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HomeMy WebLinkAbout07-10-2012 PH1 BourbeauRECEIVED !�7 council mEmoaanNbYCLERK July 10, 2012 TO: City Council AGENDA CORRESPONDENCE D ate 21L0 11tem FROM: Charles Bourbeau, Director of Finance & Information Technology VIA: Katie Lichtig, City Manager SUBJECT: Sample Arguments For and Against Utility Users Tax Ordinance Modernization Ballot Measures DISCUSSION The July 10th Council agenda includes item PHI for the placement of a Utility Users Tax Ordinance Modernization measure on the ballot as conceptually approved by Council at its June 5th meeting. The agenda report recommends the appointment of two councilmembers to an ad hoc committee to submit arguments for inclusion with the sample ballot. To aid in the Council's decision making on this matter, attached are sample arguments for and against recent similar measures in other cities along with rebuttal arguments. Attachment: Sample UUT Ballot Arguments hard c y e g , a COUNCIL 0 CDD DIR a CITY MGR o FIT DIR a AIST CM o FIRE CHIEF a MOM a PW DIR a CLPVJORIG a POLICE CHIEF a PARKS & REC DIR a UnLDIR o HR DIR I COUNCIL u CITY MGR a CLERK SAMPLES OF BALLOT ARGUMENTS FOR OR AGAINST UTILITY USERS TAX ORDINANCE MODERNIZATION MEASURES City of Modesto: Passed 76.56% in November 2011 No arguments filed for or against. City of Moreno Valley: Passed 79.19% in November 2008 Arguments For Measure P Measure "P" will not increase taxes. It will: Lower the current utility user's tax (UUT) on all utility services by one - quarter percent (1/4 %) from 6% to 5.75 %; Modernize the City's UUT ordinance to treat all taxpayers who use telecommunications services fairly and equitably; and Remove the risk of the City losing nearly $5 million in revenue that provides funding for vital City services, In 2006 the IRS repealed the FET and directed all telephone companies to discontinue collecting the FET on long distance calls, including wired and wireless phones, voice over internet protocol (VoIP) and prepaid cards. The IRS ruling has now resulted in lawsuits against some city UUT ordinances claiming that the local taxes on those calls are no longer valid. In addition to legal challenges to UUT ordinances, there are technological ones as well. Since 1996 when Moreno Valley voters approved the UUT ordinance, telecommunications services have changed dramatically. There is a vast array of telecommunications services being provided. Some are using private communications Arguments Against Measure P Measure "P" is misleading to Moreno Valley Taxpayers. If the Utility User's Tax was only being reduced a ballot measure is unnecessary. The City Council wants to impose the UUT on heretofore - untaxed telecommunication services. Because Proposition 218 says no government may increase a_y general tax unless that tax is submitted to the voters and approved by a majority vote, Moreno Valley must put this measure on the ballot. With the economic difficulties faced by families, at the very least, there should have been more than a token cut in this regressive tax. Using the carrot and stick method on we taxpayers is disingenuous and to disguise a tax increase on heretofore untaxed services. The Utility User's Tax is a general tax and goes directly into Moreno Valley's General Fund. In 2006 the UUT collected $13,812,000 and in 2007 $15,463,000 was collected (City CAFR 2007). This City Council could have, without spending for a ballot measure, cut the UUT at any time during these past few years of unprecedented revenue growth, but they didn't. Moreno Valley, like the rest of California governments is now in a revenue downturn. Unfortunately, the taxpayers and families of our City are also experiencing an economic squeeze: stagnant wages, fewer jobs, higher systems and the Internet protocol with high speed, broadband services, none of which are covered in the City's current UUT ordinance. As more people use new technology, UUT revenue will decline. Worse, people who can afford the new technology escape the UUT while those who must use the older technology are taxed. That's not fair. The City cannot afford to lose $5 million in tax revenue that is used for funding public safety and other vital services. Like many other California cities that have placed similar measures on the ballot and received overwhelming approval,it's time to fix our City's outdated UUT ordinance and treat all taxpayers equitably. We urge your "YES" vote on Measure "P." By: William H. Batey II, Mayor Frank West, Mayor Pro Tern Bonnie Flickinger, Council Member Richard A. Stewart, Council Member Charles R. White, Council Member Rebuttal to Arguments For Utility Taxes (UUT) are regressive taxes because they fall on life's necessities such as water, cooling, heating, lights, communication, etc.). The UUT: Adopted in 1991 a temporary tax with a 3 -year sunset clause. Special Election June 1996 to make tax permanent, Voters voted NO. The utility tax was voted into law November 1996 after the City Council put it back onto the ballot this time with additional items to be taxed: cell phones, wireless pay television. UUT revenues the city collects have grown food prices, declining home values, higher gas