Lakewood Measure "L" (utility users tax) results

It looks like this tax and a host of others will be increasing during the recession. No idea what Lakewood will tax next under Measure L as it is written to broaden the scope of what "utilities" and services are taxable. And don't expect any accountability from this city, who's motto should be city of obfuscation, the opposite of transparency. You never get a straight answer and to get it you have to pry it out of them. So dont go looking for where this money is really going. Its theirs now and they will do with it what they want. You had the chance to make the city accountable and once again the voters failed.

As of Date: 11/05/2008 Time: 03:24

LAKEWOOD MEASURE L - COMMUNICATION USERS' TAX -
(MAJORITY OF VOTES CAST) -

Yes	21,848	78.74%
No	5,898	21.46%

TOTAL PRECINCTS 52 PRECINCTS REPORTING 52

REGISTRATION 42,237

Lakewood Accountability Action Group™ LAAG | www.LAAG.us | Lakewood, CA
A California Non Profit Association | Demanding action and accountability from local government™

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Vote NO on Measure "L" the Utility Users Tax: Tell the City Back to the Drawing Board

Measure "L" Utility Users Tax: The Tax Grab Broadens its Reach

This November 4 election will not only involve a new President but many state and local measures which are making a grab for your wallet. Clearly the Utility Users Tax (UUT) "increase" (or rather broadening in reach and scope) could not come at a worse time given the current economic "meltdown".

As it typical with Lakewood city government, the city is not telling voters the whole story on the UUT tax increase in Measure "L". (Lakewood kept LAAG's "No on L" argument off the November ballot while accepting the "Yes on L" argument) They claim Measure L is simply “updating” the existing tax ordinance but in reality it is a broadening of the ordinance in order to make the tax apply to more services and utilities likes calls made over the internet. That was the whole reason why this UUT in Measure L required another vote. The City does not want to do this again so they are broadening the ordinance to not only bring in more revenue (by taxing more types of services and utilities like VOIP phone service, and other future technology like femtocells etc.) but to make it easier in the future to tax "yet unknown" or unforseen sources of revenue ...without a further vote by the taxpayers. All while duping the taxpayer into not thinking they are getting a tax increase just because the tax "rate" is not increasing.

So for right now they are claiming that internet access, email and related content and services are not being taxed under Measure L but this is only due to the fact that Federal law prevents it at this time. But if that changes in the future then Lakewood could use Measure L to tax those new services, without asking for your permission or taxpayer approval via an election.

The city claims the 3% rate will not increase without a vote but nothing in Measure L prevents them from further broadening the application of the tax to other "services" or "utilities" without taxpayer approval.

Another very sneaky tactic is telling voters that the funds will be used for a certain service, project or activity when the proposed ordinance does not mandate such use. The reason the city has done this is it knows that voters are less likely to approve a “general slush fund” tax especially when the money can be funnelled to special interests (like those entities or their representatives who signed the ballot argument in favor of Measure "L"). Voters are more likely to approve a tax that is earmarked for “specific services”. However it takes a 2/3 majority vote in order to pass a “special tax”, whereas a “general tax” (such as this proposed UUT) only needs a simple majority to pass. Deceptively, the voter booklet voters are provided with tells voters:

"Shall an ordinance be adopted to ...fund law enforcement, gang and drug prevention programs, after-school activities, senior transportation, parks, street and traffic signal maintenance and other essential services, ... regardless of technology used, annual audits, public review of expenditures, no rate increases without voter approval, and local control of revenues?"

If you want to read the entire 15 page ordinance of Measure L please click here (PDF)

Again they city has attempted to enumerate those uses that they know will garner votes for the measure but fail to explain to voters that the tax revenues can be used for what ever the city council decides to use them for. That is there the sneaky phrase "and other essential services" above comes into play. What does that mean? Only the city council will decide. For example if the city council decided to use the revenues to redecorate their offices, there is NOTHING in Measure L that prevents that.

There is nothing in Measure L that governs the use of the taxes. That includes even restricting where this tax money cold be used. For example it could be used outside the city of Lakewood. This ordinance does not change anything with respect to existing law on such matters.

Another feature the city likes to tout in Measure L is the "public review of expenditures". Nowhere in Measure L is there any change to existing law with respect to the "transparency" that they city will allow or promoting the use of the internet to increase public awareness of the use of tax dollars like this. There is nothing in Measure L that increases public review or accountability or even visibility. Ask yourself this: if the city council is so transparent why have they never posted the full city budget on line or the audits and budget expenditures of all the prior $35 million (the city's figure) collected since 1992 under the existing UUT? Because they dont want to to know where the money goes and they dont want you to know what is going on with your tax dollars. The devil is in the details! Other city’s UUT ordinances specifically allow for citizen oversight on the utilization of the new funds. Not Measure L.

There are other problems with Measure L. Lets say you use a cell phone, a land phone and VOIP all together. You will be taxed on all three devices, so there is overlap in the tax. The tax is regressive in that it is a greater burden on low or fixed income residents and the more you use the phones and other services the more you will be taxed. However as we all know utilties are now mostly taxes and have very high minimum monthly fixed charges. This tax feeds off those minimum charges. Also if your neighbor only uses a land line and not other technologies he will only be taxed once. So the fairness of Measure L is not as big a selling point as the city makes it out to be.

