Measure D

The use of “we” in editorials cracks me up. I imagine Queen Victoria dictating her opinions to subservient scribes in velvet trousers and flouncy blouses.

Still, the Pasadena Star-News did a great job with its Measure D editorial today. You can read it after the jump.

Trouble with Measure D

Article Launched: 01/31/2008 06:12:47 PM PST
Several weeks ago we expressed hope that the debate over Measure D, the telephone tax on Pasadena’s Feb. 5 ballot, would evolve into a general one over the question of tax levels and services rendered in the prosperous city. Be careful what you wish for, as they say.

First, a little background is in order. At the time – and to a degree, in these final days before Tuesday’s vote – the opposition to the tax had focused on Internet issues rather than questions of what levels of taxation are necessary to operate the city of Pasadena as its residents wish it to be operated.

The Internet question was, and continues to be, a little bit bogus. Measure D refers to a city utility tax in place since 1969 on telephone usage. Telephones at that time were bulky black things, tethered to desktops, with rotary dials. “Telephones” today are everywhere and in everything, including in little LED-flashing clips on ears, and very much inside – using vastly different technologies – computers. Changes in state law and in telephone usage are forcing cities to put their telephone taxes to a vote if they wish to continue getting anything like the revenues they have been in the past.

But, no, Pasadena’s Measure D is not really an Internet tax.

Still, it’s very easy to see why the city has opened itself up to the charge that it is.

Other California cities, including neighboring ones, have used the same law firm to rewrite, update and attempt to pass new telephone taxes of their own. Thus the language in the many new laws comes from the same “boilerplate,” as lawyers say. Mysteriously – or not so much so, however conspiratorially you want to look at it – a clause was removed from that boilerplate in the Pasadena version that is very much evident in the El Monte version, the Sierra Madre version, that of Los Angeles and Ventura and other cities: “`Telecommunication services’ shall not include digital downloads that are not `ancillary telecommunication services’ such as books, music, ringtones, games, and similar digital products.””Ah ha!” say the opponents. “This means bad old Pasadena wants to tax the Internet when no one else does!”

Actually, lots of people probably want to see the Internet taxed, including bricks-and-mortar bookstores employing locals and paying sales tax here that have to go up against the unfair competitive advantage of an untaxed Amazon. But it’s not going to happen, at least in the near term, by federal law.

“That federal law could be overturned!” cry Measure D opponents, and, yes, it could be. Opponents point out that Pasadena’s mayor has written to Sen. Barbara Boxer, D-Calif., putting the city on record as being opposed to a permanent ban on some taxing of Internet transactions.

The city responds to both charges by noting that the City Council passed an ordinance specifically preventing it and its successors from levying Internet taxes without a vote of the people.

Still, it is troubling that city staff saw fit to remove the “digital downloads” language from the text of the law it is seeking to pass as Measure D. We wouldn’t have minded a belts-and-suspenders approach here.

We also would have liked a sunset clause on the law, which so many other San Gabriel Valley cities have on their utility taxes. Such a clause would bring the taxes to an end several years down the line without a re-certification vote by the public.

And, given the large surpluses on the revenue side that Pasadena City Hall has seen in recent years thanks to sales tax and property tax revenues, we would have liked to have seen residents tossed at least the bone of clicking the 8.28 percent down a tick or two, as even the vast bureaucracy of the city of Los Angeles has done in its own efforts to renew its telecommunications tax.

The problem at this point, say Measure D backers, is that the city is heading into a time of extreme economic uncertainty. Unlike in recent years, the California economy is in real trouble. Property tax revenues are on the way down, as is city income from sales taxes. The $10 million annually Pasadena is estimated to get from a re-upping of this tax will be necessary, city leaders say, to continue a high level of services.

We do believe that high level is just what Pasadena offers its citizens and visitors. Pasadena has never in its 125 years been more prominent, attractive to all comers or visible as an economic and cultural engine in California than it is right now. Somebody – lots of somebodies, from citizens to City Hall – is doing something very right. Is it really time to upset that apple cart?

We think the campaign against the tax, which has recently allied itself not with local arguments about the proper revenues to run a proper city but with a nationwide effort to lower taxes at all levels and change the structure of taxation, has made some interesting points. But we do not think it has done enough sober analysis to show that the obviously successful city is gilding the lily. Lots of people and businesses are still clamoring to move to Pasadena. Very few citizens seem to think that they’re getting a crummy deal.

But we also think that City Hall has made some mistakes in this campaign. We don’t think it’s been up-front enough about the language it had removed from the lawyers’ boilerplate. We don’t think it has been frank enough in recent years with citizens about its revenue levels, which a look at city budgets will show have been consistently over expectations for many years running.

We believe there are times when people can hold two slightly conflicting ideas in mind at once, and that this is one of those times. First, we think the city has done a good – an excellent, even – job on so many levels for its citizens. But, second, there are some troubling aspects about the way this tax has been handled.

As such, we can’t endorse Measure D as it appears on Tuesday’s ballot. Yet that doesn’t mean we endorse the essentially anti-government argument that the campaign against it has evolved into. We see no citizen clamor to pare down what has been by virtually any measure a success story.

Instead, we’ll ask citizens to vote their individual consciences, and, yes, their pocketbooks on this one. Ideally, we’d rather see the city of Pasadena come back to the voters with a better measure on taxing telecommunications incorporating a rate cut and a sunset clause. If the city were to go a year or so without those revenues – well, then some belt-tightening would be in order. Then we’d see if the citizenry felt too much pain around the waist, and demanded a return to the status quo.