South Gate residents consider utility tax to offset budget shortfalls

South Gate residents will make a choice at November’s General Election this year to decide whether to increase their utility bills or not.  

The South Gate City Council voted this week to add a Utility User Tax Measure to the ballot in November to help cover a projected $9 million deficit for the 2026-2027 fiscal year caused by inflation, drawing criticism among some community members. 

The Utility User Tax (UUT) is a local tax – paid by residents and businesses – for utilities such as electricity, gas, water, sewer and telecommunication, which includes cable, cellphones and landlines, exempting senior citizens over 65 from the tax.  

According to city documents, UUT would increase taxes for those services by 7%, an increase some community members said would be detrimental to lower-income households, including small businesses. 

City officials warn there are only two options for the city moving forward amid the projected deficit: Either pass the measure in November or make deep budget cuts. If the UUT measure doesn’t pass, the city would face staffing reductions across City Hall, public safety, parks and public works. The effect would also call for the elimination of city programs among other city services.

Yansi Lopez is a business owner in South Gate, who took to the podium during public comment at the council meeting. She spoke out against the ballot measure. 

“Like many in this community, I understand that the city is facing a budget deficit, but how we respond to that deficit matters," said Lopez. “Placing an additional tax on residents and small businesses should not be the first solution.”

Others scrutinized the city’s spending and mismanagement of city funds, citing another tax measure, Measure P, which passed in 2008. That measure was implemented to cover the city’s budget gap during that time, drawing more questions among community members, who are asking what happened to the money. 

“Many residents don't feel confident that additional funds will be managed efficiently,” said Councilwoman Maria del Pilar Avalos. "Whether we agree with that sentiment or not, it is our responsibility to acknowledge it and to respond with greater transparency and accountability.”

Councilwoman Maria del Pilar Avalos ultimately voted against the measure item, saying she would like to include a sunset clause to the measure to create a timeline when that measure tax would expire, rather than allowing the tax to have no end, similar to Measure P. 

Despite the councilwoman’s concern, her colleagues voted to pass the item, officially adding the UUT Measure to November’s ballot where residents will decide whether the measure passes or not.