Despite promises of wage concessions from the city's largest employee union, City Council members failed Friday to enact a utility tax because they could not agree on how large a tax to levy.
This left the city with at least a $6-million deficit in its $544-million budget, so the layoffs of 51 of the city's 2,200 full-time employees will proceed. Another 150 could lose their jobs if the budget crisis is not resolved.
The council members adjourned the meeting after two hours when it became clear that none of three proposed utility tax rates--2%, 2.75% and 3%--could garner the four votes necessary for passage. The measures included provisions to abolish the tax in two years and to cap the cost to businesses at $50,000 a year per each gas, water and electric meter.
Before the meeting, the Anaheim Municipal Employees Assn. said it would defer for six months the 4.25% raise its members are due Oct. 1 if the council would impose a tax of 2.75%. The deferment would save the city almost $600,000. The city's administrators have already agreed to defer for six months their 5% raise regardless of the fate of the utility tax, saving the city more than $400,000.
Mayor Fred Hunter and Councilman Bob D. Simpson said they would not agree to a tax of less than 2.5%, saying to do so would gut city services. Councilman Irv Pickler said he preferred a 2% tax but indicated he might have been willing to join Hunter and Simpson at 2.5% Friday if a fourth member had come along.
"I think the (employee union) can get its members agree to a deferment with a 2.5% utility tax just as easy as a 2.75%," Pickler said. "If they don't, then we could go back and rescind" the tax completely.
Because Friday's meeting was a special session, state law required that four of the five members vote for a measure for it to be approved. The council will reconsider the tax at its regular meeting Tuesday, where only three votes will be necessary for enactment.
But Councilman William D. Ehrle said he would not go above 2% and Councilman Tom Daly continued to argue that no tax is necessary and that the council should balance the city's budget by privatizing some services and eliminating others.
Hunter said he was not disappointed that no compromise was reached Friday.
"Hopefully we will work out a compromise and on Tuesday we will have three votes for a 2.5% tax," he said.
Sharon Ericson, the municipal employees association president, blasted Ehrle, Pickler and Daly for refusing to pass a 2.75% tax Friday and said she is unsure if her members would be willing to defer their raise if a 2.5% tax is passed. But, she said, the union will not defer the raise if a tax lower than 2.5% is enacted.
"We agreed to the deferment because we were led to believe there was a consensus on the council for 2.75%," she said. "But those three have to be the most irresponsible I have ever met in my life. They want to bleed the city's employees is what they want to do."
Hunter, Simpson and Ehrle had voted to enact a 4% tax last month, but Ehrle changed his mind and voted Tuesday with Daly and Pickler to rescind the tax. That vote occurred before a crowd more than 1,000 people, many of them city employees, that hooted and jeered the decision.
The council then voted to begin the layoff process for 51 employees, including a deputy city attorney, and eliminate such programs as the summer plays in Pearson Park, an Olympic-style athletic competition for employees of Anaheim businesses and some recreation programs. Those cuts reduced the city's deficit from $14 million to $6 million.