Utility Users Tax FAQ

FREQUENTLY ASKED QUESTIONS about Measure C7 and Ventura's UUT

Measure C7

To maintain essential city services while decreasing tax rates, shall an ordinance be adopted to comply with new federal requirements and to preserve funding for critical city services, including police and fire protection, paramedic and emergency response, street repair and maintenance, youth services, and reduction of trash and pollution from parks, beaches, and coastal waters, by updating the method for calculating and collecting the communication users' tax?

What is a Utility Users Tax?

Ventura's UUT is a 5% tax on utilities including natural gas, cable television, electricity and telephones. It does not include water and wastewater. The City of Ventura has maintained a Utility Users Tax (UUT) for almost 50 years.

What does it fund?

Ventura's UUT provides approximately $3 million in annual revenue to fund city services that help maintain our quality of life and protect property values. The UUT provides funding for police, fire protection and paramedic services, street and road maintenance and trash removal from our parks, beaches and coastal waters.

Do other cities have UUTs?

Yes. More than 150 California cities maintain a UUT. The state average is 5.5%.

Why does Ventura's UUT need to be updated?

Due to recent changes in federal and state law, Ventura's UUT must be updated and re-authorized by voters. First authorized almost 50 years ago, Ventura's ordinance is based on the Federal Excise Tax, which was written for 1960s communications technology. Recent changes in federal law requires Ventura's ordinance to be changed as well to ensure the UUT is being applied fairly and to avoid potential litigation. More than 150 other California cities will also be required to update their UUT ordinances.

What is Measure C7?

City Council has placed Measure C7 on the November ballot to update Ventura's UUT ordinance and maintain vital city services. The new ordinance authorized by Measure C7 will reduce the tax rate from 5% to 4.5% for all Ventura residents who use "land line" telephone service, cell phones, and who have Cable TV. Measure C7 will ensure Ventura's UUT complies with recent changes in state and federal law.

What would happen if the UUT ordinance were not updated?

Without reauthorization, the ordinance could be disallowed and vital city funding would be cut off. The loss of nearly $3 million in annual city revenue could result in the immediate reduction of police officer and firefighter positions. Or, it may result in reduced street maintenance and have a negative impact on the City's road repaving schedule.

Will Measure C7 increase my tax rate?

No. Measure C7 will reduce the tax from 5% to 4.5% on all communications services included in the UUT.

Will Measure C7 tax Internet access?

No. Measure C7 will not tax Internet access. Under federal law, Internet services are not taxable. This includes Wi-Fi access and Internet services such as email and digital downloads such as music, games, and ringtones.

How can Measure C7 maintain vital city services while also reducing the tax from 5% to 4.5%?

Measure C7 is projected to be revenue neutral by using a reduced tax rate spread across all users of telecommunication technologies. Ventura's UUT ordinance was written in 1961 and does not reflect the latest communications technology. This has resulted in some persons being taxed for communications services while others are not, depending on the technology used. By treating all taxpayers equally Measure C7 will produce approximately the same amount of revenue while reducing the tax rate.

When is Measure C7 on the ballot?

Measure C7 is on the November 6th, 2007 ballot. All voters registered in the City of Ventura are eligible to vote on the measure. Absentee ballots are mailed October 9th, 2007.