By Peter Tigler

There are two things to consider when voting on Prop SM: What is being taxed and where is the money going.

The City of Santa Monica wants to add a 10% tax on all data moving point to point, no matter how transmitted. Simply put, this authorizes not only a tax on cell phones and “texting”, it paves the way for taxing internet access and satelliteTV. It also allows the taxing of technologies not yet in use, and adds service calls and rental equipment (such as DVR boxes and modems) to the list of taxable items. To add insult to injury, it taxes late payment fees.

The city is disingenuous when it states that the internet and satellite services will not be taxed. As current federal regulation is eased and lifted, your internet and satellite services will be taxable; by passing Prop. SM you will have given permission for local authority to do so. Your fundamental American right to scrutinize new taxation will have been forfeited forever, as there is no “sunset” or expiration period in this measure.

The current ordinance has served us well for 40 years. “Changing technology” is hardly a compelling reason to give blanket permission for taxing virtually all information technology, particularly when it includes technology not yet imagined.

Only 1/3 of California cities levy user utility taxes (UUTs), and only a handful tax all utilities, like Santa Monica. Beverly Hills, Thousand Oaks and San Diego do not have such taxes. Santa Monica’s 10% tax is near the highest and double the average tax of 5%.

Most cities that have re-written their UUTs have offered lower rates, sunsets and exemptions for all seniors, not just low income seniors. Santa Monica’s proposal offers none of this to residents.

The city propaganda fails to acknowledge that as the city grows so does the number of taxpayers. As rates increase, the collected tax also increases. This means the city always has an increasing tax base and increasing income from the UUT, without an expansion on the taxable items. City figures and charts are not forthcoming.

Most important: should this measure fail, the City Manager’s office acknowledges, “The existing tax will still be collected.” No money will be lost; there will be no cuts to police or fire departments and the schools won’t lose their city subsidy.

Further, City documents state this new tax money would be banked or reserved next year, thus negating the city claim that the money is a vital necessity. The City Finance Director’s contingency plans show that by voting down Prop. SM , all “essential services can be maintained.”

Voters need to know that this tax money goes into the general fund, and is not earmarked for any particular city service or program. The general fund finances many of the city follies, such as hiring crony consultants, cutting down healthy trees and quarter-million dollar reports on avoiding panhandlers. City claims that this tax supports only “essential” items are simply not true.

The City is selling this proposal as an “update”, and a “closing of loopholes.” But it is their claim of “fairness” that is especially hard to believe.

In truth, the city has been collecting an UN-authorized tax on cell phone for years. Is it fair that they withhold this fact? If the city wants to tax your cell phone, it should say so, and write a tax that allows it. But we are not hearing that from Santa Monica City Hall. From the way Prop. SM is written, they want it all.

Voters need to remain in control.
Vote no on Prop SM.

Please read the text of Prop SM (in particular sections e & r of the measure):

http://www01.smgov.net/cityclerk/council/agendas/2008/20080723/s2008072308-C-2.htm

Vote No website:

http://www.keepinformationfree.com