Residents Rally Against Utility Tax

By Teresa Rochester

As utility rates continue to rise, so does the amount Santa Monica residents are taxed to use them, a basic fact that has left a group of residents looking for ways to curb or halt the City's Utility User Tax.

On Wednesday night 25 residents gathered at Ken Edwards Center to discuss their options and to gather information on the 32-year-old tax, which is expected to generate an estimated $24.5 million in the 2001/2002 fiscal year.

"Rather than giving a break to residents in the community, we're having to pay higher and higher taxes," said Donna Block, a City Council candidate in the November race who helped organize the meeting. "And their [the City Council's] choice is how to spend the money."

Residents are charged 10 percent of the cost they incur using the telephone, gas, water, wastewater, electricity and cable television. The tax generates between 15 and 18 percent of the City's general fund budget.

Over the years the tax has been increased from 5 percent to its current 10 percent to bolster funds in order to either maintain or increase services such as police and childcare. In 1993 the tax was increased to replace Property Tax revenues taken from the City by the state during the recession in the early 1990s.

City finance director Mike Dennis said that to cut back or eliminate the tax would result in a decline in municipal services, including those for parks, libraries and public safety, services which residents have come to expect.

"It's an essential part of the City's budget," he said. "If it's not there, the City doesn't have the $24.5 million to fund those services…That's a pretty draconian thing. Certainly a service change has long-range implications."

Dennis added that the City does offer exemptions for low-income senior citizens and disabled people. The City also offers strong conservation programs.

"It's important to the City," Dennis said. "On the surface that seems to be contrary to the City's fiscal interest. On the other hand, the City has a history of social commitment and a history of helping."

At Wednesday's meeting - which drew four City Council members, including Mayor Michael Feinstein -- residents called for everything from capping or repealing the tax outright to not charging for essential utilities such as gas, water and electricity.

Peter Tigler, a Pico Neighborhood Association board member, supports the idea of a cap.

"In the short term I would like to see the tax capped," said Tigler, who helped start the debate through a number of emails last December. "If we conserve more and the rates go up, we still pay more."

Tigler said the next step would be to step up the discussion on the tax and develop ways to move forward with recommendations.

Block and Tigler said the City Council members seemed receptive to their concerns, but both agree that they need to bring more voices into the debate. They plan to hold another meeting in the future.