City of Palo Alto Utility User Tax, Measure C (November 2014)

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A City of Palo Alto Utility User Tax, Measure C ballot question was on the November 4, 2014 election ballot for voters in the city of Palo Alto in Santa Clara County, California. It was approved.

Measure C maintained the telecommunications portion of the utility users tax, while reducing the rate from 5 percent to 4.75 percent. The measure also modernized the provisions of the tax to ensure equal treatment of taxpayers regardless of telecommunications technology used and eliminated the discounted rate paid by large commercial users of gas, electric and water services.

Election results

City of Palo Alto, Measure C
Result		Votes	Percentage
a Yes		16,988	85.08%
No		2,978	14.92%

Election results via: Santa Clara County Elections Office

Text of measure

Ballot question

The question on the ballot:

“

To ensure continued funding for basic and essential services such as police, fire and street maintenance and repair, shall the City of Palo Alto maintain the telecommunications portion of the Utility Users Tax while reducing the rate from 5% to 4.75%; modernize its provisions to ensure equal treatment of taxpayers regardless of telecommunications technology used; and eliminate a discounted tax rate paid by a small number of commercial large users of gas, electric and water services?

”

Impartial analysis

The following impartial analysis was prepared for Measure C:

“	This measure would amend Palo Alto's Utility Users Tax ("UUT") ordinance to: (1) modernize the telecommunications part of the UUT; (2) reduce the telecommunications tax rate from 5% to 4.75%; and (3) eliminate an existing rate discount that applies to a small number of customers who use large volumes of water, gas and electricity. Palo Alto voters approved the UUT in 1987. Since then there have been no amendments to the ordinance. The UUT represents 7% of the City's general fund revenue. These revenues cannot be taken away by the state. They are used for general local governmental purposes such as police, fire, public works, parks and recreation, library and capital improvements. This measure would make three changes to the UUT. First, the measure would modernize the telecommunication part of the UUT to reflect changes in federal law, account for technological advances and treat all technologies equally. In recent years, many cities have modernized the telecommunications part of their UUT ordinances to respond to changes in federal law and to reflect the shift from landline telephones to digital communication technologies such as wireless and VOIP. Federal law does not permit cities to tax internet access and this measure does not alter this. Most wireless carriers are already including the telecommunications tax on users' bills. This measure is not expected to result in significant changes to customer bills. Second, the measure would reduce the telecommunications tax rate from 5% to 4.75%, for all users. Third, the measure would eliminate an existing rate discount that benefits the nine largest users of water, gas and electric utilities. These nine "large users" are big businesses or institutions. Eliminating the discount will mean the nine "large users" will pay the same rate that everyone else in Palo Alto already pays. Reducing the telecommunications tax rate from 5% to 4.75% would result in a small annual revenue reduction that is expected to be offset by revenue increases from elimination of the discount for large users of water, gas and electricity. The ordinance will become effective if a majority of those voting on the measure vote for it. A vote "For the Ordinance" will modernize the telecommunications language, reduce the telecommunications tax rate from 5%to 4.75% and eliminate the discount for large users of water, gas and electricity. A vote "Against the Ordinance" will keep the UUT as it is.	”
—Molly S. Stump, Palo Alto City Attorney

Support

Supporters

• Richard Rosenbaum, Former Mayor
• Liz Kniss, Vice Mayor, Former Mayor
• Carolyn Tucher, Former PAUSD President
• Lydia Kou, Resident
• Greg Scharff, Council Member

Arguments

The following was submitted as the official arguments in favor of Measure C:

“	As a result of changes in federal law and advances in technology, Palo Alto's current Utility Users Tax (UUT) needs to be modernized. NOT A NEW TAX: Our current UUT was enacted in 1987. It has been a steady source of local revenue that helps Palo Alto provide a high level of services to residents. However, the tax was enacted when communication technology was much simpler and the UUT applied primarily to landline telephones. While most cell phones are already covered by the existing ordinance, certain other modern telecommunications are not. FAIR SHARE: Measure C will ensure that everyone pays, regardless of the telecommunication type or provider they choose. REDUCES RATE: Although the current rate of 5% is already below the State average of 6%, Measure C reduces the rate to 4.75%. LOCAL TAX: UUT revenues cannot be taken away by the State. This general tax has provided funds for important City services like fire and rapid emergency response, sidewalk, park, playgrounds, and athletic field maintenance. It also helped with payments to the School District for the historic lease agreement at the former Cubberley High School site which today offers recreation, playing fields, classes, child care and senior services in south Palo Alto. Most neighboring cities have already modernized their UUT language,and it's time that Palo Alto does too. A NO vote keeps the tax at current levels. Please join Palo Alto City Council and community leaders in voting YES on Measure C to modernize the UUT.	”
—Richard Rosenbaum, Liz Kniss, Carolyn Tucher, Lydia Kou and Greg Scharff

Opposition

Opponents

• Mark W.A. Hinkle, President: Silicon Valley Taxpayers Association
• Edward Leo Wimmers, Chair, Libertarian Party of Santa Clara County

Arguments

The following was submitted as the official arguments in opposition to Measure C:

“	As a taxpayer, you pay for services provided by the City via a number of different taxes, one of them being a Utility User Tax. As an individual, if you want a service or product, you would expect to have to pay for it with your money. Being a person of good conscience, you wouldn't force anyone else to pay for the goods and services you want. Right? And you wouldn't hire someone else to steal money to pay for those goods and services. Right? But, isn't that what a Utility Tax essentially does? Through taxation, aren't you hiring someone (government agents) to force other people to pay for goods and services you want? And if it is wrong for you as an individual to take money from others, against their will, isn't also wrong to hire someone to do essentially the same thing on your behalf? The Palo Alto Utility User Tax wants to increase the tax on "someone else" so they can continue to provide you with services you presumably want, i.e. police, fire, libraries, etc. They want to charge commercial customers a higher rate. But, all businesses have to pass all costs of doing business onto their customers, either locally here in Palo Alto or to other customers from around the world. So, taxes on businesses are just a hidden tax on their customers, including you. The proponents say "The telecommunications portion of the total UUT revenue is $2.8 million annually or nearly 2 percent of the general fund revenue". Do you think there's more than 2% waste in the City Government's operations? If so, lets defeat this "hidden" tax increase and send a message to the City Council to cut at least 2% fat from their bloated budget.	”
—Mark W.A. Hinkle and Edward Leo Wimmers

See also

• City tax on the ballot
• Local utility tax and fees on the ballot
• California Utility User Taxes
• Santa Clara County, California ballot measures
• November 4, 2014 ballot measures in California

External links

Suggest a link

• Santa Clara County Registrar of Voters office website