|Vote Yes on Richmond Measure B
February 2, 2008
Shall an ordinance be adopted to reduce the rate of the City of Richmond's Telecommunications Users' Tax from 10% to 9.5%, and to revise the method for calculating and collecting the Telecommunications and Video Users' Tax to reflect technological advances and changes in state and federal law?
It is in voters own self-interest to vote “Yes” on Richmond Measure B, which simply updates the Utility User Tax Ordinance to recognize changes in technology as well as state and federal law and actually reduces the tax rate. If the ordinance were not to pass, Richmond’s General Fund revenue could drop by over $6 million, and critical services could be cut.
Argument in Favor of Measure B (No arguments against Measure B were submitted by anyone)
Measure B will replace Richmond's current telecommunications utility tax, cutting the tax rate for residents, and modernizing the law to insure that new communications technologies for businesses are included.
Measure B was placed on the ballot by the unanimous vote of the Richmond City Council.
Recent Federal regulatory decisions and court cases have created the risk that the utility tax laws of most cities, relating to telecommunications, could be declared invalid. This would endanger Richmond's recovery. So, like many other cities, Richmond is updating its utility tax statute, and we are providing residents with a tax cut as well.
Richmond has come a long way since the layoffs and service cuts caused by State tax grabs several years ago. But we still have a long way to go:
We're on the right track to continue our recovery, but not if we let a change in Federal law knock out our utility tax.
A NO vote on Measure B would eliminate the utility tax cuts, keep rates where they are, leave some businesses not paying their fair share on new communications technology, and would leave the present outdated law vulnerable to being completely eliminated by the Federal government, endangering Richmond's vital services.
A YES vote on Measure B would insure that we can continue to bring back vital services like police, firefighters, libraries, paramedics, street repaving, senior programs, parks, and youth recreation programs.
Citizens representing the rich diversity of Richmond endorse Measure B to insure that our recovery isn't derailed by the Federal Government.
To cut the utility tax rate and keep Richmond recovering, please vote YES on Measure B.
Rogers, Councilmember, City of Richmond
Impartial Analysis by the City Attorney
Measure B is a proposed City of Richmond ordinance that would replace the existing utility user's tax on telecommunication services (including telephone service) and video services (including cable television) with an updated communications tax. The measure would reduce the current tax rate on telecommunication services by 5%, while not changing the effective tax rate on video services.
The utility user's tax on telecommunications and video services has been in place since 1994, and is paid by customers on their telephone and cable television bills. Currently, the tax rate on telecommunication services is 10%, while the effective tax rate on video services is 5%. The revenues from this tax -- approximately $6.6 million in 2006-2007 (22% of the general fund revenue) -- are used within the City for general governmental purposes and programs. The ordinance is outdated due to significant advances in technology and changes in state and federal law, and the tax is not applied to telecommunication and video services and devices that have come into existence in more recent times.
The proposed ordinance would reduce the telecommunications tax rate from 10% to 9.5%, while maintaining the effective tax rate on video services at 5%. The proposed ordinance would update the existing ordinance to apply the tax to all types of communication and video services, unless precluded by federal statute. Currently, a federal statute precludes local taxation of internet services and broadband services providing access to the internet, including email. Further, the proposed ordinance would not apply to digital downloads such as music, games and ringtones.
Taxes imposed by other California cities that contain language similar to that in the City's existing ordinance have been the subject of legal controversy. Based on changes in federal law and regulations, those telecommunication providers have disagreed with the cities' application of the tax, and filed litigation against those cities. Adoption of the proposed ordinance would protect the City of Richmond from an adverse outcome in any such litigation.
Measure B would continue to provide for an annual verification by third party auditors that the tax has been properly collected and that all revenues have been properly expended.
The tax cannot be increased in the future without a vote of the people. The proposed ordinance has no effect on the existing utility user's tax applied to electrical, gas and water services.
A "yes" vote is in favor of adopting the updated communications tax ordinance summarized above. A "no" vote is against adopting the ordinance. A majority of "yes" votes is required for the ordinance to be enacted.
A copy of the full text of this ballot measure is available, free of charge, by telephoning the City Clerk's Office at (510) 620-6513 or at the City of Richmond's webpage: http://www.ci.richmond.ca.us
West County Times
Richmond voters will decide if utility users tax continues
Article Launched: 02/01/2008 03:20:23 AM PST
Richmond voters will decide Tuesday whether to back a utility users tax that officials say would maintain $6.6 million a year in revenue.
Measure B would make permanent a 9.5 percent tax on telecommunications services, such as telephone calls, and a 5 percent tax on video services such as cable television. A simple majority vote is required.
The tax is not new. Customers already pay a 10 percent tax on telecommunication services and 5 percent on video services. But telecommunication companies have challenged in court the federal law that gives Richmond the ability to collect the fees, prompting city officials to put Measure B before voters.
The measure might not be the sexiest one on Tuesday's ballot -- no one filed a statement opposing the measure, and no hefty campaigning is under way -- but officials say it's important nevertheless.
"It's kind of like the campaign writes itself," said Councilman Jim Rogers, who asked the council to put the measure on the ballot. "We're talking about the potential of losing a lot of the services we painstakingly brought back after the financial meltdown."
A $35 million budget deficit from fiscal mismanagement resulted in layoffs and cuts to public services in 2004.
A voter-approved measure would preserve the city's ability to collect those dollars, Rogers said.
In addition, the measure would update city law to include newer technologies that have been developed since 1994 when the law was first passed. Federal regulation prohibits the city from taxing Internet services.
Any future increases to the tax must be approved by voters, according to the city attorney's analysis.
Other cities also have tried to stabilize the utility users tax. In November 2004, voters in El Cerrito, Hercules and Pinole agreed to continue the taxes in their cities, ranging from 6 percent to 8 percent. San Pablo voters approved a measure that reduced the tax from 8 percent to 7 percent while updating the law to include newer technologies such as satellite television.
Berkeley's attempt to increase its tax from 7.5 percent to 9 percent failed that same year.
Reach Katherine Tam at 510-262-2787 or email@example.com.
San Francisco Chronicle
Local tax measures on Bay Area ballots
Monday, January 21, 2008
Also on the Feb. 5 ballot, Richmond voters will see a rare sight - a measure to reduce taxes. Measure B would replace the city's existing 10 percent telecommunications tax with a 9.5 percent tax.
Federal telecommunications laws and technology have changed radically since Richmond adopted its telecommunications tax, in 1994, and the tax language must be updated or risk becoming obsolete, according to Measure B proponents.
Even though it's a tax reduction, the measure would raise more money than the old tax because it will be applied to all types of telecommunications except Internet access. Currently, the telecommunications tax just applies to cable TV and phone service.
The telecommunications tax is not a trivial matter in Richmond. Last year it raised $6.6 million, about 22 percent of the city's general fund. The new tax is expected to raise even more, helping to hire more police and firefighters, expand library hours and fix potholes.