NEWARK — Depending on whom you ask, the proposed utility users tax on Tuesday's ballot is either crucial to the city's ability to maintain current services given the economic climate, or simply a way for officials to pass on to residents its fiscal problems.

The city, trying to find a way to help bridge a projected $3.5 million gap in its budget, has placed on the ballot Measure L, a proposed utility users tax that would tack a 3.9 percent charge onto almost all utility bills.

If passed, the tax would cost citizens of average utility usage about $12 a month and generate roughly $2.5 million a year for the duration of the six-year tax.

Until now, city officials have relied on reserves, and have laid off 17 percent of staff, implemented furloughs, negotiated salary reductions and cut back on other expenses to balance the budget.

Still, the city is facing a shortfall, officials said.

Those who support the measure say the city will have to endure another round of layoffs and cuts that will inevitably include those in public safety departments if voters don't back the plan.

"Seventy percent of every dollar that goes into the operating budget is allocated for public safety — that's where the cuts will have to be made," said City Councilman Al Huezo, a proponent of the tax.

He pointed out that cuts will have to be made even if the tax is passed because the projected revenue does not bridge the entire gap.


Advertisement

But those who oppose the measure say the city has overspent for years on employees and projects, and could be better off by streamlining its operation.

"The city of Newark needs to live within its budget," said Dean Lewis, who is heading the group that opposes the tax.

Lewis thinks Newark has spent excessive amounts of money on projects, and fears that the city will try to build another expensive Silliman Center-type of facility to replace the older community center on Cedar Boulevard. He said the city could not afford another big project that could lose money each year.

"(We) try to outdo Fremont, but we're a small city. We can't do that," he said.

Among some of the other reasons Lewis opposes the tax: He fears the revenue could be misused and worries that once officials start collecting the tax, they'll want to continue it indefinitely.

He likened the situation to a person who got a raise and has learned to live with more money. Once that increased spending has begun, it's difficult to cut back for any reason, he said.

Advocates for the tax say that it would end in six years, and could be terminated before that if the economic climate changes.

Part of the reason the city is in such dire straits, Huezo said, is that it has been hit at the same time by a multitude of uncontrollable issues, not from overspending.

"It should be passed because we need temporary assistance. We've been hit hard by a perfect storm of the economy, mortgage crisis, (and) real estate," Huezo said. "We need this shot in the arm to stabilize us, to allow us to restructure for the next phase."

Reach Ben Aguirre Jr. at 510-353-7011. Follow him on Twitter at www.twitter.com/benaguirrejr.