Frequently Asked Questions

Proposition S puts the telephone users tax before the voters for approval on the February 2008 ballot – and cuts the tax rate. Based on recent court and IRS decisions, dozens of California cities will not be able to collect the telephone utility tax the way they have been. As a result, if the law is not changed with Prop S, the city of Los Angeles stands to lose $270 million and cuts in essential city services and jobs would be necessary. Los Angeles has relied on this tax for over 40 years, and it is the source of 6% of general fund revenues.


Frequently Asked Questions

Does Prop S raise taxes?
No. Proposition S reduces the utility tax from 10% to 9%.
Once Proposition S is adopted, the tax cannot be increased without voter approval.

Does Prop S tax internet services?
No. Proposition S does NOT allow a tax on Internet access, email and downloads.

Would low income seniors and persons with disabilities have to pay tax?
No. Low-income seniors and persons with disabilities are exempted from paying.

What insurance do we have that taxes will be collected and spent properly?
A YES vote on Proposition S requires annual audits by the Office of Finance to insure that the tax is collected at the lower rate, and that all monies are properly spent.

What if Prop S does not pass?
If not passed by voters, $270 million will be lost to the City’s General Fund budget. According to analysis by the CAO, this would require cuts to City services that might include curtailing police officer hiring, fire station closures, reduction of public library hours, a decrease in public park and street maintenance, eliminating recreation programs for children and other reductions in critical services.