March 19, 2002

Utility tax within city faces fall challenge

By DAN WHITE
Sentinel staff writer

SANTA CRUZ — Residents will vote in November whether to ditch the city’s 7 percent utility tax, which brings in $8.2 million annually.

Election officials have determined that tax foe Steve Hartman and other supporters collected more than the 1,102 signatures needed to place the measure on the November ballot. Election staffers stopped counting at 1,193.

"The City Council’s priorities are skewed," Hartman said. "The city can’t do the things that need to be done but has plenty of money for feel-good things."

The tax is levied against electricity, natural gas, cable, garbage, water and sewer charges.

News of the successful petition drive comes two weeks after county residents passed Measure L, rolling back the county’s utility tax, which raised about $10 million a year.

City leaders say they are worried about the possible revenue loss, especially in light of an estimated $1.5 million in pending general-fund cuts and the recent conversion of the Holiday Inn into a UC Santa Cruz dorm. That cost the city an estimated $500,000 a year in hotel tax, City Manager Dick Wilson said.

Hartman, a landlord and KSCO-FM talk-show host, said he is fighting for low-income Santa Cruzans. He alleges wasteful government spending and plans to use the city’s $93,000 expenditure on a downtown peace park, named for late peace activist Doug Rand, as a cornerstone of his campaign. He called the park a "special-interest" project that wastes money, and said the city already spends far too much on parks.

Peace park supporters say the $93,000 is mostly for overdue improvements to the aging Town Clock traffic island, where the park will take shape.

Utility tax money goes into the city’s $47 million general fund, which includes cash for police, fire, library, parks and some public works expenditures. More than half the money goes toward public safety, according to city officials. The total city budget is $120 million.

Assistant City Manager Martin Bernal said dramatic cuts and layoffs would be inevitable if the measure passes.

"We’d end up with a very modest parks program, maybe just maintain the parks," he said.

Bernal said city officials also would be forced to consider closing or scaling back the Harvey West Pool and summer programs, while taking a hard look at the new teen center, museum and Civic Auditorium funding.

City Councilman Tim Fitzmaurice said city leaders and people who use city services must hit the streets to let residents know what will happen if the measure passes.

"I walked two (voting) precincts campaigning against Measure L," he said. "We’ll have to do that kind of work again."

Though Measure L, the county utility tax measure, passed, most Santa Cruz voters rejected the anti-tax measure. That’s good news for the city, said Jim Heaney, who will campaign against the repeal effort.

Heaney, a county building inspector, is chair of Service Employees International Union’s political action committee. He said the repeal effort won’t succeed if people realize the connection between the utility tax and valuable services.

But Hartman said the city’s reaction to Measure L doesn’t mean much because city residents didn’t pay the county tax but benefited from the services it funded.

He predicted local residents would react differently when their own wallets are at stake.

Hartman also is trying to get the council to put another measure on the November ballot, allowing city residents to preserve some programs through voluntary taxation.

Hartman said this measure, the "Yes, Tax Me More," fund, is a reaction to people who claim a utility tax repeal would decimate the city’s budget. This voluntary form of taxation would let them pony up their own money to support the departments of their choice, he said.

He said if the council won’t put this measure on the ballot, he’ll also gather signatures to put the city’s 5 percent admissions tax to a vote by residents. That raises $1.6 million annually.

 

Contact Dan White at dwhite@santa-cruz.com.