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The right call

Measure U takes a sensible approach to modifying L.A. County's telephone tax.

October 09, 2008

Los Angeles County is asking voters in its unincorporated communities to ratify and modify an existing telephone tax in much the same way that voters did earlier this year in the cities of Los Angeles, Pasadena, Culver City and a number of other municipalities. In this era of financial uncertainty, when governments are starved for vital cash and voters are being asked to fund new services, this one is easy. Voters should keep their current services intact and their tax bills, on balance, the same. The Times urges a yes vote on Measure U.

There are some key things to keep in mind. First, only voters in unincorporated areas pay this tax, and only they will vote on this measure. The tax applies to residents and businesses that are billed for utilities in parts of the county that are not cities. If you're billed in the city of L.A., for example, or one of 44 other cities in the county with its own utility tax, this one doesn't apply to you. If you're billed in Lancaster, or one of the other 42 cities in the county with no utility tax, this one doesn't apply to you either.

But 65% of Los Angeles County's 4,084 square miles is not part of any city. If you're billed in one of those places -- communities without mayors or city councils, including Rowland Heights, City Terrace, Stevenson Ranch and about 100 others -- you currently pay a 5% tax on utilities, including telephone service. Measure U will be on your ballot and, if it passes with a simple majority vote, will lower your tax to 4.5% and make clear that it applies to cellphones and other "new" communications technologies.

In those unincorporated areas, Los Angeles County supplements its regular programs, such as child welfare and health, with the libraries, public works and safety services that cities usually provide. The utility tax helps pay for it by raising $65 million, although the Board of Supervisors spends just under a third of it to supplement the county's health services.

In fact, the board could spend the money any way it wants to, because it's a general tax, not earmarked for any particular purpose. That's why it needs only a simple majority to pass. But the supervisors have been prudent with the revenue, knowing that residents of the unincorporated communities demand basic services and will rebel at the ballot box if they don't get them.

Most utility taxes were imposed when there was only one telephone company, everybody had land lines, and it was easy to figure out how to bill for service and add a simple tax. Things changed when cellphones became common; counties and cities tried to extend their taxes to those services but discovered, in court, that intervening state initiatives on taxing required voters to approve or reject any changes.

Like similar ballot measures elsewhere in the state, this one makes clear that any call made with any technology is subject to the same tax. Federal law that bars taxing the Internet keeps this tax from reaching Internet access services, and if that law changes, voters would get to weigh in again. But to make it exceedingly clear, Supervisor Michael Antonovich insisted on adding language that clarifies that this measure, if passed, could never apply to Internet access.

The Times appreciates the honesty of cities such as Pasadena, which asked voters to ratify its tax as-is, without enticing them with a half-percent decrease the way the city of Los Angeles did. The county is taking the latter route. We urge county leaders to be straightforward with voters by explaining that Measure U will probably be revenue-neutral, lowering some taxes by extending the tax to other technologies. That said, it's a good deal for voters in unincorporated areas, who should follow the examples of their city neighbors and vote yes.

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