February 1, 2008
LAist Guide to the Primary: Proposition S
We all know that in five days Californians go to the polls to decide the fate of this state, this country and the world. That gross overstatement seems fitting given the coverage and verbage some are using to describe the upcoming Primary.
But, hey, what might have gotten lost in the shuffle of debate talk, Indian gaming commercials and Obama vs. Hillary rhetoric is a city ordinance that could affect everyone with a cell phone. So...everyone.
Today's focus is Proposition S, an L.A. City measure that is stirring up passionate debate on both sides from those who call it vital to maintaining city services to those who maintain the measure is bad for you, the average Jo(e).
If you need to brush up on your Shakespeare, take a look at our past reviews of Propositions 91, 92, 93 and 94-97.
Cell phone user, by dogseat via Flickr
First tell me what it is
- Prop. S is officially called, "Reduction of Tax Rate and Modernization of Communications Users Tax."
- S is one of ten local jurisdictional measures around Southern California on the Feb 5 Primary ballot. Inglewood, for example, is considering a ban on fireworks and Redondo is considering bond to pay for schools and parks.
- The official language of our city's ordinance is here, but in plain English, it's a Communications Users Tax ordinance that would lessen the existing tax rate on new media (cell phone and T1) users from 10% to 9% while updating that new structure to include "modern communications technologies," like cell phones and T1 lines that were previously not included.
- Specifically, S would tax cellphone users (including text messaging but not Internet use). S would continue the exemption low-income, seniors and the disabled already receive with the money to fund general municipal service, such as 911, police, fire protection, street maintenance, parks and libraries.
Who likes it and why?
- City Hall, the police and fire chief, Mayor V and former Mayor Riordan and some business groups all sing its praises. They love S because the thought is that the measure will flush some money back to the agencies that badly need the funds, like:
• Crime investigation units
• Domestic abuse response teams
• Gang prevention
• Traffic control
• Emergency ambulance service
• Police officer hiring and training
• Firefighter hiring and training
• Replacement of outdated firefighting equipment
• Upgrading emergency communications systems and training. [Prop S Facts]
- Supporters contend that S "closes a loophole," because people who use T1's for the phone do not currently pay a tax on the line. Thus it is only fair that the cheap asses who have been milking the county dry pay up. But, don't worry, Prop S Yessers say:
Once Proposition S is adopted by the voters, the City Council cannot increase the tax without voter approval. [Prop S Facts]
- The LA Times also liked the measure enough to endorse it last week, calling it:
a prudent measure that would protect Los Angeles' 40-year-old telephone tax while simultaneously reducing it and applying it more fairly to new technologies. By rejecting the measure, voters would simply be punishing themselves by de-funding their government services. [LA Times]
How much does the city stand to lose from the loss of potential taxes if it is not approved?
- The Yes on S folks claim that $270 million could be lost.
What is the opposition saying?
- Wait just a minute, No on S peeps say, why the hell is the City Council trying to pass a measure to reduce taxes when they are free to do that at any time? Point taken: you only need to float a resolution to raise taxes, not reduce them.
- The money won't actually go to safety organizations, they say:
Nothing in Prop S requires City Hall to spend the money on hiring more police or fire fighters. Rather, Prop S is a general tax, which means Villaraigosa and the City Council can squander your money on anything they want. Why trust them with even more money? [No on Prop S]
- No on S peeps say that the measure would actually tax Internet use, citing the exact language of the bill. However, that claim contravenes a federal law that prohibits a tax on Internet use and Los Angeles could not easily get around that. Nor do they want to.
- It's not good for consumers, some say. "Proposition S is an anti-consumer, regressive tax," Mayor Sam said. Prop. S would impose a 9% tax for land lines, cell phones and wireless services, but would leave the tax rate for telemarketers at 5% and reduce to 0% the cell, internet and wireless service tax for the LA Times, Hoy and other local news radio stations.
- Zuma Dogg ain't a fan either. But it's best for him to tell you why:
That's what they think. What about you?
Photo of Mayor Antonio Villaraigosa by Dave Bullock via Flickr; "Cell phone" by frogmuseum2 via Flickr.



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I will be voting no for two main reasons.
1. California already has one of the highest cell phone taxes in the Country at 18.66% That is high enough
2. Even though there are Federal laws prohibiting the tax on internet use I personally feel the language could still possible contain a loophole we do not currently see
Also why can't they just be clear and upfront about naming this thing. It is so misleading and only leads to more misleading propositions in the future.
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Tsk, Tsk!
It's a tax hike, pure and simple. Calling it anything else is simply deceptive! Strike One!
Our budget dilemma is not one of $ but one of management. The City’s annual revenues climbed 27% between the 2004-05 and the 2006-07 budgets, to an all-time high of $6.7 billion per year. Strike Two!
Los Angeles City Controller Laura Chick says "And we shouldn't think of asking taxpayers for more money until we get our house in order." Strike Three!
p.s. In the spirit of Full Disclosure it should be noted that the new "Tax" does not apply to those involved in the gathering of "News" which explains the LAtimes and their cavalier endorsement of the new tax. Bloggers, get those media passes!
