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DOWNEY – With budget deficits and spending cuts quickly becoming the new normal, city officials are beginning to explore a controversial alternative for raising revenue this year – tax increases.
Hoping to allocate more funds for police and fire services, city staff proposed the city council ask residents to approve an increase to the city’s utility users’ tax for electricity, gas and telephone.
In a unanimous decision on Jan. 22, the council initiated the process, agreeing to pay a consulting firm more than $156,000 to help inform and engage voters regarding the tax increase using mailers, polling, media outreach, and voter information.
Devastated by high employment and an increasingly recalcitrant economy, cities have seen sizable cuts to community grants over the last five years. Likewise, all redevelopment agencies have been eliminated by the state.
In the city staff report, City Manager Gilbert Livas suggests a tax increase could help ensure public safety services continued indefinitely.
“The additional revenues would be used to pay for future Police and Fire services,” he said.
During the 2012-13 fiscal year, the city closed an $11.5 million budget gap with a combination of layoffs, salary reductions, and spending cuts. Several city positions have also been eliminated or remain unfilled.
Mayor Pro Tem Fernando Vasquez maintains the council is just exploring the tax increase as a possible option.
“I’m not afraid of information. This process is merely to obtain information,” he said. “At the end of the day, it’s up to the residents, the voters to decide what the next step should be for public safety.”
According to a staff report, Lee Edwards Group has represented over 150 cities and public agencies throughout California. The firm’s expertise is in revenue ballot measures, having recently assisted the city of Bellflower with a similar utility tax measure in November 2012.
Lew Edwards Group proposes a five-step approach beginning with a feasibility study, which is currently underway. The process also includes community outreach, local polling, ballot placement, and implementation, if the measure passes.
Per the agreement, the city council can terminate the contract at any point during the process.
“Based on the information, I cannot support a tax increase on the residents at this time,” Vasquez said. “I support having the voters decide, but what we approved is to obtain information, not to increase the tax.”
Published: February 21, 2013 – Volume 11 – Issue 45