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Concerned Taxpayers Speak Out Against Measure U

 

 

By John and Maureen Kocourek

10/27/09

 

There was no argument against Measure U on the Voter Information Pamphlet that came with our ballot, and we noticed that the city actually cheated by spending $20K on a glossy flyer.  Somebody has to give an argument against, so here's my argument against Measure U, in table form, responding to the City Q & A.


Click HERE for a printable flyer opposing Measure U


In its Q & A, the City says:

A Concerned Taxpayer Says:

Due to a recent court ruling and new federal regulations, the City of Vallejo must update and modernize only the telecommunication and video services portion of our UUT ordinance, to fully comply with current federal law.

The court ruling says the UUT is a tax and as such must be approved by the voters. In its existing form, the tax is no longer legal. This "modernizing" ploy will allow the tax to be approved by a simple majority.

Approximately 150 California cities use UUT funds to protect and maintain local community services.

In Solano County, only Vallejo, Benicia, and Fairfield have a UUT
Vacaville, Suisun, Dixon, Rio Vista DO NOT have a UUT

 

Communication advances over the past two decades mean that the City must update the telecommunication and video components of the UUT ordinance to match today’s technology, including definitions for new communications technology. To do so, the state’s Constitution requires voter approval. Voter approval of an updated ordinance avoids the lawsuits some cities have faced that have jeopardized funding for City services.

The tax was NEVER approved by voters, as required by the State Constitution.

Without voter approval, this entire tax can be blown out of the water.

Updating the ordinance will slightly decrease the existing tax rate on telecommunication and video services, and will ensure that all residents are treated equally, regardless of the type of telecommunication or video services they use now, or in the future.

This will add new taxes on some services such as paging, texting, and pay-per-view TV programming, meaning residents may end up paying more than they are paying now. Total tax revenue will increase.

Measure U will reduce the tax on telecommunication and video services from the existing 7.5% tax rate to 7.3%, to ensure that the Measure is revenue neutral. The Measure will clarify what can and cannot be taxed, close unintended loopholes, and ensure that users of similar services or equipment are treated the same.

The City's wording is dishonest. They say it's a tax reduction, but it could be a much bigger tax reduction if it fails. A NO vote is a vote for the complete disapproval of the tax in its current form, allowing it to be challenged by taxpayer groups.

Measure U will change the rate from 7.5 % to 7.3%, while all other Solano county cities charge less.

Vacaville - zero UUT
Dixon - zero UUT
Rio Vista - zero UUT
Suisun - zero UUT
Benicia: 3.5 to 4%
Fairfield: 2 %
Vallejo: 7.5% (7.3% with Measure U)

Private communication services (e.g., T-1 business lines), paging, and IP-TV (cable-like services using internet protocol) will be included in the new ordinance. The new definitions will clarify that VoIP and text messaging are also included.

By taxing new categories of services, the new UUT will bring in more taxes than the existing one, i.e. it will be a new tax and increase the total tax burden for some users

What happens if you don’t update your UUT?
A: The existing 7.5% tax on telecommunication and video services will continue, instead of the 7.3% tax. People who use different technologies will continue to be taxed differently. If the 40-year old ordinance is successfully challenged in court or threatened by Federal legislation, Vallejo could loose up to $5.2 million in annual revenue. The economic recession and the state budget crisis have already put City service levels and property values at risk. If we were to loose $5.2 million in annual revenue, Vallejo may have to cut more police officer positions in addition to the more than 40 positions that have been cut since last year, or close more fire stations. Maintaining our local UUT is one way that we can continue to stabilize Vallejo’s financial situation and our property values.

City Hall has failed to properly manage the taxes we have been paying, resulting in deficit spending. They have spent more than they received

By voting NO on this UUT, it sends the message that city council must rethink all of the old spending habits.

What community services does the UUT fund?
A: Vallejo’s UUT pays for many critical City services. The UUT provides Vallejo with a protected and reliable local revenue source to help maintain police, fire, 9-1-1 emergency response and other essential local services.

It's a safe bet that the UUT will be used to pay salary increases for some city employees.

