Politics & Government
UUT Revenues Fall Short, Residents Dodge Tax
Tax revenue from the UUT is falling short of what the city projected. Furthering the problem, many residents have found clever ways to avoid paying the 10-percent tax.
Revenue from Sierra Madre’s , which is currently set at 10-percent, is falling short of what the city projected and is not able to fully fund the services it was intended to, according to City Staff.
UUT Oversight Committee Chair Enid Joffee presented a report on the UUT to the City Council on Tuesday.
“They are not fully covering the costs that that they were voted upon to cover… and never have,” Joffee said.
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The committee did report that UUT revenues were properly utilized for the purposes voters intended, which include funding public safety services including paramedics, fire and police.
Sierra Madre’s UUT rate has been on the rise since 2008, when voters approved a temporary increase on the tax, which was then six-percent. Despite the increase, and the addition of taxed utilities such as cell phones and cable TV, the gap between UUT revenues and City expenses has widened.
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Joffee noted that having the UUT was once “a luxury and is now a necessity.”
With revenue shortfalls, the city has been scrambling to find ways to close the budget gap. Permit and other city fees were recently raised, and Mayor Josh Moran stated that the “no” vote on the UUT extension in April was one of the reasons the City decided to to an outside company, Waterworks Aquatics.
Dodging the UUT Tax
Sierra Madre’s 10-percent UUT is among the highest in California, and some residents have been finding clever ways to avoid paying it.
A rising trend involves residents registering their cell phones to an out-of-town address, such as their office, to dodge the tax.
City Manager Elaine Aguilar confirmed that practices like this are happening and that there is very little the City can do about it other than to make sure the phone companies are doing their jobs to comply with the City ordinance.
About the UUT
The UUT is currently set at 10-percent, but it could rise to 12-percent any time before July 2014. After that, the UUT will start to “sunset” by 2-percent per year until it falls back down to 6 percent in 2016… unless voters approve a new increase.
in April, but could have the chance to vote on the matter again in April 2014, according to Aguilar.