New and improved tax would be on the November ballot, but
there’s some political risk for locals seeking election
Get ready voters. The City Council will more than likely be sending you a “new and improved” city utility tax for approval on the November ballot.
A close look at your PG&E, phone bill (cell and/or land line) and cable television bill will reveal that you’re already shelling out 5 percent extra that goes into the city coffers under the heading “Utility Users Tax.”
But communications technology is changing quickly, so the city has a company that’s helping map a strategy for the future to “protect” the tax revenue in anticipation of changes in federal law and, of course, changes in technology like the advent of communications like Voice Over Internet Protocol.
The communications portion of the utility tax means $1.5 million to the city annually. The current proposal would broaden the tax to include satellite television – like DirectTV and Dish Network – and lower the rate from 5 to 4.5 percent.
The utility tax is a bit of a Pandora’s Box for the city since most residents don’t scrutinize their bills enough to realize that each month they’re really paying money to the city within the framework of their bill.
There’s a risk that the utility tax could became a hot political potato, like it did in Morgan Hill a number of years ago when voters ended up repealing the tax altogether.
But there’s no jeopardy for the city in putting this proposal on the ballot in that if voters don’t pass it, the current structure will stay in place. Ah, but there is a certain political risk. What politician wants to be associated with tax proposals while running for office?
Three seats are open this November and there are six candidates. Do the incumbents want to be answering questions during the campaign season about a tax that for most residents is “hidden?”
Stay tuned, we’ll find out next week.
Meanwhile, Councilman Craig Gartman caught our attention with this statement: “Back a long time ago, they used to tax your horses,” he said. “When that technology changed to cars, then they had to change along with it. This is very similar. The revenue streams have to change with the times.”
Hmm … maybe we should go back and start taxing the horses again, too.
The good news in all of this is that half the the voters will have to approve a new utility tax law for it to be enacted. If the Council puts it on the ballot, there will be plenty of time for discussion between now and the November election. That’s good news, too.