How do we know that funds would be spent responsibly?
A: Measure U will continue to ensure our local control over the current funding generated by this tax, and will include strong fiscal accountability protections such as requiring an annual independent City audit. All funds must be spent on City services, and any rate increases would require voter approval.

The budget already gets an audit. And funds have not been spent "responsibly". Vallejo owes a QUARTER OF A BILLION DOLLARS for unfunded retirement and health care benefits for city employees.

Looks like they're already thinking about "rate increases"

Comments
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Anonymous   |October.29.2009
JD

There is zero risk that UUT tax revenue will decrease between now and june
JD Miller   |October.29.2009
OOOPS!

It's John and Maureen who put this great post together, not Bill.

Sorry that I tried to pass the credit on to someone else.
JD Miller   |October.29.2009
Well presented, Bill.

While defeat of this tax measure will present a risk that City revenue will decrease, it could also put pressure on the Council to change how they spend our money, the taxes they collect from us.

John Osborne has been advocating that the City adhere to the requirements of our City Charter.

The Charter requires the City to develop and follow a 5 year strategic spending plan.

Besides being required, by our Charter, it's just good business practice.

Had the City been following a 5 year strategic spending plan, it's very unlikely that the City would have ended up in
bankruptcy or with a quarter of a billion dollars in retiree retirement and health insurance costs that there is no money to pay for.
Captain   |October.29.2009
"Beilke (SGV Council member) said he wants to eventually do away with this tax by lowering it by half a percent every other year.

"I thinkk voters will rally to protect this revenue and work on a constructive plan to phase this (tax) out." he said. "It needs to be done.""

The Howard Jarvis taxpayers Association also offers an opinion on the UUT. It's a good article.

http://www.sgvtribune.com/rds_search/ci_13492376?IADID=Search-www.sgvtribune.com-www.sgvtribune.com
Mr. :(   |October.28.2009
Off topic post: Prichard Al. declared Chapter 9 Bankruptcy today. They evidently stopped paying all pensions last week, although the funding problem seems to have been recurring since their first Ch. 9 filing in 1999.
VallejoGuy   |October.28.2009
Agreed. I'm perfectly fine with taking the city budget down to bare bones, and then voting to pay for the services we want moving forward.
Anonymous   |October.28.2009
"Is it seriously not there just because nobody bothered to write one (before the deadline)?!"

Bond and Tax initiatives rarely pass so every trick possible is being used to get this to pass.

"sealing the fate of local government as we know it in that pretty much all services will go away."

I doubt it but it may mean cuts will have to come from the pensioners (who provide no services), and police/fire.

If this passes taxpayers will not be able to use tax increases as a bargaining chip. Trying to solve the problem piece meal, and by starting with revenue increases does not
seem like it will go anywhere. They will just come back in 6 months and say what is another $100 per household, sure you can do another $100?
VallejoGuy   |October.28.2009
So exactly why is there not an argument against Measure U published in the sample ballot?

Is it seriously not there just because nobody bothered to write one (before the deadline)?!
armyoftherich   |October.28.2009
This is one I'm really torn about. If I vote yes, it is because I am co-dependant, and believe, against all reason and rational thought, that local government leaders will change and use it wisely. If I vote no, it will be pretty much sealing the fate of local government as we know it in that pretty much all services will go away. It's a lot like enabling a dysfunctional family member: giving them money and hope this one time they'll spend it wisely... but is this really the time when they'll do it?
John K   |October.28.2009
ANONYMOUS: I missed the deadline with the registrar for the opposing argument, and was surprised to see that no one else had written one. I know it's not "PC" to stand opposed to the UUT and my wording is amateurish and could use a lot of improvement, but so could the city hype, which I thought was plainly dishonest. I agree with you that most seniors will probably not be affected by the the new tax, except for the ones who might be using some of the new TV programming technologies, like pay per view. That will cost an extra 7.3%. Most won't use text messaging, but some seniors
might want to "text" with their grand children and that will cost an extra 7.3% per message. Anything else "new" will cost an extra 7.3%. We heard that in the Marina Tower, most people rely heavily on cable TV for access to the outside world, and the cable franchise fee was recently voted to be the maximum allowable, and this will be passed on to them as well as the rest of us. Measure U was an opportunity for an honest decrease (not 0.2%) in UUT to levels similar to other cities in Solano County, but the city blew it. I respect your fears of the potential for revenue loss,
but I think they are unfounded. Why not do an honest re-write and then bring it around again next year?
carpetbaggerwatch   |October.27.2009
I'm voting against it.Most of it will go to the wrong places.In a sense I would be giving the city a blank check to tax other foms of communication. What will it cost me?...too many unknowns. What I do know about it I don't like.All of it could be used for the upcoming police raises?
good   |October.27.2009
well the article is really very good. i have learn the whole article. its very informative. thanks for sharing.

