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Howard Jarvis Taxpayers Ass'n Vows To Stop City Halls With Utility Taxes From Profiting From Electricity Rate Increase

If City Halls don't lower utility taxes themselves, group will help taxpayers with ballot measures

(March 29, 2001) Following the biggest electricity rate increase in CA history, the Howard Jarvis Taxpayers Association has vowed to prevent City Halls across the state with utility users taxes from reaping a "windfall profit on the misery of utility ratepayers."

In a March 28 written statement that mentions LB in a historical context, Howard Jarvis Taxpayers Association president Jon Coupal said his group is launching the Tax Relief for Users of Electricity (TRUE) Project to provide relief from utility taxes that rise as utility rates rise.

"Consumers and ratepayers who are socked with higher rates should not have to endure the additional insult of higher taxes. City and county governments, we are putting you on notice that it is time to review your utility user tax rate and expeditiously lower, or eliminate it so that you do not reap a windfall profit on the misery of utility rate payers," Mr. Coupal said.

He warned that governments which fail to take action will become the likely targets of his group's TRUE Project which will use the initiative power in Proposition 218 (an initiative sponsored by the Howard Jarvis Taxpayers Association passed by voters five years ago), section three of which makes it easier for the public to use the local initiative power.

Mr. Coupal noted, "Last fall, taxpayers in the City of Long Beach used the section three initiative power to cut their utility tax rate in half," referring to LB fiscal reformer Norm Ryan's Prop J, which passed by nearly 70% of the vote in November, 2000.

Initially, LB City Hall incorrectly claimed Mr. Ryan needed more petition signatures than Prop. 218 required, which would have kept Prop J off the ballot. After the Howard Jarvis Taxpayers Association advised LB City Hall of what Prop 218 actually required, LB City Hall put Prop J on the ballot, then took a series of counter-measures attempting to defeat it, all of which failed.

As of April, LB's utility tax will be 8% (previously 10% before Prop J) on all utilities, investor owned (electricity and telephone) and City Hall run (gas and water). Under Prop J, the utility tax is scheduled to drop in October, 2002 to 7% with two more annual 1% decreases until it reaches 5%.

As previously reported by, Mr. Ryan announced at the March 24 public meeting of LB Citizens for Utility Reform that he is contemplating a new ballot measure that would eliminate the utility tax from the City Hall-run utilities. LB's City Hall-run gas utility has for years produced a de facto "profit," paid by LB ratepayers, that City Hall has used to help feed its General Fund (which pays for items ranging from police and fire to travel and perks).

The Howard Jarvis Taxayers Association said it will "be on the lookout for especialy recalcitrant local governnents" and "the worst offenders can expect themselves the targets" of concerted action by the group's TRUE project and local taxpayers.

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