Pass: 2,091 / 76.5% Yes votes ...... 643 / 23.5% No votes

See Also: Index of all Measures

Impartial Analysis from Stephen P. Deitsch, City Attorney

Measure “A”, is submitted to the voters by the Arcadia City Council to clarify and update the City’s current Utility Users Tax (“UUT”) Ordinance, so that it can be applied equally both to older telephone technology and to newer telecommunications technology at the current tax rate of 5%.

Background:

Residents of Arcadia have paid the UUT on charges for telephone services since 1970. UUT revenues are paid into the City’s General Fund, which is allocated by the City Council through the annual budget for general city services, such as police and fi re protection, paramedic services, library services and recreational programs.

In past years, the City of Arcadia, like most cities with UUT’s, relied upon Federal law to determine which telephone services were taxable and which were not. Therefore, references to the Federal law were included in their local ordinances. However, telephone technology has changed greatly since 1970, and is expected to continue changing at a rapid pace. As a result, certain references to Federal law in the City’s UUT ordinance, as well as other terms and defi nitions in the ordinance, have become outdated and unable to address modern technologies.

The Measure:

Measure “A” would adopt an ordinance to remove outdated references to Federal law from the UUT ordinance. The measure would also replace older terms and defi nitions with modern language to address new technologies and to treat all telephone customers the same for local tax purposes, whether they use traditional land-line service, cellular/wireless service, or cutting edge services such as Internet phone or text messaging. The measure would also provide language intended to address forms of telephone service that have yet to be invented, to ensure equal taxation in the future.

Measure “A” maintains the tax rate for the UUT at the current amount of 5% for all telephone services regardless of the technology used. The City Council can lower the telephone tax rate, but may not raise it without voter approval.

Measure “A” maintains existing exemptions for low-income and disabled residents and, in fact, updates the low-income exemption to incorporate modern defi nitions and standards. The Council may expand these exemptions, but may not reduce them without voter approval.

Measure “A” requires approval of a majority of voters. A “yes” vote for Measure “A” will approve the updates described above; a “no” vote against Measure “A” will leave in place the City’s existing Utility Users Tax Ordinance without the above-described updates.

City of Arcadia

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