Questions and answers about Measure D What does Measure D do? It simply continues the telephone portion of Pasadena's forty-year-old utility user's tax (UUT) -- with NO increase in tax rate. What is a utility users tax (UUT)? A UUT is a tax levied by most California cities on certain utility bills. Since 1969 Pasadena residents have paid UUT on electricity, natural gas, water, cable television and telephone services. Does every resident pay the UUT? No. Low-income senior citizens and disabled residents are exempt from the UUT, and will continue to be exempt if Measure D passes. There is a simple application process to claim the exemption. Does Measure D affect the UUT on all these utilities? No. Measure D renews and updates only the UUT on telephone service. Why is the telephone UUT suddenly an issue now, after 40 years? Most telephone UUT ordinances (including Pasadena's) have an outdated reference to language in the Federal Excise Tax. That language is being repealed. So cities all over the state must reauthorize their UUT's without the old language -- or risk losing them on this technicality to lawsuits filed by utility companies. Why can't this wait until the regularly scheduled city election in 2009? Utilities have already filed suit to invalidate telephone UUT's in San Diego and Los Angeles. They won in lower courts and are expected to win on appeal sometime this spring -- and the rulings will apply to all other cities, including Pasadena. So if we wait, we risk losing the UUT and all the services it pays for. What happens if we lose the UUT? Pasadena would lose about $10 million a year from the city's general fund. What would losing that money mean for the city and its residents? Serious cutbacks in city services that would touch every neighborhood. What services would be affected? The general fund is the main source of support for most city services, including: fire fighters; 911-emergency response; police officers and anti-gang programs; street repairs; parks and recreation; libraries: and after-school programs. Would all services be cut equally? Probably not. The City Council would surely set priorities. But the most critical services also cost more -- public safety, for instance, takes almost half the general fund. And $10 million a year is just too much money to make up from smaller departments alone (for example, it equals the entire budget for all of the city's libraries). So chances are that almost every service area would be cut. Why can't the City just tighten its belt and cut costs? The cost of services is rising faster than revenues, so Pasadena already has to find new cost-savings and smarter ways of working every year just to maintain existing service levels. Belt-tightening alone can't make up for the loss of UUT revenues. Service cuts are unavoidable. And the situation is about to get worse. The Governor has announced huge cuts in state funding, which means Pasadena will get less money -- which means cuts in city services. This is the worst possible time to risk losing the UUT as well. Would the schools be affected, too? Indirectly, yes. Like everyone else, local schools depend on city fire protection, street maintenance, libraries, etc. So cuts in those services will hurt the schools. Schools are also facing much bigger cuts in state funding than cities. So, more than ever, local schools will depend on services whose costs are shared with the City -- like after school programs for youth, school safety and transportation, and shared use of recreational facilities. But without Measure D, Pasadena will have to make major cuts across the board -- including services that assist the PUSD. How do Pasadena's UUT rates compare to other cities? There's a wide range. In Pasadena we pay 8.28% on telephone service. That is lower than the rate in Los Angeles, but higher than in some smaller cities nearby. If we pass Measure D, will our taxes go up? No. Not one penny. The UUT rate will stay exactly the same. In fact, the rate cannot ever be raised without a new vote of the people. Critics say Measure D is a secret tax on the internet. Is that true? No. It is absolutely false. The Federal moratorium on internet taxation will last for at least seven more years. Even if the moratorium is ever lifted, Measure D does not impose the UUT on internet access or any other currently untaxed service. To make this absolutely clear, the City Council passed an ordinance that explicitly forbids any tax on internet access without a vote of the people. What if a future Council decides to repeal the "no-internet-tax" ordinance? Can't be done. Under Proposition 218, this council's expression of "legislative intent" is binding on all future City Councils. Only the voters can change it. What about telephone service over the internet? Does Measure D affect that? No. VOIP and other internet-based telephone services will continue to be tax-exempt for at least seven years under the Federal moratorium. It is true that, if the moratorium were ever lifted, UUT would apply to internet telephone services. But that is true under current law (Indeed, it is one reason the Congress passed a moratorium!). Measure D doesn't change the situation in any way. If Measure D doesn't tax the internet, why does it have all this new language about things like voice and data transmission? To protect the UUT from lawsuits. For years, utilities argued in court that UUT shouldn't apply to technologies not mentioned in an original ordinance. But cities successfully argued that the law's intent was to cover telephone service in all its evolving forms. That's why cell phone service (and VOIP) is treated the same as land-line service, even though it didn't exist in 1969. Still, utilities have gotten more aggressive in court. So cities renewing the UUT are also modernizing its language to make explicit what courts have already held to be implicit in the law.