prices, and higher utility rates. Let's bring fiscal sanity to our local government, VOTE NO ON MEASURE "P." Real tax reduction to reduce the tax burdens on our families and businesses is the way to bring economic growth and Measure "P" is not that. By: Marcia Amino, Homeowner Ted T. Amino, (Ret.) Rebuttal to Arguments Against Measure "P" reduces the Utility Users Tax from 6% to 5.75 %. The City Council can reduce the Utility Users Tax; however, a ballot measure locks the reduction in and prevents the City Council from increasing it. In addition, Measure "P" will modernize the language to make the tax fairer to all those using similar services and utilities. A YES vote for Measure "P" will reduce the Utility Users Tax. The argument against states a ballot measure is unnecessary. In order to make the reduction permanent and fair to all, Measure "P" is necessary. Once Measure "P" reduces the Utility Users Tax, the City Council cannot raise it without a vote of the people. Vote YES on Measure "P." By: William H. Batey II, Mayor Frank West, Mayor Pro Tern Bonnie Flickinger, Council Member Richard A. Stewart, Council Member Charles R. White, Council Member over 100% since the 1991 inception. The Council can cut this tax any time with NO ballot measure. Under Proposition 218, Right to Vote on Taxes Act, a ballot measure is necessary for tax increases. Measure "P" is a tax increase on previously untaxed telecommunication services. Our Council has budgeted up to $90,000 of our tax money to convince us to raise our taxes. With fewer jobs being created, home foreclosures, mounting bills, higher gas prices, higher health care costs, climbing food costs, raising utility costs, residents falling behind on paying utilities, and skyrocketing debt, Moreno Valley taxpaying families need less taxation not more. TO PREVENT A TAX INCREASE, VOTE NO ON MEASURE "P." By: Marcia Amino, Homeowner Ted T. Amino, Ret. Homeowner City of Mountain View: Passed 70.11% in November 2010 Arguments'For Measure T Because of changes in federal law and advances in technology, Mountain View's current Utility Users Tax needs to be modernized and approved by voters. Mountain View's current Utility Users Tax was enacted 40 years ago. It has been a steady source of local revenue that has allowed Mountain View to provide a high level of service to residents. However, the tax was enacted at a time when communication Arguments Against Measure T Call this Measure what it is; A tax increase. Your phone calls that were not taxed last year now will be taxed. So, before voting on this tax increase, you need to ask yourself, "Why am I being asked to increase my taxes ?" Are you going receive a new service that you currently are not receiving? The simple answer is no. The City Council technology was much simpler and only covered intrastate, landline telephones. While cell phone and landlines are already covered by the existing ordinance, other technologies are not. Measure T will ensure that, regardless of what telecommunication provider or technology a person or business is using, everyone pays the tax. Measure T will update our current Utility Users Tax so that all Mountain View residents and businesses pay their fair share regardless of the type of communication technology they choose. This is not a new tax. The current rate of 3 %, well below the State average of 6 %, will not change. The UUT provides funds for important City services, like fire and police protection, emergency medical response, library services and programs, maintenance of parks, play grounds and athletic fields, after school programs for children and teens, and gang prevention and intervention programs. Most neighboring cities have already modernized their UUT's to conform to federal law. Measure T is not a new tax, and the rate will not increase. Please join Mountain View City Council members and business and community leaders in supporting Measure T. Please vote yes on Measure T. /s/ Gloria Higgins Retired Mountain View - Whisman School Board Member /s/ Sally J. Lieber State Assemblywoman, Retired /s/ Lisa Matichak Environmental Planning Commissioner /s/ Chris Clark needs more of your money because they promised city employees $100,000 pensions and lifetime health insurance, but never got around to fully funding either. Now it's time to "pay the piper" and the city wants you to pay even more taxes. But it's just a band -aid, because the City Council still has not solved the underlying problem. The city still has contracts that promise $100,000 pensions, and we still have millions of dollars of unfunded liabilities. Until the City Council resolves these issues, raising taxes just hides the problem. This year, the City Council already has imposed significant water and trash hikes and doubled the cost of numerous permits and fees in all departments. Until the City Council resolves employee compensation and benefit obligations, raising taxes just sidesteps these problems - -and creates new ones. Vote no on utility tax "modernization." /s/ Donald J Bahl City Of Mountain View Voter Rebuttal to Arguments Against The lone opponent of Measure T is mistaken. This measure has absolutely nothing to do with pension plans, health insurance or increasing taxes. The City's existing Utility Users Tax (UUT) is 40 years old and legal experts warn that the ordinance could be at risk of legal challenge. The City had several options: 1. Do nothing, risking legal challenge and costing taxpayers even more money. 