Keep it up.
Quick Linx
good   |October.27.2009
well the article is really very good. i have learn the whole article. its very informative. thanks for sharing.

Keep it up.

Quick Linx
Miss Directed   |October.27.2009
If this tax isn't going to effect anybody, who's paying the extra $5m that the City is going to collect? How can nobody see an extra outgo if the City is anticipating an extra income? AND even seniors are enjoying technology that wasn't available 30 years ago, so yes, it will effect them as well.

There was a rash of articles before this recession bemoaing the fact government was to fat, now they are slimming down and wouldn't you know - everyone is up in arms about that. If you want to make an omelet etc.

I'm voting no. I'd like to see a tax proposal that is well written and
thought out - I don't believe this is the answer.
Captain   |October.27.2009
DISTO

What a ridiculous argument, and what do out of town landlords have to do with it? The truth is that voting NO on Measure U wont do anything other than keeping the city from raising taxes. The money will still be there - nobody has challenged the UUT. Even if it were challenged, it would take 1-2 years before being removed. There is plenty of time to have this put before the voters in the next election, along with Binding Arbitration.

If you want to provide another vehicle for the city to increases your taxes that's up to you.

This is what will happen if the UUT passes: the
unions will be in the ear of wilson & hannigan asking them to lobby the city, in closed session, to max out every taxable opportunity that the new tax provides for. It wont end up being cost neutral, but the additional revenue will end up on the employees paycheck.

If the UUT fails nothing really changes, and the tax payers maintain the only leverage that they have in this union run city. The money will still flow from the tax payers to the city - to the employees. No one will be laid off because measure U fails. It just wont happen.
Did I Say That Outloud   |October.27.2009
If you think Vallejo is in dire straights now, if this tax doesn't pass, well, kiss everything good-bye. If you think that there are too many out of town landlords now, make sure the tax doesn't pass, Vallejo will implode and the carpetbaggers will snatch up devalued property for pennies on the dollar, and out of town landlords will be the only thing that Vallejo has an upturn in.
I believe it has been stated before: don't cut your nose off to spite your face.
ANONYMOUS   |October.27.2009
JOHN K: can you tell me which of our "tower residents" or "people on broken (fixed) incomes" are going to be affected (increased) by this extension of the UUT. In fact it will save them dollars, as it will be reduced to 7.3%. Now if they have business lines, paging or high tech internet, then those services will be taxed, because they were not available when the original UUT was put in during the early 1970's. Now if they have businesses in the towers or while on their fixed (broken)incomes, then they have not been paying their fair share for these past 30 years. I believe you
are placing false fears in the seniors heads, because you are so upset with public employees salaries, that you can not see the meadow from the forest. I am on a fixed income, not publically earned and would be devastated if this $5 million, that has not had a negative effect on my fellow citizens, would be lost. NOW THEN my fellow seniors would be hurt. Lets be fair with our arguements. If you had wanted to write an opposing arguement for the ballot, you had plenty of opportunity to have done so...but then you would have had to use your real name....Think about it......pc
John K   |October.27.2009
I would be willing to consider a Utility User's Tax if it was worded honestly and if it offered a tax rate comparable to other Solano County cities. Measure U needs to go back to the drawing board and be re-written into a fair tax measure. There is plenty of time to do that before next year's election. It can go right there on the ballot with the Article 809 binding arbitration measure.

