City to ask voters to update utility tax

DOWNEY – To modernize the city’s utility tax and to stave off threats to the tax’s existence, the city is asking voters on Nov. 6 to approve a new version of the law.

The city is proposing dropping the tax on telephones from 5 percent to 4.8 percent. The new language also includes more types of communication devices, such as Internet voice-communication services and data streaming, according to a City Council agenda.

The City Council on Tuesday is scheduled to decide whether to put the change on the ballot.

Right now, the 42-year-old tax relies heavily on land-line telephones.

If voters don’t pass the new version of the tax soon, policy decisions and a few pieces of federal legislation could foil the city’s chances to collect the tax, according to city officials.

Downey collects about $7 million in utility taxes annually, and the new version of the law would capture about the same amount of money.

“We don’t want more money,” Councilman Mario Guerra said. “What we’re trying to do is to make it fair for everyone so a few people are not paying for everyone else.”