Rancho Cordova to vote on new tax

By Megan Hansen
CNS Staff Writer

Rancho Cordova residents will pay more for using their cellular phones if a proposed utility tax to fund police services and city improvements is approved in the upcoming special election.

The City Council voted 4-1 on March 5 to place the tax on the May 19 ballot. If approved, the tax will be used for police services, maintenance and improvement of city streets, graffiti removal and code enforcement. The measure requires a two-thirds vote to pass.

The proposed tax expands upon an existing utility users’ tax that goes into the city’s general fund. The tax is a 2.5 percent charge on electricity, natural gas, landline telephones, cable television and sewer service. Adoption of the proposed tax would extend the 2.5 percent charge to newer communication technologies, such as cellular phones.

Councilman Robert McGarvey said the utility users’ tax needs an update as more people eliminate their landlines, resulting in a loss of utility tax revenue.

“We have a utility tax in existence and it needs to be rewritten so it can handle today’s electrical uses on phones, cable and other modern utilities,” McGarvey said. “We’re seeing a loss in landlines and right now we’re looking for some way to upgrade the current language of the tax.”

City Manager Ted Gaebler said the tax would help preserve city operations.

“We’re trying to preserve income and maintain the existing taxes,” Gaebler said. “We have a tax we want citizens to have an opportunity to sustain.”

However, not everyone wants the tax on the ballot. Councilman David Sander expressed opposition to the measure.

“If this passes, I’ll pay tax on my cell phone that I currently don’t,” Sander said. “I’m worried because we haven’t prepared a public campaign or citizen outreach program to explain this tax.”

Councilwoman Linda Budge said the proposed tax is an attempt to keep up with changing technology and would help alleviate current revenue shortages.

“This is a response to changing times and changing technology,” Budge said. “This is a prudent part of an overall budget strategy to try to make sure that the forecast for the two and three years out is not as grim as it certainly seems.”

Donna Silva, city finance director, said extending the utility tax to more users and designating funds for a specific purpose would ease financial strain on the city.

“We are in the throws of a recession,” Silva said. “We have experienced million dollar year after year declines in our sales tax revenues over the past two years and our property tax revenues are declining due to foreclosures.”

If passed, Silva said the new taxes would be implemented after notifying utility companies.

“We would notify companies like Verizon, AT&T, Comcast and DirectTV to update their billing procedures,” Silva said. “They already have the mechanisms in place to tax residents and make sure the money gets back to the city because they already do it with landlines- it would just need to be updated.”

Voters will receive their voting materials in the first or second week of April.