At a meeting Monday night at the Chula Vista Civic Center Library, Chula Vista City Manager Jim Sandoval discussed Proposition H, a utility tax ordinance that proposes new definitions to create an even level for the industry and provide transparency for ratepayers.
The city of Chula Vista is proposing the measure on the Nov. 2 ballot, which if approved would affect five percent of customers who use cable-based phone services who do not pay the telecommunications user's tax on out-of-state landline calls. Cell phone users already pay the tax.
The proposed model ordinance was negotiated with the industry at the state level prior to the first group of California cities adopting the ordinance in 2006. Updating the code would permit the city to verify that the current taxes collected from Chula Vista ratepayers are reinvested in Chula Vista.
Voting yes on Prop. H would protect $6.3 million in utility users tax and is one component of the city's fiscal health plan to help increase revenues. To date, the city has cut $40 million from the budget and eliminated nearly 250 positions.
In order to balance the budget, $12.5 million must be cut by July 2011.
Chula Vista Mayor Cheryl Cox said Prop. H is about continuing to fund the services Chula Vista residents benefit from, including maintaining the streets, parks, libraries, and police and fire protection. Without revenues from Prop. H, she said $6 million in revenues would be cut each year from the city's general fund.
"What we're trying to communicate is the residents can make the choice," Sandoval said.
Members of the Chula Vista Civic Association are against the tax increase saying the language is misleading and would place Chula Vista at a competitive economic disadvantage while budgetary and spending reforms remain undone.
Last year, Chula Vista voters said no to new taxes when the city of Chula Vista held a special election May 5.
Sandoval said the UUT is a protective measure.
"I really didn't want to follow up with another sales tax," Sandoval said. "We've already cut $40 million. The idea is to come out revenue-neutral."
In an earlier version of this story, Eastlake resident Stewart Payne was incorrectly quoted as saying a municipal tax had expired seven years ago. Payne did not make that statement.
Payne was also quoted as saying the city council needs to raise revenue. Payne was referring to the creation of a sports commission as a means to generating revenue, not the passage of Prop. H.
The Star-News regrets the errors.