Saratoga News

Saratogans pay one less tax, giving the city less revenue

By Sarah Lombardo

The next Pacific Gas and Electric bill Saratoga residents receive will not include the city's utility users' tax.

The Saratoga City Council officially repealed the tax last week. The council also scheduled two meetings in January to discuss changes in the budget in light of the anticipated revenue shortfall accompanying the tax's defeat.

Councilmembers agreed to meet on Mon., Jan 6, at 7 p.m. and tentatively on Mon., Jan. 13, at 7 p.m. to discuss ideas for adjusting the budget and to talk about the city's priorities before choosing where cuts might be made. It has not yet been decided where the meetings will be held, but new Mayor Gillian Moran assured they will be open to the public.

"I was thinking of having a brainstorming session where we don't really talk too much about numbers, but rather we talk about concepts," Moran said.

Moran suggested that the councilmembers discuss the city's mission statement and decide what services as a city they should provide. Moran said that the meetings will provide the council with a guide when they do tackle the budget.

First enacted in 1985 by a council vote, the 3.5 percent tax on PG & E bills was supposed to expire after five years. But the tax was continued by council votes in 1990 and again in 1995. The tax came under fire late last year, when the Pacific Legal Foundation told the city the tax was illegal and threatened to sue the city if collection of the tax was not stopped and the tax put to a public vote.

PLF attorney Deborah La Fetra argued that the tax was illegal under Proposition 62, which was passed in 1986 and requires a majority vote for general taxes and a two-thirds vote for special taxes. City officials maintained that, because the tax was originally enacted before Prop. 62, it was not illegal but agreed to put the tax on the ballot.

The utility users' tax lost by 77 votes in November's general election.

According to City Manager Harry Peacock, the city sent a letter to PG & E after the election to inform them that they should stop collecting the tax. He said the company confirmed that collection of the tax would be stopped beginning Dec. 1.