Exit133

August 1, 2013 · Exit133

Challenge Filed to Utility Tax Ballot Measure

​A lawsuit has been filed challenging the ballot measure that would ask Tacoma voters to decide on whether to impose an additional 2% tax on utility company earnings to fund work on Tacoma’s roads.

Last Tuesday Tacoma City Council approved a resolution placing City of Tacoma Proposition 1 on the November ballot. This Tuesday a political group with the unambiguous name “Stop Higher Utility Taxes” filed the lawsuit calling the ballot measure “impermissibly confusing to voters.”

The News Tribune reports that the lawsuit makes several complaint about the wording of the ballot measure.

  • It doesn’t state explicitly that utility customers’ rates might go up.
  • It doesn’t state that the 2% tax would be an increase on top of the current 6% tax on utility earnings - which is already passed along to customers.
  • The title says revenue raised would fund “Tacoma street improvements,” while the body of the proposition says it would fund “basic maintenance and safety upgrades.”

The campaign filing the lawsuit is lead by Bill Stauffcher, and represents businesses and individuals including Simpson Kraft, although Stauffacher says no money has been contributed yet. The City has through next Tuesday to make any revisions to the language of the ballot measure.

So, are you confused?

Filed under: Legislation, City Government

20 comments

  • Jenny J August 1, 2013

    It doesn't seem that confusing to me. Also, I seem to remember that the decision for the utilities to raise their rates on customers is up to them, not mandatory. So if they aren't required to pass the cost along, how can it be included in the ballot measure as if it were? And isn't TPU owned by the city anyway?

  • Xeno August 1, 2013

    Exactly, it is a cleaver way of presenting the issue but it is a tax on the utility, it is only assumed that the tax will be passed on consumers. Which it most likely will but is up for TPU to decide how they'll want to pass those costs on. The first and second problems are bogus and the 3rd is even more bogus. Maintenance and safety upgrades are part of street improvements.

  • Jim C August 1, 2013

    I'm a No vote. I believe this type of budget "creativity" by the city is what has led us into this fiscal situation to begin with. How about the city addressing revenue through serious means, gas/property/B&O or other true use taxes. Taxing utility earnings isn't a reflection of any particular customer's use but will provide the utilities a great excuse to levy additional surcharges, which probably won't reflect the true cost, on city residents. I also object to any legislation referring generally to "street improvements" which I've found, in Tacoma, to mean anything from signaled crosswalks to nowhere (sorry, "scenic viewpoints") and faux-wrought-iron planters. IMO, this legislation appears to be poorly considered.

  • Jesse August 1, 2013

    From what I understand, Tacomans would pay about $5 more a month. That money is doubled by the people outside of Tacoma in the TPU tax as they're going to chip in $5 as well. That makes about $10-$11 million all in all. That is considered seed money to land federal, state, etc grant money to the tune of $30 million more for a total of about $40 million a year worth of road work, for which Tacoma residents pay only $5 million for. Is that right? If you've ever bitched about the condition of the roads, and you're a Tacoman, here's your chance to fix them. This seems like a no brainer. If Simpson folds because of the new tax, Tacoma loses 400 good jobs but gains a new perception in the region as a town that doesn't literally stink. How many jobs and residents have Simpson caused to locate elsewhere since its inception?

    • talus August 1, 2013

      Great points, Jesse. The opportunity costs to Tacoma of hosting a poorly sited big polluter are huge.

  • Gary August 1, 2013

    Utilities rates are set by cost-of-service. They charge what it costs them to provide services to ratepayers. Public utilities do not make a profit. Future rate increases must include all costs, including taxes. Utilities answer to their governing bodies to make sure they do not charge excess rates.

  • Name RWK August 1, 2013

    Another way for the city to 'blackmail' voters who have already turned this down by vote previously- so now the city takes it out of taxpayers vote control by assessing the utilities a tax who they know will pass on to the taxpayers and who they ( Tacoma) will ultimately approve such a rate increase. The FACT that taxpayers outside of Tacoma will be forced to pay higher utility rates is an absolute insult - TPU should specify that ONLY taxpayers within Tacoma will get the likely rate increase- once they confine it to Tacoma - the 'rate' will be much higher. This whole thing is a veiled 'taxation without representation' by the politicians of Tacoma. People are sick and tired of being taxed to death, levied to death and misled by these folks. Make no mistake-if this passes- it WILL mean yet another additional tax ! TPU- please include in your case-that you reserve the right to charge ONLY Tacoma residents your new rate increase if this passes

    • Xeno August 1, 2013

      Who is representing you at Comcast? TPU is a business that is a public utility. We need improved road,s please tax me more for them!

  • fred davie August 1, 2013

    The proposal will result in a NEW REGRESSIVE TAX on the citizenry. Because it is a regressive tax it will disproportionally affect the POOREST families in Tacoma. Surprising that our city council which prides itself on it's progressivism would inflict this charge on Tacoma's poor. Surprising and shameful.

    • tacoma1 August 1, 2013

      Doesn't seem that it would be particularly regressive to me. Rich folks have bigger houses, tend to use AC, water their lawns in the summer, and keep their homes toasty warm with electric or NG heat in the winter. Families with a tight budget tend to heat with wood in the winter, and in the summer, they don't have A/C, and also let their lawns go dormant. The richer that you are, the more utilities you use, the more utility taxes that you'll pay. The poorer that you are, the fewer utilities that you will consume.

    • Jesse August 2, 2013

      I'm curious, is there a tax you'd ever be ok with? Is there anything on earth that the government could do that's worthwhile enough to you for ANY tax, fee, or increase in your cost of living?

  • fred davie August 1, 2013

    The sales tax is generally regarded as a regressive tax...and yet rich people probably spend more than poor people. It' the disproportionality of the tax which makes these taxes regressive. Poor people pay a larger portion of their income to satisfy the tax.

    • tacoma1 August 1, 2013

      It's not a sales tax that is being proposed. It's a tax on utility company earnings. Poor people spend zero of their income on cooling their house or on their lawns in the summer. People that live in small apartments wouldn't spend much on heat in the winter either. I doubt that a tax on utility company earnings is particularly regressive.

  • fred davie August 1, 2013

    The proposed tax will be passed through to the rate payers and it is a regressive tax. Utility bills take a larger PORTION of a poor families income than a rich families income. That makes utility bills and taxes on utility bills regressive by definition. Regressive taxes are measured by percentage of income and not the dollar value. Now do you understand what a regressive tax is?

    • tacoma1 August 1, 2013

      Since I know you love hypotheticals, here is a hypothetical utility bill scenario monthly income sq ft of apt/home monthly utility bill percent of income $2,000.00 500 $80.00 16% $8,000.00 3000 $600.00 20%

      • tacoma1 August 1, 2013

        actually 4% and 8%, not 16% and 20&

  • tacoma1 August 1, 2013

    It's not regressive just because you say it is. Maybe u have some proof that a tax on utility co earnings would be regressive

  • fred davie August 2, 2013

    The rich person only has 4 times the income, but he has 6 times the house, and 7.5 times the utility bill of the poor person? Using this sort of logic it would be impossible to describe any tax as a regressive tax.

  • Xeno August 4, 2013

    Its technically not an anything tax until TPU decides to push it on consumers in its own way. Please people...

  • Published Author RR Anderson August 4, 2013

    Death2SimpsonKraft! I want to breath air that doesn't smell like hobotaint