2. Increase the tax rate to increase revenue; Community Volunteer /s/ W.B. Suverkropp Resident Rebuttal to Arguments For The current Utility Users Tax does not need to change. No federal or state law requires the city "Modernize" The proposed tax is an attempt to raise additional tax money to deal with the city's budget problems - caused by unsustainable compensation promised to city employees. For example, "Median total compensation for police and firefighters is $190,591.00 and $123,754.00 for other city workers." (San Jose Mercury News, August 8, 2010, "Salaries under Scrutiny "). Measure T will ensure that you now pay "your fair share" in new expanded taxes to pay these six figure salaries. All contracts promising these outrageous sums are still in place. "The biggest impact may be on businesses. The city reports that a mid -size business using [Voice over Internet Protocol] could see an estimated increase in their phone taxes from $100 a month to $600." (Mountain View Voice, July 30, 2010 "City puts broader phone tax on ballot ") We need to decrease the tax burden on employers, not think up new ways to tax them. The city could cut necessary services such as fire and police protection, etc., but they don't have to. This is not the problem. Arguments like this are scare tactics to get you to pay another tax. Don't be fooled by the arguments for the utility many cities have done this. 3. Modernize the existing tax with no increase to the tax rate. The City chose this third and most conservative option. This is Measure T. Measure T ensures greater fairness in how the UUT is charged. Today many larger Mountain View companies may not be paying taxes on phone usage because they use private communications lines, like T -1 lines, which are not subject to the UUT. Passage of Measure T remedies this. All ratepayers in Mountain View will be charged their fair share. Most ratepayers will see little or no difference in their bills or taxes. All revenue from the UUT will continue to be used for critical City services including fire and police protection, emergency medical response, park maintenance and after school programs for children and teens. We respectfully ask for your Yes vote on Measure T. /s/ Michael Kasperzak City Council Member and Former Mayor /s/ Carol Olson Former President and CEO, Mountain View Chamber of Commerce /s/ Ken Rosenberg Resident /s/ H.J. Donagher III Community Organizer /s/ Aaron Grossman Resident tax. You are facing hard times. Do you really want to increase the taxes you pay? Vote No on Measure T /s/ Donald J Bahl City of Mountain View Voter /s/ Mike Laursen Mountain View Resident /s/ Greg Perry Former City of Mountain View Council Member City of Santa Barbara: Passed 70.98% in November 2008 Arguments For Measure G2008 Santa Barbara police officers, firefighters, business and civic leaders, seniors, parents and citizens throughout our community urge you to Vote Yes on G. Yes on G reduces the existing Telecommunications Utility Users Tax, from 6% to 5.75 %, while still providing over $4 million to fund: . Police, fire, and 911 emergency communications Parks and recreation, Gang prevention and after school programs for at -risk youth Senior services, Street and pothole repairs Public transit and other general fund services. Yes on G continues funding for youth programs that serve thousands in our community. Yes on Arguments Against Measure G2008 Santa Barbarans who believe that new technologies should not be taxed should vote No on Measure G. Measure G is an attempt to tax cell phones and other new technologies by the City of Santa Barbara, The City of Santa Barbara has presented no compelling argument that the funds that would be obtained by Measure G are vital to city services. Indeed, in recent years, the amount of revenue the city taxes and otherwise receives has increased significantly, with little to show for it. For too long, the City of Santa Barbara has increased taxes and fees for frivolous projects and unnecessary expenditures. The funds from Measure G would not be used for important city services. They would be used for G continues funding for anti -gang and anti -drug programs in local schools, and after - school activities, recreational program and summer camps to keep kids off the streets and out of trouble. Measure G is not a new tax. For almost 40 years, the current tax has helped ensure that our police and firefighters are there when we need them, and funded road repairs, youth and senior programs and other vital community services. However, the existing ordinance was enacted before the introduction of many modern telecommunication technologies. Yes on G simply replaces the existing ordinance with one that is consistent with new federal and state law, and modernizes definitions to close loopholes and ensure equal treatment for all taxpayers. Without Yes on G the City may have no choice but to cut services. Yes