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Vernon voters approve $8 million in tax hikes

April 10, 2013|By Christine Mai-Duc
  • The three measures passed by more than 80%, and are projected to raise $8 million annually for the city.
The three measures passed by more than 80%, and are projected to raise $8… (Francine Orr / Los Angeles…)

Voters in Vernon overwhelmingly approved three tax measures Tuesday, clearing the path for city leaders to close an estimated $8-million general fund deficit.

Officials had threatened deep cuts to the city’s police and fire departments if the measures did not pass.

“More than anything, this vote is an acknowledgment in the city of Vernon that public safety is important,” said Vernon spokesman Fred MacFarlane, adding that residents have made it clear they don’t want to contract out police and fire services.

The three measures passed by more than 80%, and are projected to raise $8 million annually for the city. About a dozen people looked on in a small City Hall conference room while the 42 ballots were counted. Officials gave each other pats on the back and congratulatory handshakes after the results were announced; the whole process took just 30 minutes.

Measure K, which increases the city’s business license tax, is expected to inject $4.5 million annually to the city’s coffers, and hit area businesses hardest.

Measure L, a special parcel tax on non-residential lots, will bring in $1.9 million a year for 10 years. Measure M, a 1% utility users tax, will raise an estimated $1.6 million before it sunsets in 2023.

The tiny industrial hamlet that’s home to 1,800 businesses and 112 residents, has run deficits for more than 20 years, according to auditors. In recent years, a series of bad investments, made worse by the troubled economy, have widened Vernon’s budget gap. An expensive fight to save the scandal-plagued city from disincorporation in 2011 didn’t help.

Since then, city leaders have raised electric rates by about 40%, instituted an early retirement program, reduced worker benefits, and sold 500 acre-feet of water rights to cut costs and boost revenue. 

Last September, voters rejected a proposed utility users tax, which would have charged the heaviest users as much as 9.8%.

Mayor William Davis said he and others have campaigned hard to regain the trust of community members and gain approval for the tax measures. “I called them on the phone, I walked door to door,” Davis said. “We were trying to explain to them why this is important for the city.”

Davis said reform efforts are ongoing. Vernon's City Council is scheduled to take up the issue of equalizing council members' salaries -- the source of repeated critiques from auditors -- at the next council meeting.

City administrator Mark Whitworth called Tuesday’s results a “vote of confidence” in Vernon’s leadership and said it will allow them to focus on other pressing changes, like bringing in a private housing development aimed at doubling the city’s electorate.

Vernon, which owns virtually all of the residential property in the city and for years leased them at rock-bottom rents, has been accused of using housing to wield influence on its tenants.

Tuesday’s vote also puts to rest an ongoing battle between the city government and local businesses on how to address the budget deficits. Past efforts to draft parcel and utility user taxes drew heavy opposition from the business community.

“This overall tax plan is a much more thoughtful approach than the previous two proposals that would have really hurt the manufacturing community,” said Marisa Olguin, president of Chamber of Commerce. Olguin said the measures approved Tuesday were the result of extensive negotiations between business, residents, and city leaders.

“It’s been exhausting for both parties, but I think now moving forward we have a shared goal – to develop a long term plan for the city to succeed.”

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