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LB Taxpayers File Notice of Intent to Circulate Initiative Petition to End Utility Tax on City Hall Run Utilities (gas and water)

We post notice, verbatim

(August 17, 2001) -- Three members of LB Citizens for Utility Reform (LBCUR) filed a notice of intent with the City Clerk on August 16 to circulate an initiative petition to end LB's utility tax on City Hall run utilities (gas and water).

Traci Wilson-Kleekamp (4th district), John Deats (8th district) and Lewis Lester (6th district) signed the notice, which is a legal prerequisite to gathering roughly 4,000 valid petition signatures needed to put the measure on the ballot.

In a press release, Ms. Wilson-Kleekamp said:

"[T]he City has used one excuse after another to continue overtaxing the residents. Citizens have told LBCUR representatives that they feel their trust has been violated - especially since the public had to reduce the tax by ballot initiative because the City refused to make good on their promise to 'sunset' the tax.

Mr. Deats remarked:

"When the voters passed Measure J they were telling City Hall to take their hands out of our pockets. The City threatened cuts in essential services for public safety, libraries and parks if Measure J passed. Today the City has even more money for services than in the past, yet their hand is deeper than ever in our pockets."

And Mr. Lester noted:

"LBCUR agrees with many residents that the City has repeatedly violated our trust by claiming it made no revenue windfalls. Now the City Manager is now offering to reduce the gas portion of the UUT to 5%. But we think he can find the money to reduce gas and water taxes to 0."

And Norm Ryan, who led Prop J (cutting LB's utility tax from 10% to 5% over five years) to a near 70% voter victory in November 2000 and is now running for Mayor, observed:

"The City budget is awash in cash, and as always it's one big shell game and the same managers who keep messing things up are getting raises. LBCUR's initiative is a signal that we're keeping our eye on the budget process, and if they don't do the right thing by adopting a budget based on the assumption of no UUT on city owned-utilities or a meaningfully indexed UUT, the voters will see them at the ballot box."

LBCUR co-chair John Donaldson opined:

"The citizens of Long Beach are being charged as gas department ratepayers, and then charged again as taypayers and that amounts to double-dipping. And the more the City mismanages its utility, the more money they make. Instead of focusing on offering ratepayers the lowest possible gas prices, they are focused on revenues and making a profit. If we had any form of meaningful citizen oversight this never would have happened."

Text of the Notice of Intent follows below:

Notice is hereby given by the persons whose names appear below of their intention to circulate the petition within the City of Long Beach for the purpose of amending the utility users' tax ordinance of the City (MC Chapter 3.68). The reasons for the proposed petition are as follows:

In November 2000, Long Beach voters overwhelmingly adopted Measure J, an initiative to reduce the City's utility users' tax by one percentage point per year for 5 years. Backers of that initiative hoped to provide meaningful tax relief, improve the local business climate and allow City officials time to gradually adjust their spending priorities without cutting services. Had Measure J been implemented based upon the rates in effect when the voters approved it, it would have done just that.

Instead, immediately following the November 2000 election, Long Beach ratepayers received gas bills from the City's municipal utility that were nearly double those in the surrounding cities, and they have since received soaring electricity bills that are expected to continue for several years.

The result is that even taking into account the utility users' tax reduction enacted by Measure J, the recently-released City budget demonstrates millions of dollars of windfall revenue while Long Beach citizens are struggling to pay their bills.

In fairness to the City's ratepayers, the hardship caused by higher-than-average utility rates should not be worsened by higher taxes. The utility users' tax must therefore be "indexed," or adjusted to compensate for dramatic energy rate increases. Only a rather complex measure could accomplish this with absolute fairness. The present Initiative is designed to sidestep legal formulas and serve as a tax relief measure that is readily understandable to voters and acceptable to the courts. It would zero out the utility users' tax on all municipal utilities, thus compensating for dramatically higher electricity rates and eliminating any incentive on the part of the municipal gas utility to charge rates any higher than those in the surrounding market.

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