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Smart Voter
Alameda County, CA November 2, 2010 Election
Measure W
Telephone access line tax
City of Oakland

Majority Approval Required

Fail: 45732 / 43.94% Yes votes ...... 58349 / 56.06% No votes

See Also: Index of all Measures

Results as of Jan 6 2:56pm, 100.00% of Precincts Reporting (254/254)
Information shown below: Summary | Fiscal Impact | Yes/No Meaning | Impartial Analysis | Arguments | Full Text

To support vital city services including public safety, library services, and parks and recreation, shall the Oakland Municipal Code be amended to establish a telephone "access line" tax at a rate of $1.99 per month per access line and $13 per month per "trunk line" with all proceeds placed in the City's General Fund subject to annual audits?

Summary Prepared by s/John Russo, City Attorney:
This proposed ordinance would amend the Oakland Municipal Code to establish a new Telephone Access Line Tax at a rate of $1.99 per month per "access line" and $13 per month per "trunk line." The $1.99 tax per month per "access line" applies to basic residential and business services, as well as to mobile telephones. The $13 tax per month per "trunk line" applies to telephone lines connecting two telephone exchanges directly. Neither tax would apply to eligible low-income residential customers or to those customers where application of the tax would violate state and/or federal law.

The revenue from the tax will be deposited in the City's General Fund and can to be used for any municipal governmental purpose.

This measure must be approved by a majority of the voters who cast ballots (50% plus one).

Fiscal Impact from s/Courtney A. Ruby, CPA, CFE City Auditor:
Measure W establishes a new monthly tax per telephone line in the City of Oakland. The two types of telephone lines are access lines and trunk lines, each subject to a different tax rate.

1. Access lines include, but are not limited to, connections providing basic residential and business telephone services, including mobile telephone services subscribed to within the City of Oakland. Each access line would be assessed a monthly flat rate of $1.99 per line.

2. Trunk lines are lines between telephone service suppliers' switching devices and the private branch exchanges or automatic call distributing systems, or other similar devices, at telephone subscribers' locations. Each trunk line would be assessed a monthly flat rate of $13.00 per line.

The proposed tax, called the Telephone Access Line Tax, would appear separately on the subscriber's telephone bill. All tax proceeds would be placed in the General Purpose Fund. This fund is used to pay for City services such as public safety, libraries, parks and recreation. If this measure is approved by a majority of voters, the tax will be charged to subscribers beginning April 1, 2011.

FINANCIAL IMPACT

The City estimated the following annual revenue would be generated if this measure is approved:

Estimated Number of Lines Rate Monthly Revenue Annual Revenue
Residential Telephone Access Line 312,124 $1.99 $621,127 $7,453,524
Commercial Telephone Access Line 32,165 $1.99 $64,008 $768,096
Trunk Line 337 $13.00 $4,381 $52,572
Total $8,274,192

City staff only estimated the number of landline and mobile telephone connections in its revenue projection. This measure allows the tax rates to increase annually based on changes in the Consumer Price Index (CPI) for the San Francisco Bay Area. Rate increases cannot exceed five percent for any one year.

Based on our analysis of the data provided by City staff, the projected annual revenues from collection of the Telephone Access Line Tax appear to be reasonable. We relied on the best available data at this time, however actual results may vary from estimates above.

Meaning of Voting Yes/No
A YES vote on this measure means:
A "yes" vote for Measure W will approve the Telephone Access Line Tax described above.

A NO vote on this measure means:
A "no" vote will reject the Telephone Access Line Tax.

Impartial Analysis from s/John Russo, City Attorney
If approved by a majority of voters, Measure W would authorize a Telephone Access Line Tax to be levied within the City of Oakland. The City does not currently impose a telephone access line tax on telephone lines of any kind.

The amount of the tax would be one dollar and ninety-nine cents ($1.99) per month per "access line," and thirteen dollars ($13) per month per "trunk line." The $1.99 tax per month per "access line" applies to basic residential and business services, as well as to mobile telephones. The $13 per month per "trunk line" applies to telephone lines between a telephone company's switching or distribution system and the customer's switching or distributing system, which in turn branches-out to phones located within the customer's own network.

The tax would not apply to low-income "Lifeline Service" customers of service suppliers. Nor would it apply where application of the tax would violate state and/or federal law.

If approved, the tax would be effective ten (10) days after the vote is declared by the City Council.

The tax would be a "general tax," meaning that the revenue raised from the tax would be deposited into the City's General Fund and may be used for any municipal governmental purpose. Municipal governmental purposes include, but are not limited to, police and fire protection, emergency responses, street repair and maintenance, library facilities, parks and recreation services and other governmental functions and services.