on G specifically exempts Internet access service charges, continues the existing exemption for low- income individuals, and prohibits any future rate increase without voter approval. Yes on G requires that every penny raised stays in our city and gives local residents control over how our local money is spent. Please Vote Yes on G. Cam Sanchez, Chief of Police, City of Santa Barbara Pat McElroy, Santa Barbara City Firefighters Association Hal Conklin, Executive, Southern California Edison Former Mayor, City of Santa Barbara Beebe Longstreet, Chair, Park and Recreation Commission, City of Santa Barbara unnecessary city spending. New technologies such as cell phones should be encouraged, not taxed. Much of the economic effectiveness of the internet is that it is currently untaxed. Measure G would create many problems in implementation. Once local cell phone providers were taxed, would this lead local residents to seek providers for new communicative technologies from outside of the area? How would, for example, out -of- state communicative technology providers be taxed by the City of Santa Barbara? If individuals were passing through Santa Barbara, would their cell phone calls be taxed while they were in the city? Measure G would be a 5.75% tax on utilities in the City of Santa Barbara. Many cities do not have a utility users tax. Especially at a time when the price of energy has skyrocketed, it is not the time for the City of Santa Barbara to implement a new utility users tax. Vote No on Measure G. Vote against unnecessary taxes. Jan Evans Chris Hartman Tom Baniga Wayne Reddoch Rebuttal to Arguments Against http://www.santabarbaraca.govNR/rdonlyres/ 159CE45F-4C50- 444E -963D- 61371 D22DC6EE /0 /RebuttaltoArgumentAgain stMeasureG.pdf The opponents of Measure G mislead voters Rebuttal to Arguments For http://www.santabarbaraca.gov/NR/rdonlyres/5 6400F80-6E93- 4417 -BOAB- D970CAB 12443 /0 /RebuttaltoArgumentinFavor ofMeasureG.pdf Many city employees are now able to take every other Friday off, and most city employees may retire between ages 50 and 55 -with a pension almost equivalent to final sala and benefits for life. Proponents of Measure G represent the will of the City of Santa Barbara's public employee unions and bureaucracy. They have, in their misleading 'pro' statement, cherrypicked positive city services that almost everyone supports. It is as true to say that proceeds from Measure G would go to the following activities as it is to say they would support the causes proponents enumerate: • More projects like the "light blue line" • Increases in salary and benefits for members of the City Council • More tree removal on major thoroughfares • Dozens of more traffic miniroundabouts throughout the city Measure 0 would be a regressive tax affecting the young and the poor the most. By attempting to tax cell phone use, Measure G would discourage new technologies. Proponents inflate the funds Measure G would bring to the city. Measure G would only be a tax on new long- distance calls - - -the city would continue to receive revenue from local calls. In fact, the amount of revenue the city would receive from the new telecommunications tax would equal less than 1.5 percent of total city spending, less than one -half of a typical year's increase in revenue. College students in with inaccurate, exaggerated. statements and offer no solutions to address the true needs of our community. Police, Fire, 911 emergency communications, and gang prevention programs are NOT "frivolous services" Measure G is not a new tax. It simply maintains existing funding for vital community services. Over 150 Cities in California currently collect utility users taxes and have had no problems with implementation. The Federal Mobile Telecommunications Sourcing and Privacy Act, which was passed by Congress eight years ago, addresses all of the speculative questions on implementation raised by the opponents of Measure G. Yes on G will reduce the current tax on cell phones and other new telecommunication technologies, and prohibits any taxes on internet connection fees. Yes on G is fiscally responsible. It requires that all the funds collected remain in our community. Yes on G requires public audits and public review of how all the funds are spent. <bVote Yes on G to maintain local funding for vital community services including: . Police, fire and 911 emergency communications . Parks and recreation . Gang prevention and after school programs. for at -risk youth . Senior services . Street and pothole repair . Public transit and. other general fund services. Please join police officers, firefighters, particular should be aware that Measure G would tax cell phone use. aping, and text messaging. Vote No on G. business and civic leaders, seniors, parents and citizens throughout our community: Vote Yes on G. For a complete list of endorsements and more information, visit: http: / /www.YesOnG.net. Cam Sanchez, Chief of Police, City of Santa Barbara Mike McGrew. Santa Barbara Police Officers Association Hal Conklin, Executive, Southern California Edison Former Mayor, City of Santa Barbara Beebe Longstreet, Chair, Park and Recreation Commission, City of Santa Barbara