Arcadia to Tax Interstate, International Phone Calls

Despite some community opposition, the City Council voted 3 to 0 Tuesday to impose a 5% tax on interstate and international telephone calls.

The tax, which would be levied beginning Oct. 1, supplements revenue from a 5% city tax on local and calls within the state. The new tax is allowed under a U.S. Supreme Court decision ruling that such a tax does not improperly burden interstate commerce and is therefore constitutional.

After the court ruling, Pasadena, Monterey Park and Los Angeles, to boost city revenues, quickly approved a tax on interstate and overseas calls. The taxes ranged from 2.75% in Monterey Park to 10% in Los Angeles.

Alhambra Votes No

But a similar proposal in Alhambra, where the City Council has been gradually phasing out an unpopular utility tax, was defeated.

Arcadia city officials estimate that the new tax annually will raise $225,000, which council members said is needed to help pay for city services such as police and fire protection.

“My perception is that the people of Arcadia want the level of services that we’ve been providing,” Councilman Robert Harbicht said, before the vote. He said the new telephone tax “would just about put the budget in perfect balance.”

About 30 people concerned about the proposed tax attended Tuesday’s meeting, and eight of them voiced opposition to the tax before the council vote.

Resident Frank Rush challenged council members to reject the tax, reminding them that a general utility tax adopted in 1980 was not popular with residents. “The majority of taxpayers of this fine city viewed it as an underhanded move by your predecessors to get around Proposition 13,” Rush said, referring to the 1978 state initiative limiting property taxes.

Dick Martinez, a 14-year resident, said the tax would single out residents, especially immigrants, who have relatives in other parts of the country or overseas. An elderly woman who said most of her relatives live on the East Coast told the council that the tax would be an additional burden for senior citizens like her.

“This is one of those hard shots to call,” Mayor Roger Chandler said, before voting to adopt the tax. “But we think we’re making the call that’s good for the city in the long run.”

Councilman Charles Gilb said the tax is needed to help pay for additional police officers to combat a growing drug problem in the city. “I’m going to support this tax because I think it’s right,” he said, “It’s a small amount.”

Both Harbicht and Gilb said the tax would cost each resident just 40 cents a month. Actually, the tax would vary for each telephone customer, depending on the number of interstate and overseas calls the customer makes.

Council members Mary Young and Dennis Lojeski were absent.

Other opponents of the tax said they would not mind paying for needed city services but wanted the council to make a greater effort to consult residents before acting. Residents addressed the council Tuesday night during a routine “public comments” period instead of at a regular public hearing.

“The issue I’m concerned about is the way they went about it,” Katie Martinez said. “It’s taxing without a public hearing.”

Chandler said a public hearing was not required, adding: “Several years ago, another City Council did reduce the utility user’s tax from 7% to 5%, and they did that without a public hearing. So any implication that we are trying to be deceitful or using some trickery is absolutely not the case.”

Resident Johanna Hofer, who said she was not surprised by the council’s decision to impose the tax, said she would like to continue circulating a petition opposing the tax to put the issue before voters.

SOUTHLAND PHONE TAXES

Some Southern California cities that tax interstate and overseas telephone calls:

City Rate Increase per month* Monterey Park 2.75% $.83 Arcadia 5.00% $1.50 Pasadena 7.86% $2.36 Santa Monica 8.00% $2.40 Culver City 10.00% $3.00

* On a $30 interstate or overseas bill