State law authorizes the City of Oakland to levy this tax following approval by a majority of the City Council (5 affirmative votes) and a majority of voters voting in an election on that issue. The Oakland City Council approved this tax on July 26, 2010.

  Official Information

N.B. This is not an official version of the measure. For the official wording contact the Registrar of Voters or the district sponsoring the measure.
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Arguments For Measure W Arguments Against Measure W
Measure W is a broad-based and low-cost solution to preserving some of our vital public services.

Measure W would support 911 services as well as other critical City of Oakland programs such as parks, libraries, and senior centers. Measure W would raise about $8 million annually.

This Measure would help protect essential City services from new cuts during the City's fiscal emergency due to the unforeseen global and national economic recession. The City has already made major spending reductions: programs and services have been cut; many hundreds have been laid off; and remaining employees have taken significant reductions in salary and benefits.

Lifeline and pre-paid calling card customers would be exempt from paying any new taxes under this Measure. An annual independent audit of all Measure W funds would be required.

Measure W is supported by a broad coalition of Oaklanders committed to providing vital public services to Oakland residents.

s/Fr. Jesus Nieto-Ruiz
Co-Chair Oakland community Organizations (OCO)
s/Vien Truong
Vice-Chair, Planning Commission
s/Kimberly Mayfield Lynch
Professor Holy Names University
s/George McDaniel Jr.
Independent Consultant
s/Barry Pilger
Oakland Business Owner

Rebuttal to Arguments For
A "Phone Tax" - What's next, a Dog Walking Tax or a Jog Around The Lake Tax? The proponents of this abusive phone tax call it a low cost solution. Don't be fooled, it is neither low cost nor a solution.

The Cost $2.00 ($1.99) per phone, per month. A family with three or four cell phones and a land line will be taxed an additional $100 bucks a year and the $13.00 trunk line monthly tax adds up to an additional $156.00 per year.

Vital Public Services The proponents claim this Phone Tax will support 911 services and preserve other critical public programs. They even have the audacity to name those services as, parks, libraries, and senior centers.

They LIE! As pointed out in the Argument Against (under WARNING) this proposed phone tax is a "General Fund Tax" (Const. Article XIIIC, Section (a) and Section 2(a), (b) ) as opposed to a "Special Tax" requiring a 2/3 vote. Read the Measure, it clearly states, "with all proceeds placed in the General Fund" and "to be expended for general fund purposes".

More likely than not, these funds (TAXES) will go to pay huge City pension debt obligations and escalating Bond debt - NOT vital services as the proponents and the City so deviously claim.

We control the purse strings - the only way we can STOP the runaway spending is to STOP the runaway taxation - Vote NO! on MEASURE W.

s/David E. Mix
Native Oaklander

TAXES, TAXES, TAXES, and more TAXES The City of Oakland, the City Council, the City Administrator,and its totally inept oversize bureaucracy doesn't have a clue. They blame the Police Department, the Fire Department, the Unions, and the Employee's Pension System. And, if we don't approve these "TAX" Measures - they will blame us.

They blame everyone but themselves - the ones who directly created the mess we are now in. Oakland now has an annual (all funds) budget of One Billion Dollars ($1,000,000,000). It is exceedingly apparent the City is not bashful about spending money. It is also very clear that they have absolutely no concept of how to run a City.

IT IS TIME TO STOP! STOP blaming Proposition 13 (that was over 30 years ago). STOP blaming the economy - by the City's own records the revenue decline is only $69 mil. while their budget short-fall amounts to more than $272 mil.

Clearly, the City has spent far more money than can be blamed on the "economic down-turn". Over the past several years it has robed Peter to pay Paul, created an enormous "bond debt", squandered redevelopment funds and engaged in numerous other shaky financial deals.

Regrettably, the City is so deep in debt that even if all of their proposed tax measures pass, it will not be enough. It will only prolong their problem for eighteen months to two years at best, at which time they will be back for more money - more taxes - it is inevitable.

WARNING -This "Phone Tax" only requires a simple majority vote because the proceeds go to the "general fund" (to be lost forever) and not specifically for the particular "vital" services that the City implies.

VOTE NO! on the Telephone Tax

s/David E. Mix
Native Oaklander
s/Ken Pratt
Neighborhood Activist

Rebuttal to Arguments Against
A YES vote on Measure W will help protect Oakland's 911 response, police and fire services, and other vital Oakland institutions such as parks, libraries and senior centers.

Measure W is a low-cost and broad-based effort to help respond to the economic crisis we all face.

Measure W includes exemptions for lifeline, low income and pre-paid calling card customers.

The national recession has caused a major decline in City revenues.

