Opinion: In the Perpetual Election -- county phone tax on, MTA tax off?

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The Los Angeles County version of the city’s Proposition S may soon be coming to a voting booth near you. But the half-cent sales tax to fund transportation projects may not. It’s up to the county Board of Supervisors to decide, on Tuesday, whether phone taxes or sales taxes or both will be on the November 4 ballot.

Let’s deal with the MTA sales tax first, because it’s shorter. Kind of. Supervisor Michael Antonovich is asking his colleagues to adopt a resolution supporting yet another measure on the November 4 ballot that would prevent the revenue from the sales tax, if it passes -- and in fact any transportation tax revenues -- to be spent equitably. Whatever that means. Those equitable principles have yet to be drafted, but it comes down to this: the MTA wouldn’t be able to use its new tax revenue solely for the subway to the sea, also known as the Red Line extension.

Here’s how Antonovich puts it in his press release:

Here’s a link to the agenda item (pdf), but if you’re in a rush, here’s the key language: the initiative would ‘specify principles for subregional allocation of future sales tax increases.’ Just how those principles would look in print is a matter for speculation, but I’m guessing it will take more than a couple days to hammer them out.

Can Antonovich pull it off? He’d have to get by Supervisor Zev Yaroslavsky, who supports using the sales tax revenue on the projects outlined in a bill by former state lawmaker Kevin Murray. And that’s just on the Board of Supervisors. Those five supes make up just over a third of the Metropolitan Transportation Authority board, where Mayor Antonio Villaraigosa is leading the subway-to-the-sea charge. By the way, the MTA board will take up the sales tax plan on Thursday.

Now, to the phone tax or, more correctly, the utility user’s tax. Cities around California having been asking voters to ratify and in some cases lower their existing taxes on telephone calls, all in response to lawsuits challenging the legality of applying those taxes to cell phones. The Los Angeles County version sent to the supervisors by Chief Executive Officer Bill Fujioka would reduce the rate from 5% to 4.5%. Of the state’s 58 counties, Los Angeles and three others -- Alameda, San Francisco and Sacramento -- also have phone taxes.

Opinion L.A. has documented the recent surge in California cities updating, and in some cases reducing, their phone or utility taxes here, here, here and here. The big one was the city of L.A. on Feb. 5, along with Pasadena and Huntington Park, and April votes in Culver City, Malibu, Sierra Madre and June votes in Covina and Torrance. Each of those measures to ratify the phone tax passed.

Why do voters have to ratify their existing phone taxes? The history is complex and convoluted, but in a nutshell it goes like this: Local governments began applying a tax to phone calls and other utilities in the 1960s, and they modeled it on an existing federal tax that dated back to the Spanish American War. As you may have guessed, there were no cell phones back then, so it was easy to figure out who paid. Callers didn’t cross jurisdictions while talking on the phone.

The city of L.A. added its tax in 1967, but other cities and counties really jumped on the bandwagon in the early 1990s in response to the wholesale grabbing of local funds, by the state, to pay for schools.

Los Angeles County adopted its 5% tax in 1991 (If you want to find it, follow the instructions laid out here). It applies to phone calls, natural gas and electricity, but just in the unincorporated areas of the county.

But county officials wrote their law as if telephone deregulation had not yet occurred, so they made no provision for the plethora of new companies and technologies that were already changing the way people make calls. If you’re calling on a cell phone instead of a landline, does the person making the call get taxed, or the person receiving it? Do they get taxed the rate in effect where the caller lives? Or where the caller is calling from? Or where the caller gets the bill?

In 2000 a federal law helped clarify how to bill, and cities and phone companies negotiated how to tax cell calls. Local tax laws were updated accordingly. But several years earlier, in 1996, California voters adopted Proposition 218, which required any new local tax to be put before voters. So -- does clarifying the phone tax to make sure it applies to cell phones trigger Prop. 218? It does. Verizon challenged many of the cell phone tax laws, and courts have been ruling that cities and counties must go to the voters.

County supervisors have been trying for more than a year to fight or settle a cell phone tax case brought by Joe Oronoz and other plaintiffs. On July 1, they settled the case in closed session, but they have yet to release the details. But it’s a good bet that the settlement and the decision to put the tax on the ballot -- with a reduction -- are somehow related.

The various city tax ‘updates’ have followed one of two paths -- the straightforward (We want to keep taxing you at the same rate but could be stopped in court unless you give us your permission) and the quasi-sneaky (Hey! We have a plan to lower your taxes! Vote for it!). The county’s proposal follows the second model. To be fair, it’s not the ballot measures that have been sneaky, but the campaigns for them.

Opinion L.A. follows phone taxes far more than is generally deemed to be safe or normal; but check back here, and at Vote-O-Rama, for updates.

Also go to Vote-O-Rama to keep score on the growing November ballot.