Pasadena : Broader Phone Tax Planned

By a 4-2 vote, the Pasadena Board of Directors has instructed the city attorney to prepare an ordinance extending the city’s telephone tax to interstate and international calls.

Mary J. Bradley, city finance director, told the board that the extension would raise $1 million a year in tax revenue. The U.S. Supreme Court cleared the way for the extension recently by upholding state and local taxes on interstate and international calls, rejecting the argument that the taxes are an unconstitutional burden on interstate commerce.

The city tax of 7.86% currently applies only to calls made within California. Representatives of the Pasadena Chamber of Commerce and the Ralph M. Parsons Co. argued against broadening the tax, asserting that it would put a heavy burden on businesses. Director Jess Hughston agreed, saying the city has lured companies to Pasadena and should not now be raising their costs. Mayor William E. Thomson Jr. opposed the tax increase on grounds that the city had not yet identified a purpose for the revenue.

But other directors supported the increase, saying that the city’s financial position is deteriorating.

Director John Crowley said the city is caught between declining allocations from the state and federal governments and rising demand for city services. Director Rick Cole warned that Pasadena has a “tough fiscal year ahead,” adding that “this is probably not the only tax that is going to have to be raised next year.” Directors Kathryn Nack and William Paparian voted with Cole and Crowley. Director Loretta Thompson-Glickman was absent.