Proposition H, the city’s telecommunications utility tax, failed to gain the approval of voters in Tuesday’s election.
The measure sought to modernize 40-year-old language that levied fees on communications equipment such as telephones.
If the measure had passed items such as cell phones and Internet use would have been assessed.
The mayor, city staff and other proponents of the measure agreed this was an item voters would have difficulty understanding.
On several occasions at budget meetings, city staff explained that the measure was not a tax increase.
“I am disappointed Prop. H failed, but the voters spoke and the city’s leadership will make the decisions necessary to balance the budget for next fiscal year,” Chula Vista Mayor Cheryl Cox said.
Chula Vista City Manager Jim Sandoval said staff will begin enacting some of the reductions discussed during City Council meetings and public hearings.
“I’ll be doing work with our department heads over the next couple of weeks to determine the least impactful way to do that to our community,” he said. “My goal would be to implement those service reductions in January.”
Cuts to public services total roughly $6 million and include severe layoffs to the fire and police departments and reductions or the elimination of libraries, park and recreation centers.
Sandoval said if it comes to closing facilities or reducing hours he wants to get the information posted as soon as possible so citizens become familiar with the fact that things will be changing.
The city manager said he had no idea how the vote would turn out.
“I do not think people really understood what the proposition meant,” he said.
“There was a lot of people saying it was a new tax – it clearly wasn’t and I think a lot of people didn’t realize that we’ve been collecting it for 40 years and what the impacts would be on city services.”
He added:
“That’s the thing that troubles me the most – that people make their decisions without a clear understanding.”
In early October, the San Diego County Taxpayer’s Association urged Chula Vista to get their fiscal house in order and pursue long-term reforms.
Association president and CEO Lani Lutar said the city has repeatedly failed to demonstrate sufficient fiscal responsibility to request additional revenue from taxpayers.
“The San Diego County Taxpayers Association calls for substantive, comprehensive reform before increasing taxes,” Lutar said at the time. “Instead of trying for a second time to convince Chula Vista voters to increase taxes, all city employees should be asked to contribute a fair share to their own pensions.
“The city should make every effort to reduce labor costs, streamline operations and demonstrate fiscal responsibility before asking taxpayers to hand over another dime of their money,” Lutar said.
CEO of the Chula Vista Chamber of Commerce Lisa Cohen said she stands by the Chamber’s decision to support Prop. H.
However, Cohen said the residents of Chula have spoken with their vote. “We’re here to work with our community and help them find financial solutions,” she said.
The CEO of South San Diego Chamber of Commerce, Ed Herrera, said the proposition was about a regressive tax that would have burdened small businesses and hurt small families.
Herrera said it should never have been a tax to begin with.
“I think Chula Vista has spoken once more that taxes are not the solutions,” he said.
“Now is the time for our leaders to lead and our communities to come together,” he said.
“If the direction of the council and elected officials continues to put revenue before reform and see out measures on ordinances that we depend on I think we will see a city fall apart.”
Herrera said what brings people to a community is a vibrant community bolstered with jobs and opportunity. “But when you’re adding taxes, you’re impoverishing them and adding a roadblock for future investments.”
“I really believe now that Prop. H has failed, we have an incentive for clean tech and telecommunications companies to move to Chula Vista.” Herrera said.
