Almanac

Viewpoint - March 25, 2009

Guest opinion: End Portola Valley's utility taxes

by Charles Engles and Ed Wells

On Nov. 3, 2009, Portola Valley voters may face yet another election to authorize four more years of utility taxes. About four years ago, the utility taxes were extended through June 2010, but only by a very slim majority.

The utility tax was first authorized about 20 years ago to provide emergency funds for specific projects, such as repairing storm-damaged roads. Once these projects were completed, however, successive town councils have promoted utility taxes for new projects and increased budgets. Governments always find ways to spend taxpayer money once they have it.

The general fund does not need utility tax revenue now because it has received $6 million more in property taxes than projected from the time of the 2005 election, and the Town Center projects have been completed, largely with donated funds.

And we do not need utility tax revenues for our beloved open space program either. We have shown that major open space projects (Shady Trail, Sausal Creek) can be financed privately with tax deductible donations, and with no town funds!

Furthermore, the utility tax is a very inefficient source of revenue because it is not tax deductible. It also puts a burden on our older residents with limited income from Social Security and interest and dividends from shrinking investments.

The council should declare that the town will defer any utility tax election until we have a real emergency. An early decision to end utility taxes will help the town staff and finance committee to develop a tighter budget for next year, consistent with the difficult economic times we live in.

We suggest that you use the new town website — portolavalley.net — and let the council members know how you feel about paying more utility taxes.

Charles Engles and Ed Wells live on Wintercreek and Naranja Way, respectively, in Portola Valley.

(Editor's Note: The utilities taxed are electricity, gas, phone and water for residents and businesses. There are two components: a 4.5 percent rate, which was lowered from 5.5 percent in 2006. Revenues from this tax can be used only for council-designated expenses. Proceeds from an additional 2 percent tax, adopted in 1997, are restricted to the preservation and purchase of open space. Total income from both taxes is expected to be $737,400 in the 2008-09 budget year.)

Comments

Posted by Steve Toben, a resident of Portola Valley: Woodside Highlands
on Mar 26, 2009 at 8:54 am

As a member of the Portola Valley Town Council, I was troubled to read this opinion piece urging residents to oppose any consideration of renewing the Utility Users Tax (UUT) next November. Portola Valley has a long history of sound and prudent financial management.
We have almost no sales tax revenue (the financial mainstay for most cities and towns) and receive only $7 of every $100 that our residents pay in property taxes. The additional funds provided by the UUT, together with a very lean Town staff, have enabled us to avoid the financial upheavals that have plagued many neighboring communities.

The UUT has also provided funding to acquire open space.  Although the yearly amounts collected are small, over time they enable major purchases of land that enhance the quality of life for all residents.

The Town Council will take up renewal of the UUT in coming months. It is unfortunate that Mr. Wells and Mr. Engles would seek stir up public opinion to abolish this vital revenue source for open space and essential services even before the Town Council holds a meeting on the subject.

Steve Toben

Vice Mayor


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