(d) Exemptions. -snip-
the tax imposed under this section shall not be imposed upon any Person for using Communications Services under the circumstances set forth below:
1. News services. No tax shall be imposed under this section, except with respect to local telephone service, on any payment received from any Person for services used in the collection of news for the public press,
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Well, I will be voting yes on Prop S. because I for one do not want to see the city's public services cut.
They indeed will be dramatically slashed if Prop S does not pass. Say goodbye to your libraries and parks being open. Got trash? Bring it to the dump yourself...
We have been taxed on our telecommunications for many, many years. Voting no on Prop S. isn't going to change this, we'll just end up creating an ugly situation. By Voting Yes, we're voting to maintain services that are vital to keep the city that we call home running smoothly and safely.
I have read a lot about this Proposition and it is my understanding that ONLY THE SERVICES YOU PAY FOR ON CELL PHONES CAN BE TAXED, NOT THE TEXT MESSAGES THEMSELVES. Also, cell phone service use is already taxed under the current structure, so it's not new. It's confusing in this article's paragraph where it states that the proposition decreases the current tax on new media (including cell phones) from 10% to 9% but then it states that it updates the current structure to include "modern communications" like cell phones. Hmmmm.
We all have to pay taxes to support the systems and services we enjoy and often take for granted. In a perfect world, the city could just provide for us, but we don't live in a perfect world. We have to pay actual dollars for our safety, our intellectual freedom (to keep libraries open), our water service, our trash pick-up, our fire service, our police service and places for children to go after school when they have nowhere to go. (Unless we'd like to host them all at our homes. Great!). The existence of these services make our world a better and safer place in which to live.
The city of Los Angeles gets $270 million from this tax. By voting yes on Prop. S, we are basically saying that it's okay to keep this tax.
Yes, there will be parties that benefit from this tax, but someone will always benefit more than another person from paying one thing or another. Businesses always have gotten breaks, but they likely otherwise could not remain open. And since most individuals aren't getting T1 lines into their homes, it will be businesses picking up the big money payments on this part of the tax.
Last year, the City of Covina voted their city council out because they supported a similar proposition that they passed on as voters. Then, upon realizing that the city had no other way to come up with the money for public services, the new city council, which swore they wouldn't back that proposition, then had to impose it on its citizens to keep the city running.
To address the above comments:
1. The tax that Prop S concerns is only 10%. I'm not sure what this 18.99% is all about.
2. Not to be flip, but it sounds like you're not sure about whether the language allows this or not, you just think it does. You can't "feel" between the lines. It's my understanding that legal language is loose for a reason. This is so a law or regulation can interpreted as situations change, and not always for the worst.
3. The city is desperate. We've all been there. They're trying to sell it. It's called politics. It actually will be a reduction at first, and then it will resume to 10%.
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I can't make a case for S any better than minthemiddle did. I will add my favorite LAPL librarian quoting Kurt Vonnegut: "The America I love still exists at the front desks of our public libraries."
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fine then propose a "10% tax on telephone usage to support the public services" bill. I would gladly vote for that. I wont vote for a fake tax cut because i am sick of the city's attempt to mislead and confuse people. Most of us don't have a law degree.
If their bill was so up front about spending the money from these taxes specifically on public services I would believe them, but there are so many loopholes and I just know a good chunk will end up going somewhere I don't support. What is the harm with adding "these funds will only go towards library, trash, and safety services" in it?
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NO doubt AT ALL, YOU made Mayor VERY VERY happy with what you wrote. You Proved: HE succeeded --with his lies --but worse: not only did you fall for it, you posted drivel on it. YOU didn't understand it well enough to Explain why people oppose it. Proof?
Tax NOW is: "0"
--HOW is "9% tax" LESS than?
YOU: didn't do your homework. --City: ILLEGALLY imposed AND collected a tax they FAILED to get permission from voters to Impose. CITY WAS SUED --and THEY LOST. But: They continued to collect it, since 2003.
But thanks to dumbies, NOW:
-free voice-over-internet calls WILL BE TAXED.
-Texting: TAXED.
-ALL NEW phone things: will be TAXED. --Land-lines --blackberry --ALL. Your land-line: disconnected? Reconnection AND security charges: 9% tax WILL BE SLAPPED ON that too.
NOTHING in the fake Prop states: money WILL BE USED for police -fire -library -parks, etc. IT ACTUALLY says: money will go into the pot --for the Fraud Squad and the Chief wangler to suck on, deeply. Did YOU NOT read: Laura Chick's comments???
PEOPLE JUST VOTED TO --TO GET A TAX SLAPPED ON THEIR PHONE THEY DIDN'T HAVE TO HAVE. --YOU Helped Chief Bratten AND MAYOR LIE.
And Guess what, genius: the NEW tax --STARTS --count 'em --in TEN DAYS. Really nice. sheesh, thanks for Helping getting LA taxed, morron.
THIS SITE: 100% PURE drivel waste of time.