Also do not assume that 3% is a "low" tax rate. Take a look at your utitlty bills with 10 or so different taxes on it and see which one is higher than 3%. Likely none. So why is 3% deemed reasonable? Especially when Measure L will now be covering more of your services and utlities. The problem of course is the cumulative effect of all these "low" taxes on your overall bill. That is why utility bills are always advertised without all the taxes, which can add as much as 15% to the total. And we have all seen how these taxes are wasted.

Lets not forget the other tax increases on the horizon either; the 0.5% county and 1% state sales tax increases that combined will increase LA County’s sales tax to 9.75%, the highest in the country. This is another tax grab when voters can least afford it.

Also voting NO on Measure L leaves the old tax in place. It does not eliminate the old tax or the revenue. If this were not a chance to get more revenue why would the city and the Sheriff's department be in favor of it?

Dont buy the City's deceptive tax grab. Tell the city to get this right by increasing oversight and accountability provisions to prevent abuse of your hard earned dollars. (Just like the Federal bailouts) VOTE NO on Measure "L"

Lakewood Accountability Action Group™ LAAG | www.LAAG.us | Lakewood, CA
A California Non Profit Association | Demanding action and accountability from local government™

click here to receive LAAG posts by email

Agenda item for 12/11/07 city council meeting

Very cryptic item on the agenda for the 12/11/07 city council meeting:

"CLOSED SESSION: Utility Users Tax CONFERENCE WITH LEGAL COUNSEL ANTICIPATED LITIGATION Significant exposure to litigation pursuant to Government Code §54956.9(b) in one case "

Here is the agenda link: http://www.lakewoodcity.org/council_n_coms/city_council_agenda.asp

If anyone has any information on this please pass it along to us. Does this mean that the city is proposing a new or additional city utility users tax?

Lakewood Accountability Action Group™ LAAG | www.LAAG.us | Lakewood, CA
A California Non Profit Association | Demanding action and accountability from local government™

Utility Users Tax Background

Local cities' revenues at risk.
This article is from the Long Beach Press-Telegram.

Publication Date: 04-FEB-96
Author: Peterson, Thair

Millions of dollars in utility taxes and other levies enacted by Los Angeles County and local city halls in recent years have been placed at risk by a state Supreme Court decision which suggests that those taxes might require voter approval.

The decision could cost cash-strapped Los Angeles County more than $50 million a year in revenues raised in unincorporated areas, ranging from utility taxes to surcharges on tickets for Magic Mountain and Universal Studios.

The ruling could grab a 5 percent to 20 percent chunk out of the general fund budgets of cities like Artesia, Bellflower, Hawaiian Gardens, Lakewood and Norwalk.

``It would be an extraordinarily catastrophic impact,'' said Lakewood city spokesman Don Waldie. Lakewood gets $2 million from the its utility tax.

``It's pretty serious,'' said Ben Harvey, assistant to the Bellflower city manager. ``We'd have to cut services, lay off people or shut down facilities.''

In a late December ruling on a related issue, the state supreme court said that utility taxes, business license fees and the like, were a violation of Proposition 62, a 1986 voter-approved measure that requires such taxes receive voter approval.

But despite several legal requests to do so, the Supreme Court's final ruling in late December left certain key questions unanswered, such as whether the ruling invalidated taxes enacted beginning in 1987.

The Howard Jarvis Taxpayers Association has threatened to sue any cities that do not put the taxes before the voters this November.

Association President Joel Fox said he wants cities to pass resolutions by next month saying they will put the matter on the November ballot.

``Let them make their case to the people .T.T. If they don't, we'll start suing them,'' Fox said.

However, local governments say that they are on solid legal ground.

Lakewood's Waldie said cities enacted their levies at a time when Sacramento was shifting massive amounts of tax revenues to the state, and when local government needed a revenue source that ``did not pass through the grasping hands of the state Legislature.''

The cities acted in good faith, based on lower court decisions which had declared Proposition 62 unconstitutional.

Hoping to avert a legal challenge, the League of California Cities has drafted a bill that would make it clear that only taxes enacted after the Dec. 14 Supreme Court decision would need voter approval.

The Supreme Court decision applies only to general law cities, and does not affect communities with city charters, such as Cerritos, Downey, Long Beach, Los Alamitos and Seal Beach.

Here is a breakdown of how local cities are affected:

Artesia gets $200,000 a year from its 2 percent utility tax about 10 percent of its budget. ``It's a lot to us,'' City Manager Paul Phillips said.

Bellflower is faced with the possible loss of $3 million equal to nearly half of its law enforcement budget. Most of that is from a 5 percent utility users tax enacted in 1993.

Hawaiian Gardens gets about $300,000 to $500,000 a year from its 6 percent utility tax, which helps pay for the new city police department and amounts to about 20 percent of its budget, City Clerk Dominic Ruggieri said. Revenues from a new card club could make up for it, Ruggieri said.

Lakewood enacted a 3 percent utility users tax in 1992 that now brings in around $2 million a year, more than 7 percent of its budget.

Los Angeles County lawyers have suggested that October 1995 increases in bed taxes and landfill taxes could be at risk, along with the amusement park tax. They have suggested the board of supervisors impound $6 million received from those sources.

Norwalk passed a 7 percent utility tax in 1992, which, along with another small levy, raises $5 million and provides 20 percent of its budget.

Lakewood Accountability Action Group™ LAAG | www.LAAG.us | Lakewood, CA
A California Non Profit Association | Demanding action and accountability from local government™

click here to receive LAAG posts by email