As written, Measure U gives us a regressive tax, which is particularly painful for people on fixed (broken) incomes. City Staff had many months to think about this, and at the behest of paid consultants,
they chose to give us this piece of crap. Think of the people living in Vallejo's only skyscraper. The seniors up there in Marina Tower. This tax "modernization" will remove a little more of their spendable income. And for what? To feed an already bankrupt and poorly managed general fund? If not for yourself, then for the seniors and so many other Vallejo residents who try to get by on broken incomes, Vote NO On Measure U.
Captain   |October.27.2009
Measure U - The UUT is not just a restructuring of a current Fee/Tax. Vallejo is calling it a rate reduction (true-kind of) from 7.5% to 7.3%. They did this because that's what the consultants said they need to do to get the voters to vote yes. It actually represents an expansion of communications that can be taxed, and will lead to increased taxes paid by Vallejo Tax Payers (residential & commercial). Don't kid yourself , Vallejo is looking at every possible tax & fee they can think of. If you�ve been watching the council meetings you know what I'm I talking about. The new UUT will allow the
city to extend the 7.3% tax to many communication devices not currently taxed by the city, and also allow the city to tax citizens for technology not yet developed. If it is communications related, you can bet that you will be taxed once it is invented, and you begin using it. They can't do that now.

If the UUT is voted down, the money does NOT disappear. It only means that the 5 million dollar tax benefit to the GF will continue as is, paid by the Vallejo tax payers. The Mayor has commented on this during council meetings. I don't think anybody really thinks the UUT revenue should
disappear, but I do think the proposed ballot measure, Measure U, needs to be restructured to protect the tax payers. If it doesn�t pass, and it shouldn�t, then it can be restructured and voted on in the next election. That�s all that will happen.

Vallejo already pays at least 40% more UUT than any other city in the county. Some cities in the county don't even have a UUT. If the new UUT passes as is, the dollar amount of tax paid by individuals could double.

It�s not surprising that Jon Riley would support Measure U in its present form. It�s quite predictable that anybody representing
City Labor Unions, and all city employees, will be in complete support of �U�. For the Tax Payers: it�s a bad deal. The Tax Rate is slightly reduced but the dollars being removed from your bank account can increase dramatically.

BTW, I support the UUT, just not in its present form, and not the expansion component. It needs to be rewritten and voted on in the next election - hopefully with a sunset clause attached.

Measure U is bad for Tax Payers
Anonymous   |October.27.2009
Well, what does this conversation say about the alleged lockstepping "VIBers"? We don't all agree on Measure U. And unlike the Horrid litterbox, we can be adult about it and not call each others mothers bad names!
I love Vallejo   |October.27.2009
I voted for it. I couldn't see voting against it to create an even worse scenario than we already have.

I have been paying this tax already all along and really will not see any real difference to keep on paying it if it helps us out. Why create more of a problem to overcome?
Firebug   |October.27.2009
avatar I voted NO!
S. Martin   |October.27.2009
I typically agree with most posters on VIB, but not this issue. I'm voting yes. I'll hold my nose while I do it, but I'll do it because I can't see the city finding enough cuts to make up for a $5,000,000 loss.

I understand wanting to stick it to the Council (minus Gomes and Schively) for making bad decisions on the police contract with raises and free benefits. But it will only hurt me and my family more than we're hurting now.
VallejoGuy   |October.27.2009
Vote No on the Utility Tax.

Later we can vote on increasing taxes for specific services.

Forcing drastic cuts to the City now would not be a bad thing. In most dysfunctional situations, things have to get worse before they get better.
Truth Teller   |October.27.2009
This is a tax, plain and simple. Re-package it without the misleading decription and put it to the voters. As it stands I will vote against it.

It's going to get worse in this city before it gets better. Until the mayor and council start speaking the truth, they will get beaten.

Sorry to Gomes & Schivley, you are the exceptions.
Anonymous   |October.27.2009
Go and cut off your nose to spite your face if you stand in principle here and vote no. Watch the city completely implode. You think the cuts have been bad so far? Ha!

I don't agree with what's happened regarding salaries, raises and retirement windfalls. But now is not the time to lose more revenue. The city is barely staying afloat as it is.
Captain   |October.27.2009
The last three Q&A's in the city's argument are very misleading and completely offensive, as I'm sure the city's educational meetings/snow jobs are.

Good work providing the "Concerned Taxpayer" argument against. Any chance you can get this into the Times Herald?
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