spending, decisions that the City now finds difficult to reverse.
The views expressed in this column are those of Frank Gruber
and do not necessarily reflect the opinions of The Lookout.
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