Pass: 16,081 / 73.98% Yes votes ...... 5,657 / 26.02% No votes

See Also: Index of all Measures

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 The ordinance is outdated due to significant advances in technology and changes in state and federal law, and the tax is not applied to telecommunication and video services and devices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

San Francisco Chronicle

• Local tax measures on Bay Area ballots - 1/21/08

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:

• police are down 50 officers,
• library hours have not been completely restored,
• fire department can't staff its ladder truck,
• our roads are full of potholes.

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.

Jim Rogers, Councilmember, City of Richmond
Myrtle L. Braxton, Founder, Crime Prevention Program
Andre Hill, Vice President, Richmond Police Officers' Association
Ludmyrna "Myrna" Lopez, Councilmember, City of Richmond
Jim Russey, President, Richmond Firefighters

(No arguments against Measure B were submitted)