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Apathy could hurt General Fund

Measure U would reflow the revenue stream closed off by changes in telephone technology, officials say.

March 04, 2011|By Gretchen Meier,

Voter apathy could cost Burbank millions of dollars if Measure U fails at the polls in April.

Measure U, a utility tax for telephone users, would modernize the city’s tax codes to include new technology and preserve a substantial revenue stream for Burbank.

If the measure fails to pass on April 12, declining telephone land line use by consumers in the city could result in a potential loss of $6.1 million, or 4.3% percent of General Fund revenue, city officials warned.


“This is not a tax increase, but merely an effort to secure the existing revenue,” said Patrick Flynn, grants and revenue manager for the Financial Services Department.

Burbank officials expect $7.5 million in revenue from the 7% tax currently assessed on electricity, natural gas and telecommunication services.

The utility tax rate would not increase with Measure U, nor would it expand to include water, sewer or cable services, as is common in other cities.

The new ordinance would instead modernize definitions of services to capture current trends — wireless, texting messaging, caller identification — and allow flexibility to include future technologies.

Without the updated language, Burbank could be left behind as more customers move away from traditional phone service, and revenue from local land lines continues to decrease.

Glendale, Pasadena, Los Angeles and Sierra Madre voters have overwhelmingly approved updates to their own utility taxes.

Prior to voter approval, the telecommunications portion of Glendale’s utility tax generated roughly $8.7 million for the General Fund each year.

Industry giants such as AT&T and Verizon have already notified the California Public Utilities Commission that they plan to exit the traditional land line business within seven years, according to a city report.

Burbank may see a small increase in revenue with the modernization of the language, but financial services officials believe the continued decline will offset any initial increase over time.

To combat voter apathy and stress the important of the ordinance, the city has spent $26,500 to disseminate information about Measure U, Financial Services Director Cindy Giraldo said.

Turnout among registered voters for the Feb. 22 primary election was down to 14.3%.

The City Clerk’s Office will continue to reach out to voters through a variety of avenues, such as multi-language fliers and mailers, yard signs, street banners and notices on refuse trucks.

A simple majority is required to pass the measure.

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