The City Council voted 5-0 on Monday to reject a proposal to increase the city’s utility tax by adding a fee for out-of-state telephone calls. The current 5% tax is levied only on calls within the state.
The utility tax was imposed in 1983 on all commercial and residential users of electricity, natural gas, water, telephones and cable television. The council promised to eliminate it as as soon as the city could afford to.
Since then, the council has phased out the residential tax on water, electricity and natural gas. The tax on residential telephone users is scheduled to be eliminated Jan. 1, 1990.
But at a council meeting Monday, the city staff recommended taking advantage of an Illinois court ruling that interstate telephone calls may also be taxed.
Councilwoman Mary Louise Bunker, saying she did not want to increase the tax on residential users, proposed adding a tax on interstate calls by businesses after Jan. 1 when the phone tax for residents will have been phased out.
Councilman Boyd Condie, while conceding that he ran for election last November on a pledge to eliminate the utility tax, also did not rule out a tax increase.
“I’m not backing down from (the campaign promise), but I do feel that there are times that we have to make provisions for things that come up in the future,” Condie said.
But his motion to table the matter so that the council could study it was defeated.
Mayor Michael Blanco and Councilman Talmage Burke both spoke out strongly against a tax increase.
“It’s idiotic for us to pass a tax just because it’s available,” Blanco said.