Politics & Government

Voters May Get To Decide on City Tax Measure

Los Alamitos officials are considering a update to the telephone tax that could reduces taxes for some while adding taxes for others.

If, after years of studying your cell phone bill, you can’t quite understand the charges, you’re not alone.

City governments have the same problem.

Communications taxes that haven’t kept up with changing technology have created situations where some cell phone users are being overtaxed while others are undertaxed. The situation makes cities legally liable to people who may be overtaxed, and some cities have been sued. The city of Los Alamitos is looking to update it’s tax rate, but it will have to get voter approval to do so. Los Alamitos residents will have to decide in November on a ballot measure to modernize the telephone users tax, a move that could reduce the tax for some and increase it for those who aren’t currently paying it.

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This week, Los Alamitos City Council members debated how to write the ballot’s argument in favor of the measure.

“The carriers are potentially overcharging, and the city is accepting funds we may not be entitled to. That is really what we are trying to fix,” said City Attorney Sandra Levin.

Find out what's happening in Los Alamitos-Seal Beachwith free, real-time updates from Patch.

Roughly 5.5 percent or $639,599 of last year’s city revenue came from the telephone users tax.

City officials are looking at a new ordinance that would possibly reduce the tax by .5 to 1 percent and expand the base by taxing VoIP, broadband, paging and private communication lines (T-10). It would not include a tax on Internet usage. According to a city staff report, voters in other cities have approved similar tax changes 61 out of 64 times.

The challenge for cities is drafting an ordinance broad enough to adapt to the constant technological advances. Should there be a tax if one day soon people are hooking bluetooths to iPads, asked Levin.

“Is that a cell phone? Is it not a cell phone?” she asked.

Councilwoman Gerri Graham-Mejia said she is concerned that the new ordinance could be too broad in taxing new technology and worried that the ballot argument wouldn’t accurately convey to voters that some people who may not be paying the tax currently could soon have to pay it if new technology is added to the telephone users tax.

However, the ballot measure should broadly define communications technology so the city won’t have to try to update the tax again a few years from now in the face of a lawsuit, countered Councilman Warren Kusumoto.

“I don’t know how we not make this as simple as we can,” he said.

One resident at Monday’s council meeting spoke out in favor of putting the measure to voters.

“I am in support of giving the community the opportunity to make the decision,” said Los Alamitos resident Dean Gross.


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