Pass: 3,119 / 67.61% Yes votes ...... 1,494 / 32.39% No votes

See Also: Index of all Measures

Impartial Analysis from City Attorney Arnold M. Alvarez-Glasman

Measure TR is submitted to the voters by the Pico Rivera City Council in order to decrease the current Utility Users Tax (“UUT”) from 5% to 4.5% and to clarify and update the UUT Ordinance, so that the Ordinance can be applied equally to new telecommunications technology and older telephone technology.

Background:

Currently the UUT of the City of Pico Rivera is set at 5%. This Measure will provide an across-the-board reduction in all UUT charges down to 4.5%.

Residents of Pico Rivera have paid the UUT on charges for telephone communication services, video services, and gas and electricity usage. UUT revenues are paid into the City’s General Fund, which funds general city services, such as police and fire protection, library services, parks and recreational programs. The City’s UUT currently generates about 4 million for the General Fund, of which about 2 million is derived from taxable telecommunication services.

In past years, the City of Pico Rivera, like most cities with UUT ordinances, referenced Federal law in its UUT Ordinance to determine which telephone services were taxable and which were not. However, telephone technology has significantly changed since the City’s adoption of the current UUT Ordinance. As a result, certain references to Federal law in the City’s UUT ordinance, as well as other terms and definitions in the ordinance, have become outdated and do not address modern technologies.

Some cities have become the target of litigation by telephone service providers due to the reference to Federal law in their UUT ordinances. As a result of these cases, other cities, like Pico Rivera, could be the target of similar litigation. The purpose of this Measure is to keep the City of Pico Rivera from potential litigation and for the City to preserve its existing UUT revenues.

The Measure:

Measure TR is not a tax increase measure, but a tax reduction measure which will reduce the UUT from the current rate of 5% down to 4.5%. Measure TR would adopt an ordinance to remove outdated references to Federal law from the UUT ordinance. The Measure would replace older terms and definitions with modern language to address new technologies and 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 Voice-over Internet Protocol (VoIP) and text messaging.

Measure TR requires approval by a majority of voters. A “YES” vote for Measure TR will approve a tax reduction and provide the update as described above. A “NO” vote against Measure TR will not reduce the UUT and will keep in place the City’s existing UUT Ordinance without the updates described.