Covina, Torrance try to ratify telephone taxes
Two more cities are lining up to ask voters to ratify and broaden their telephone taxes, also known as utility users' taxes. Los Angeles, Pasadena and Huntington Park voters went for it in February; Culver City, Malibu and Sierra Madre voters did it in April. Now voters in Covina and Torrance will weigh in.
But wait — didn't Covina recall a whole city council over phone taxes? And didn't voters there just reject the phone tax a year ago? Well, sure. But they're trying again, and on the June 3 ballot there is no opposition statement because, well, the Covina City Council didn't want to include it.
Covina's phone tax history in a nutshell: The city council first adopted its utility users' tax in 1992, decades after cities like Los Angeles did the same. The tax was 6% on telephone, electric, gas and water bills. Let's just say it didn't go over well. Voters recalled all five members of the council in 1993. The new council rescinded the tax and then — get this — a year later they put the tax back in place, at a higher 8.25% rate. Lots of I-told-you-so's all around. Then in 1999, voters adopted a 6% UUT, to expire in 10 years.
In March 2007, voters were asked to re-up the tax for another decade, but they said no. City leaders insisted that voters didn't really mean "no," but were instead befuddled by a confusing ballot format. So they put together another measure for June 3, calling on voters to extend the tax for another 10 years after its 2009 sunset.
The ballot pamphlet contains arguments for the tax, but no arguments against, because instead of filing their statement at City Hall, opponents filed with county officials. The county, not the city, is running the election, and county officials said they wouldn't mind bending the rules and including the statement, but Covina officials, sticklers for procedure when it helps their case, said thanks, but no thanks.
See a pdf of the Covina ballot here and go to page 20, and on through the end.
It's easy to see why they would get nervous about losing the tax: The $5.5 million it brings in each year accounts for 20% of Covina's general fund budget.
Unlike Los Angeles' Proposition S from the February ballot, Covina's UUT does not broaden the phone portion of the tax to newer technologies.
That's Measure C, by the way — "C" for Covina. Measure T is in, of course, Torrance, and does broaden — sorry, "modernize" is the term of art — the phone portion of that city's 6.5% tax that first was adopted in 1972. From the ballot argument in favor: "To keep pace with technology advances, the City must modernize and ratify its UUT — closing loopholes that didn't exist in the 1960's." Translation: You people keep making your calls on newfangled cell phones and online instead of the old-school land-lines we're used to taxing you for, and when we tried to tax your new high-tech calls, we got challenged in court, so vote yes and let us keep taxing you on all your calls.
See a pdf of the Torrance ballot here, and go to page 24.
Extending the tax makes sense, but the verbal and intellectual gesticulations the cities go through to justify the move are, uh, taxing. They could just say that as consumers shift from old, taxable services to new, non-taxable ones, they are being de-funded. They could say that it makes sense for the service, rather than the technology, to be taxed. But they instead talk about closing loopholes. Some cities, like Los Angeles, even market their measures as tax reductions. Go figure.
Here's more on the legal background, but get ready for another wrench to be thrown in the works: Rep. Zoe Lofgren (D-San Jose) has introduced a bill to bar cities, counties and states from taxing cell phones.