LWV League of Women Voters of California
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Monterey County, CA November 5, 2002 Election
Measure O
Reduce and then repeal existing utility users tax
City of Salinas

Initiative amendment to city code

8185 / 33.8% Yes votes ...... 15986 / 66.1% No votes

See Also: Index of all Measures

Results as of Dec 6 2:34am, 100.0% of Precincts Reporting (55/55)
Information shown below: Summary | Arguments |

Shall the ordinance proposing to amend the Salinas City Code to reduce the utility users tax to three percent upon the effective date of the initiative, and then one percent on January 1, 2004, and then repeal the tax on January 1, 2005 be adopted?

Summary Prepared by League of Women Voters of the Salinas Valley:
The Situation: The tax was originally established by a City ordinance on July 28, 1969. The tax was enacted to support General Fund programs and services, including police, fire, recreation, parks, streets, libraries, and the capital improvement program. The tax is paid on cable television, electricity, natural gas, telephone, and water utilities. The initial rate was five (5%) percent with a $500 cap. The cap was increased to $1,500 in 1990- 1991 and to $2,000 in 1994 - 1995. The rate was increased to six (6%) percent in 1994 - 1995. Since its inception, the Utility Users Tax has ranged from 8.4% to 13.6% of the City's General Fund revenue. In the past ten (10) years, the tax has averaged 12.75% of the City's General Fund revenue.

In the last seven (7) years of collections --- since the rate was increased to six (6%) percent --- total collections have increased on the average about $405,800 per year. Most of this increase is due to the growth in the number of homes and businesses paying the tax. Approximately half of the utility tax comes from the tax on PG&E bills and the other half from the tax on telephone, water, and cable television services.

Of the four major General Fund revenue sources of the City of Salinas, only the Utility Tax is returned to Salinas taxpayers in its entirety. The other three are the sales tax, motor vehicle registration fees, and property taxes.

Arguments Submitted to

Summary of Arguments FOR Measure O:
1. The Utility User Tax is an unfair tax since the voters of Salinas never approved it.

2. The repeal of this tax will force city officials to trim excess spending. There is "fat" in the City of Salinas budget that can be cut.

3. Savings to the city budget can be made by:

Freezing city salaries for 30 months.
Reducing wages and benefits of the top city officials and eliminating up to six positions
Deferring $1.5 million per year of maintenance of City properties and facilities

4. We do not need more services in our City, what we need is more efficient use of the money we already pay in taxes and use fees.

5. This tax hurts small businesses where profits are often low and expenses are relatively high.

Summary of Arguments AGAINST Measure O:
1. Hundreds of business owners and the Salinas Chamber of Commerce have joined the Coalition to save this tax which, if repealed, will diminish the quality of life in Salinas. These taxes directly benefit business owners through the provision of safety services and other city services. The City currently spends $431/person per year. The repeal will reduce that figure to $375/person/year, below other cities in the area (Monterey, $1,443; Santa Cruz, $867; Watsonville, $583)

2. City services (police, fire, parks, libraries) are not up to state or national standards for a city of our size. Reductions in services, if this tax is repealed, will put Salinas even farther behind.

3. If City staff or salaries are reduced, services will be reduced. People provide services. With few exceptions, the salary and benefits provided by the City are average or slightly below average for similar size communities in California.

4. Currently City staffing levels are less than average compared to State and National averages for public safety. We already are lean and mean, budget reductions will only serve to erode what our city can provide.

5. The repeal of this tax will result in the elimination or reduction of City programs and services, including maintenance of streets, city facilities, code enforcement, and will negatively affect the quality of life.


September 10. Salinas Rotary Club is
sponsoring a forum, which will be moderated by the League of Women Voters of the Salinas Valley. Phyllis Meurer will be the moderator. The meeting, by invitation only starts at 12 noon at the National Steinbeck Center in Salinas on Tuesday September 10, 2002. For information, contact Eugene Ferris at 521-9717. Speaking in favor of the measure will be Brett Landon. Speaking in opposition will be Don Nucci.

October 8. Oldtown Salinas
Association is sponsoring a forum, which will be moderated by the League of Women Voters of the Salinas Valley. Kalah Bumba will be the moderator. The forum is open to the public in down town Salinas at the National Steinbeck Center (1 Main Street). The meeting starts at 5:30. For information, contact Patti Fashing at 424-6447. Speaking in favor of the measure will be Brett Landon. Speaking in opposition will be Dennis Donohue.
News and Analysis

The Californian

Coast Weekly Monterey County Herald General Links

City of Salinas
Partisan Informatin


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Created: December 6, 2002 03:14 PST
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