Palm Springs voters heavily favored Measure G, which would ensure the city could tax new phone technologies, early results showed Tuesday night.
Measure G would update the city's telephone utility tax. It also aims to replace the optional 911 flat fee, at $1.13 per month, with a new “access line tax” at the same cost.
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The initiative also includes a reduction in the telephone users tax rate — from 5 percent to 4.5 percent. City officials called the reduction a “good faith” gesture to demonstrate it's about equity instead of more revenue.
Measure G, city officials say, will make sure all Palm Springs telephone users — including cell and cable phone customers — pay their fair utility tax share.
However, critics countered that Measure G would empower Palm Springs to tax technologies that weren't intended to be included under a utility tax.
In the 1960s, when cities first adopted the utility charges, “the definition was designed to describe land-line service and exclude the forms of wireless communication that existed back then,” Timothy Bittle, director of legal affairs for Howard Jarvis Taxpayers Association, said in a recent interview.
Presently, Palm Springs' cell phone users pay the utility tax, but customers who bundle telephone lines as part of their cable service don't, Palm Springs Director of Finance Geoffrey Kiehl said.
Proponents and opponents alike agree Measure G's voter-approved passage would protect the city from lawsuits challenging the tax on new technologies.
Palm Springs' telephone utility tax revenues have stayed level during the past three years at $1.2 million — but they should have grown, Kiehl said.
“Intuitively it doesn't make sense; people are having more phones, not fewer.”
Half of that $1.2 million came from land-line telephone users, and the other half came from cell phone users, he said. The cell phone share has grown through the years, even as the $1.2 million has stayed the same, Kiehl added.
Consultants have advised Palm Springs it is missing out on 15 percent in additional telephone tax revenues from users who don't pay, Kiehl said.
The proposed tax cut likely would cancel out the extra 15 percent in revenues, he said.


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