Before going to the voters, the City cut everything possible: spending was reduced over 20%; staff was cut; hundreds were laid off; remaining staff took major pay and benefit reductions.

Measure W includes accountability requirements with required annual independent audits and a public oversight committee.

Measure W is supported by Oakland's firefighters, police officers and many neighborhood and community organizations. The global recession has hurt all of us. Measure W asks our community to invest less than $2 a month to help fund vital city services.

Please vote YES on Measure W.

s/Fr. Jesus Nieto-Ruiz
Co-Chair Oakland community Organizations (OCO)
s/Gerald Simon
Fire Chief
s/Susan Montauk
Chair of Oakland's Parks Coalition
s/Doug Boxer
Attorney

Full Text of Measure W
WHEREAS, numerous cities in the Bay Area impose a telephone access line tax and;

WHEREAS, the City of Oakland ("City") is facing a rising deficit as a consequence of the severe economic crisis and;

WHEREAS, the City has made significant cuts to the budget, including, but not limited to, laying off employees and reducing staff salaries and;

WHEREAS, the Oakland City Council ("City Council") would like to ensure that the City has the financial resources necessary to preserve the public health, safety, and welfare of the City and;

WHEREAS, in light of the deficit and the City's desire to continue to provide a wide array of City services including but not limited to park, library and public safety services and to maintain the City's infrastructure (e.g. sidewalks, streets, and public facilities), the City Council determines that it is in the best interest of the City to submit a telephone access line tax to the voters and;

WHEREAS, the City will deposit all revenues it receives from the tax in the general fund of the City to be expended for general fund purposes and;

WHEREAS, at the general election of November 2, 1996, the voters of the State of California amended the state constitution, adding Article XIII C, which requires that the voters approve all new taxes and tax increases before they become effective and;

WHEREAS, the voters' approval of the Telephone Access Line Tax will impose or increase general taxes, as that term is defined in Article XIIIC, section 1(a) of the California Constitution; and now, therefore, be it

RESOLVED, that the City Council does hereby submit to the voters at the statewide general election, not more than 88 days and not more than 150 days from the date of passage of this resolution, the text of the proposed ordinance, which shall read as follows:

Section 1. The Municipal Code is hereby amended
to add the sections as set forth below.

Section 2. Code Amendment. The Oakland Municipal
Code is hereby amended to include Chapter 4.29 to read as follows:

4.29. Telephone Access Line Tax

A. This ordinance shall be known as the Oakland Telephone Access Line Tax Ordinance.
B. Definitions. For the purpose of this Section, certain words and phrases are defined and certain provisions shall be construed as herein set out, unless it shall be apparent from the context that they have a different meaning:

"Access line" means any connection from a customer within the geographic boundaries of the City of Oakland to a supplier of telephone service offered to the public for compensation. "Access line" includes, but is not limited to, connections providing residential basic exchange service, business basic exchange service, PBX service (private branch exchange), foreign exchange service, and Centrex service. "Access line" also includes a connection from a single mobile telephone to a commercial mobile radio service, as defined in Section 20.3 of Title 47 of the Code of Federal Regulations as this section existed on October 1, 2002, which has as its place of primary use, as defined in the Mobile Telecommunications Sourcing Act, 4 U.S.C. Section 124(8), a location within the City of Oakland.

"Lifeline service" means discounted telephone service available to eligible low-income residential customers.

"Post-paid calling service" means the telecommunications service obtained by making a payment on a call-by-call basis either through the use of a credit card or payment mechanism such as a bank card, travel card, credit card, or debit card, or by charge made to a telephone number which is not associated with the origination or termination of the telecommunications service without the provisioning of an access line.

"Prepaid calling service" means the right to access telephone communications service, which must be paid for in advance and which enables the origination of calls using an access number or authorization code, whether manually or electronically dialed, and that is sold in predetermined units or dollars of which the number declines with use in a known amount, without the provisioning of an access line.

"Service supplier" means any person supplying a telephone access line to any telephone communications service subscriber at a location within the City of Oakland. Service suppliers may include, without limitation, local exchange carriers, inter-exchange carriers, competitive access providers, cable television providers offering telecommunications services, suppliers of wireless telephone service, and any other entity offering direct connections between their premises and the premises of telephone communications service subscribers.

"Telephone corporation" shall have the same meaning as defined in Section 234 of the Public Utilities Code of the State of California, or the most comparable successor definition. It also includes any person providing wireless telephone service to any telephone communications service subscriber.

