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VIEWPOINT

YES on Utility User Tax Measure

October 2007

Taxes are never popular. But a reasonable level of taxation is necessary to generate the revenues that pay for Emeryville’s police and fire departments, streets and roads improvements, Child Care, Senior and Recreation Centers, parks, and the many other vital city services that we all enjoy.

It is with that in mind that we endorse the Utility User Tax Measure that will appear on the November 6th ballot in Emeryville.

Utilities in Emeryville are taxed at a 5.5% rate. The rate was originally 3.5% and then raised by the City Council in two separate steps to 4.5% and then to the current 5.5%. Neither of the two increases was subject to voter approval. Several statewide ballot measures and court decisions have cast a legal cloud over the increased rates. The City Council voted to place this measure on the ballot in order to ensure the legality of the rate increases and to protect them from possible future legal challenges.

It is these last two increases -- not the base tax itself -- that is the subject of the November ballot measure. The UUT raises a significant amount of money for the City, approximately $2.4 million annually; the difference between the 3.5% rate and 5.5% rate is about $1 million. Failure to approve the ballot measure will result in a loss to the City’s General Fund of about $1 million annually, maybe not much for a large city, but a significant hit to a small city like Emeryville. We agree with the City staff report that states if the utility tax reverts to the 3.5% rate, the resulting $1 million General Fund revenue loss will directly impact the ability of the City to provide a base level of services we have come to expect.

We do have one concern about the Utility Users Tax. The measure expands the application of the tax to some newer technologies not in existence when the tax was first enacted. While not an increase in the tax rate, this is an expansion of the tax that will result in some increased taxes being paid by Emeryville residents and businesses, a fact that was not as clearly explained and presented to the voters as it could have been.

Taxes are never fun, and no one likes to pay them. But in our view is that there too much at stake not approve the Utility User Measure. There is a direct link between the quality of life we enjoy and the City’s ability to be able to pay for those services. We accordingly urge all Emeryville voters to vote ‘yes’ on the Utility User Tax Measure on the November ballot.