City of Chico Utility Users Tax, Measure J (November 2012)

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A City of Chico Utility Users Tax, Measure J ballot question was on the November 6, 2012, ballot for voters in the City of Chico in Butte County, where it was defeated.

Measure J would have:

  • Reduced the current utility tax rate from 5% to 4.5%
  • Applied the tax "to all users of telephone communications services regardless of the means of transmission or technology used to provide such services, including users of cellular services, private communication services, voice over interne services, paging, text messaging and traditional land line services."

Although the tax rate would have gone down, it would have applied to more forms of telecommunications. This means that with Measure J, the city would have actually collected about $900,000 more than it does with the current, slightly higher, tax.


  • The City of Chico has had a telephone users' tax since 1970. It is charged on the telephone bill of those in the city who have a telephone.
  • Money from the tax goes into the city's general fund.
  • Measure J, according to the city attorney, was worded in a way that would protect the current city tax against a litigation strategy that has been successful in other cities that revolves around complex federal issues about telecommunications and the IRS.

Election results

Measure J
Defeatedd No16,48153.62%
Yes 14,257 46.38%
Final official results from the Butte County elections office.


Supporters of Measure J include:

  • Ann Schwab, Mayor of Chico
  • Jim Walker, Vice Mayor of Chico
  • Mary Goloff, a member of the Chico City Council
  • Andy Holcombe, a member of the Chico City Council
  • Scott Gruendl, a member of the Chico City Council

They said:

"The City of Chico is at risk of losing $900,000 each year if voters do not approve Measure to modernize the language of its current Users Utility Tax (UUT) ordinance. This would represent a significant reduction in General Fund revenue. The primary purpose of amending the telephone users' tax is to protect existing revenue for the General Fund. A loss of $900,000 a year would result in reduced police and fire services, road maintenance and park funds.
In recent years, there have been significant changes in both technology and billing practices. The use of wireless services and voice over internet protocol has become widespread, billing for local and long distance services is frequently bundled, and long distance calls are not always billed based on time and distance, even for land lines.
To protect against the risk of losing tax revenues in the face of legal issues, approval of Measure will modernize this existing tax to ensure that all users of communication services are treated the same, regardless of the type of technology they are using or billing practices employed by their providers."


  • Mark Sorensen, a member of the Chico City Council, opposes Measure J.
  • Robert W. Evans opposes Measure J.

They said,

"The bloated Chico bureaucracy already extracts over $6.5 million per year from its struggling businesses and citizens by taxing basic life necessities such as water, electricity, natural gas and traditional telephone services, and now the Chico bureaucracy wants to expand that tax to apply to cellular phone services and every form of electronic communication service existing now, and those yet to be invented.
The sales pitch of a supposed reduction in tax rate (only on telephone services) diverts your attention from the goal of expanding the tax to new communications services, and the resultant tax revenue increases.
Taxing life's basic necessities must stop. These regressive taxes disproportionately harm lower income families at a time when they already struggle to pay for ever increasing service costs. Chico City Taxes on water, electricity, natural gas and phone services are bleeding Chico's citizens and businesses dry. It is time to say no more. Chico is at a competitive business disadvantage to other communities. City government must tighten its belt by cutting back on nonessential programs and services."

Text of measure

The question on the ballot:

Measure J: "Shall an ordinance be adopted to amend the City's Telephone User's Tax in order to: 1) reduce the tax rate from 5% to 4.5%; 2) modernize the definition of telephone communication services subject to the tax to include new technologies such as wireless and voice over interne services; 3) apply the tax to all telephone communications services regardless of the type of technology used; and 4) reflect changes to federal and state law?"[1]

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