"Telephone service" means access to a telephone system, providing two-way telephonic quality communication with substantially all persons having telephone or radio telephone stations constituting a part of such telephone system, whether or not such service uses transmission wires. For the purposes of the tax imposed by this Article, a person shall be construed to subscribe to "telephone service" within the City of Oakland if he or she has a "place of primary use" as such term is defined in the Mobile Telecommunications Sourcing Act, 4 U.S.C. Sec the City of Oakland. "Telephone service" does not include any system that is expressly excluded from the definition of "access line" or "trunk line."

"Telephone communications service subscriber" means any person who receives telephone service or its function.

"Trunk line" means a line between a service supplier's switching device and a private branch exchange or automatic call distributing system, or other similar device, at a telephone subscriber location.


C. There is hereby imposed a tax on every person who subscribes to telephone services within the City of Oaklandto the extent permitted by Federal and State law. The tax shall apply to each access line within the City's tax jurisdiction, including, without limitation, access lines billed to a telephone account having a situs in the City, as permitted by the Mobile Telecommunications Sourcing Act, 4 U.S.C. 116 et seq. There is a rebuttable presumption that service billed to a billing address or provided to a service address in the City is used, in whole or part, within the City's boundaries and that such service is subject to taxation under this Article.


D. The amount of the tax imposed shall be one dollar and ninety-nine cents ($1.99) per month per access line, and thirteen dollars ($13) per month per trunk line.

The tax imposed by this chapter shall be paid, on a per line basis, by the person paying for such telephone service.

Only one payment of the tax herein imposed shall be required for any single access line or trunk line, notwithstanding that access lines of more than one telephone corporation are used in furnishing telephone communications service to a telephone communications service subscriber.

Beginning in Fiscal Year 2011-2012, and every fiscal year thereafter, the City shall increase the tax imposed based on the change in the San Francisco Consumer Price Index (CPI) for all Urban Consumer for all items in the San Francisco Bay Area as published by the U.S. Department of Labor Statistics, as reported by the City Administrator at a City Council meeting, unless the City Council adopts a resolution rejecting the increase within 60 calendar days. To determine whether the CPI has increased, the City Administrator, at her or his discretion, may use the CPI for the prior calendar year, or for another recent 12-month period as the index year. In no event shall any adjustment exceed five percent (5%) for any one year.

E. The tax imposed by this Chapter shall be collected from the telephone communications service subscriber by the service supplier.

The tax required to be collected by service suppliers under this ordinance shall be added to and stated separately in the service supplier's billings to telephone communications service subscribers. The charge in such billings shall include only the amount authorized by this Chapter, and shall not include any additional charges or fees which may be imposed by the service supplier to recover the cost of collecting the tax.

Nothing in this Chapter is intended to regulate the ability of a service supplier to recover any costs of collecting the tax imposed under this Chapter, to the extent that recovery may be authorized by state or federal law.

Except as otherwise stated in this Chapter, the tax imposed by this Chapter shall be collected and remitted at the same time as and in the same manner as the tax imposed by Section 30 of Chapter
4.28 of the Oakland Municipal Code.

F. The following are exempt from this tax:

  1. Lifeline service customers of service suppliers;
  2. Service suppliers;
  3. Coin-operated telephones;
  4. Prepaid calling services or post-paid calling services;
  5. Any person when imposition of such tax upon that person would violate the Constitution of the United States or that of the State of California or preemptive federal or state law; and
  6. City of Oakland, County of Alameda, Oakland Unified School District, State of California and United States Government offices.

G. Annual Audit.

An independent audit shall be performed to assure accountability and the proper disbursement of the proceeds of this tax.


Section 3. Severability. If a court of competent jurisdiction determines that any provision of this Ordinance, or its application to any person or circumstance is unlawful, unenforceable or otherwise void, that determination shall have no effect on any other provision of this Ordinance or the application of this Ordinance to any other person and circumstance and, to that end, the provisions hereof are severable.


Section 4. California Environmental Quality Act Requirements. This Ordinance is exempt from the California Environmental Quality Act, Public Resources Code section 21000 et seq., including without limitation Public Resources Code section 21065, CEQA Guidelines 15378(b)(4) and 15061(b)(3), as it can be seen with certainty that there is no possibility that the activity authorized herein may have a significant effect on the environment.


Section 5. Majority Approval; Effective Date. This Ordinance shall be effective only if approved by a majority of the voters voting thereon and after the vote is declared by the City Council. The effective date of this Ordinance shall be ten (10) days after the vote is declared by the City Council.


Section 6. Council Amendments. The City Council is hereby authorized to amend Chapter 4.29 of the Oakland Municipal Code as adopted by this Ordinance in any manner that does not increase the tax rate, or otherwise constitute a tax increase for which voter approval is required by Article XIII C of the California Constitution.


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Created: January 6, 2011 14:57 PST
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